Language of AD/CVD Orders Grants Finished Goods Exclusion to Solar Panel Mounts, Appellants Say
The plain language of the antidumping duty and countervailing duty orders on aluminum extrusions from China clearly excludes exporter China Custom Manufacturing's solar panel mount assemblies as extrusions fully assembled after importation, CCM along with importer Greentec Engineering argued in a reply brief at the U.S. Court of Appeals for the Federal Circuit. Since there is no part of the plain language of the order that says a part of plaintiff-appellants' EcoFasten system cannot qualify for the finished merchandise exclusion, the solar panel mounts qualify for the exclusion, the brief said (China Custom Manufacturing v. United States, Fed. Cir. #22-1345).
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The case concerns CCM's scope request for its Rock-It 3.0 solar roof mountings. Made with aluminum extrusion parts, the products are used to mount solar panels on a roof and with other parts of the plaintiffs' EcoFasten Rock-It System 3.0. Since the AD/CVD orders' issue date in 2011, Commerce's interpretation of the scope of the orders has drastically evolved.
Commerce originally found that the roof mounts qualified for the finished merchandise exclusion of the orders because they required no further assembly. However, during that same year, the agency revised the way it finds whether a good qualifies as finished merchandise. The new policy found that its old interpretation of the finished merchandise exclusion could "inadvertently expand the scope of the order," so it changed the exclusion's requirements to require a good to include all the downstream products.
Two prior Federal Circuit cases shored up this interpretation, eventually determining that a good found to be a subassembly cannot qualify for the finished merchandise exclusion. It was under this standard that Commerce made its scope ruling now subject to litigation. The plaintiff-appellants conceded that, as the interpretation stands now, their products constitute a subassembly and thus do not qualify for the finished merchandise exception to the extrusion orders. Instead, they challenged the interpretation of the exclusion itself at the Court of International Trade. The trade court held that it can't ignore prior case law affirming this standard, ultimately upholding Commerce's decision to not exclude the solar panel roof mounts (see 2112070031).
In its reply brief, the U.S. referenced this new standard in a bid to find that the solar panel mounts do not qualify for the exclusion. Responding to these arguments, CCM and Greentec said that the plain language of the order excludes the solar panel mount assemblies and that Commerce illegally expanded the language in the scope order by requiring all of the EcoFasten components to be fully and permanently assembled and completed finished merchandise.
In particular, the appellants argued that Commerce added the word "product" to the finished merchandise exclusion, requiring that the exclusion apply to a full and complete final finished product. However, the order itself laid out an exclusion for finished merchandise containing aluminum extrusions as fully assembled "parts" complete at the time of entry.
"In short, the common meaning definition of 'parts' requires that the part be a division of the whole -- such as the solar panel mount assembly in comparison to the overall solar panel system," the brief said. "By requiring all of the identified EcoFasten components be imported together, to form the final fully complete solar panel system, the Department revised the limiting use of the word 'parts' as a fully finished and complete article or 'finished merchandise' at the time of entry."
Further attacking Commerce's definition of the finished merchandise exclusion, the appellants said Commerce merged the finished merchandise exclusion with the finished good kit exclusion, "which requires that 'a packaged combination of parts that contains at the time of importation all of the necessary parts to fully assemble a finished good requiring no further finishing or fabrication ... and is assembled "as is" into a finished product.' ... Therefore, by merging the language of the finished good kit exclusion with the finished merchandise exclusion, Commerce essentially expanded the scope of the order," the brief said.