Commerce Skipped Step in Duty Scope Ruling, Importer Says

The Commerce Department is attempting to skip the first step of analyzing whether a product is covered under antidumping and countervailing duty orders on “mouldings and millwork products” from China -- determining if the product is actually either a “moulding” or a “millwork product,” an importer said June 24 in support of its motion for judgment (see 2401290043) (Hardware Resources v. U.S., CIT # 23-00150).

“Commerce was not permitted to skip over the first twelve words of the scope as it did in its Scope Ruling and focus only on the remainder,” it said.

Responding to claims by the U.S. (see 2403280030) and petitioner Coalition of American Millwork Producers (see 2404290054), importer Hardware Resources said that Commerce was wrong to rule that the boards Hardware Resources imports for assembly into cabinets are subject to the duties.

Neither opposing party came up with a reason as to why Commerce was allowed to ignore these “key terms” in its scope ruling, the importer said. The department’s choice to do so, it said, rendered those terms “superfluous” in the language of the orders.

“Whether an item is covered by the scope of the WMMP Orders is inherently based on the product’s end use as a wood moulding or millwork product,” it said.

The government offered in its response that the “the phrase ‘wood mouldings and millwork products’ could be viewed as surplusage,” but this was an “impermissible post-hoc rationalization” because Commerce never made such a claim in the scope ruling itself, Hardware Resources said.

It said that the “United States and CAMP also attempt[ed] to appropriate Hardware Resources’ argument” in their responses by claiming the importer’s own interpretation is the one making part of the orders’ language superfluous, but they were wrong.

“With regard to the United States’ argument, there are many reasons specific exclusions are listed in the scope language,” it said. “For example, the listed exclusions may be products that simultaneously fall under two orders or arose as a result of comments filed by interested parties.”

And a 2012 case both parties raised, King Supply Co v. U.S., was distinguishable from the present set of facts because plaintiff King Supply Co.’s products were “identical” to those covered by AD/CVD orders it was trying to avoid. The only distinction the plaintiff could try to draw was between the two products’ end use. But Hardware Resources said it “disputes that its edge-glued boards are physically identical to in-scope mouldings or millwork products.”

“The Court has recognized in multiple instances that King Supply is applicable only where, unlike the instant case, there is no dispute as to whether the product at issue is physically identical to in-scope merchandise,” it said.

Hardware Resources also again argued that k(1) factors “confirm” that its products are different than those covered by the order. The government, it said, “cursorily dismisses evidence in the Petition, Petitioner’s questionnaire responses during Commerce’s investigation, the ITC Report and key witness testimony” to rely solely on King Supply.