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Solar Panel Mounts Qualify for Finished Goods Exclusion of AD/CVD Orders, Appellants Tell CAFC

Exporter China Customs Manufacturing's solar panel mount assemblies are "fully and completely assembled" at the time they're imported, thus qualifying for a finished merchandise exclusion from the antidumping duty and countervailing duty orders on aluminum extrusions from China, CCM argued. Filing its opening brief at the U.S. Court of Appeals for the Federal Circuit on March 8, CCM, along with Greentec Engineering, argued that the record shows that the solar panel mount assemblies satisfy each of the requirements for the exclusion, including being fully assembled at the time of entry (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 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).

On appeal to the Federal Circuit, the plaintiff-appellants argued that the two precedential opinions cited by CIT "are limited to the involved units of window walls because (a) the units were subject to further processing after importation, and (2) the findings of the [U.S.] Court of Appeals for the Federal Circuit in Shenyang 2015 are not applicable to the solar panels mount assemblies." The Shenyang 2015 decision cannot back Commerce's position, the brief said. The case is limited to the window wall mounts and not a precedent to exclude the solar panel mounts from the orders under the finished merchandise exclusion.

The plaintiff-appellants also argued that their assemblies fulfill each requirement for the finished goods exclusion. The assemblies meet the meaning of the term "part" as listed in the exclusion, are fully assembled at the time of entry, are comparable to the examples laid out in the orders' finished merchandise exclusion and are not subassemblies that are limited in the orders to partially assembled merchandise, the brief said.

Commerce's position that the solar panels are installed on the solar panel mount system is not backed by the record since the solar panels, the mounts and the other EcoFasten components are "consecutively installed to create the solar panel system," the appellants also argued. Solar panels are named in the finished merchandise exemplars as not requiring further processing. This makes Commerce's conclusion that the mounts are distinct from the panels untenable since both are installed as part of the solar panel system, the brief said.