Rulings, remedies and court proceedings for customs and trade professionals

Importer Citing Wrong Comparisons in Magnesia Carbon Brick Case, Petitioner Claims

The government was right to say that a Chinese brick importer’s magnesia alumina graphite bricks were subject to antidumping and countervailing duties on magnesia carbon bricks from China, a petitioner argued in a case regarding the quantity of alumina needed to exempt magnesia alumina graphite bricks from duties (Fedmet Resources v. U.S., CIT # 23-00117).

Start A Trial

“Just because [importer] Fedmet opted to rename in-scope MCBs with a MAC brick brand name does not change what the bricks actually are,” it said.

The only difference between magnesia carbon bricks and magnesia alumina graphite bricks is the extra quantity of alumina in the latter. The orders on magnesia carbon bricks, however, don't define the specific quantity of alumina a product needs to be an out-of-scope magnesia alumina graphite brick.

In the underlying covered merchandise inquiry, part of an Enforce and Protect Act investigation, the Commerce Department tested 11 sample bricks from Fedmet and, looking to prior scope rulings initiated by both Fedmet itself and by a different importer, found that two were covered by the orders; it ruled the remaining nine tests inconclusive due to a testing methodology that it deemed suspect. On that basis, it found Fedmet had evaded AD/CVD on magnesia carbon bricks by entering its merchandise as magnesia alumina graphite brick.

In a March 11 brief opposing a motion for judgment by importer Fedmet, petitioner and defendant-intervenor Magnesia Carbon Bricks Fair Trade Committee said the Commerce Department didn't unlawfully expand the scope of AD/CVD orders, as alleged, when its scope ruling held that Fedmet’s bricks are dutiable magnesia carbon bricks rather than out-of-scope magnesia alumina graphite bricks.

In its motion for judgment, the importer cited a 2014 case it brought to the U.S. Court of Appeals for the Federal Circuit regarding classification of its “Bastion” brand bricks that had between 8% and 15% alumina. In that case, CAFC ruled that the “Bastion” bricks were nondutiable magnesia alumina graphite bricks.

However, CAFC didn’t rule in this case on what defines a magnesia alumina graphite brick, the petitioner said.

“There was no dispute in that case that the products at issue were legitimate MAC bricks, as understood within the industry,” it said. “The question presented was whether MAC bricks as a category nonetheless fell within the scope of the orders, and the appeals court ruled they did not.”

That case’s holding, it said, was not that “MCBs are magically converted into MAC bricks simply with the addition of any amount of alumina, no matter how small.” It doesn't apply to the current litigation, like Fedmet claims it does, because the bricks now in consideration are not indisputably magnesia alumina graphite bricks, it said.

The petitioner also supported Commerce’s reliance on a prior scope ruling on Fedmet’s fellow importer S&S Refractories in its decision.

Fedmet opposed that factor of Commerce’s ruling in its motion for judgment, but the importer was wrong that it was unlawful, the petitioner said. Again, the issue was that Fedmet was wrongly equating the current bricks at issue with the “Bastion” bricks litigated at CAFC.

The importer claimed that Commerce wrongly used the 2017 S&S Refractories scope ruling as a k(1) source in its overall analysis of Fedmet’s bricks because that 2017 ruling was subsequent to the 2014 case that reached CAFC. That 2014 case should have been dispositive, not the 2017 scope ruling, it argued.

“CBP observed that, in Fedmet CAFC, the Bastion bricks found to be out-of-scope MAC bricks were comprised of ‘8 to 15 percent… alumina, 3 to 15 percent carbon, [and] 75 to 90 percent magnesia,” Magnesia Carbon Bricks Fair Trade Committee said. “CBP found evasion [in this proceeding], because -- although Fedmet described its entered merchandise as ‘Bastion’ brand bricks – laboratory testing showed that the alumina, magnesia, and/or carbon contents fell outside of the above-cited ranges.”