Pencil Importer's Chinese-Origin Wooden Slats Not Substantially Transformed Elsewhere, Petitioner Says
Defendant-intervenor Dixon Ticonderoga on Jan. 28 joined the Commerce Department in opposing pencil importer School Specialty’s scope ruling challenge before the Court of International Trade (School Specialty v. United States, CIT # 24-00098).
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The importer argued in a November motion for judgment that Commerce had unlawfully “pick[ed] a single factor,” the prefabrication of wooden slats, to look to in determining its pencils hailed from China instead of the Philippines (see 2411120063). In turn, the government said prefabrication is “directly relevant” to an analysis of a product’s essential characteristics (see 2501080079). The essential characteristic of the importer’s Chinese-origin prefabricated wooden slats was that they were destined for production into pencils, it said.
Dixon, the petitioner, agreed with the government. It also echoed the U.S.’s claim that Commerce had considered all necessary factors in its scope ruling, not just prefabrication.
It noted that the department found that its class and kind determination actually supported a finding that the pencils were substantially transformed in the Philippines. School Specialty’s argument that Commerce didn’t explain adequately how this fit into the overall balance of its ruling was just “an improper request for the Court to reweigh a factor that Commerce found in its favor,” Dixon said.
With respect to the physical and essential characteristics factor, Commerce didn’t focus on just wooden slats -- it determined that only one out of four Chinese-origin imports was substantially transformed in China, the petitioner said. It also defended Commerce against School Specialty’s allegation that the department wrongly combined its physical and essential characteristics analyses, saying “this Court has previously approved of determinations that have combined the analysis of the factors under section 351.225(j).”
The importer’s arguments regarding end use were also its attempt to have the court reweigh factors, the petitioner said. And it argued School Specialty failed to properly develop the record in support of its claims regarding the nature of processing and level of investment factors.
Dixon also disagreed with School Specialty’s citation to a prior CBP ruling that had reached a different conclusion.
“School Specialty previously acknowledged that Commerce’s country of origin analysis differs from CBP’s, and requested that “[t]o the extent the [Commerce] considers these authorities, it should take note of the key differences between the cited cases in the present scope inquiry ...,” it said. “Commerce did just that when it noted that CBP rulings are performed under a ‘different analysis.’”