CIT Says Segments Further Processed Into Aircraft Brake Discs Are Aircraft Parts

The result allows for importer Honeywell International to bring in the segments duty free under HTS subheading 8803.20.00. Barnett said that while the government's preferred heading of 6307, which covers certain textiles, prima facie applies to the products, heading 8803 is a more specific and thus preferable home for the products.

The subject items are radial, web and chordal segments that are made from nonwoven polyacrylonitrile fiber fabric material.

The radial and chordal segments are made by "needling web and unidirectional tow fabrics together to form a duplex fabric." The fabric is then cut into arc shapes. Meanwhile, web segments are made by "needling tows of oxidized" polyacrylonitrile fiber in a way that "results in a web of fibers." The web segments are then cut into arc shapes.

After the segments are imported, they are first used to make "needled preforms" by a third party in Tennessee. Each layer of the preform has six segments of the same type and is run through a needling machine, which then creates an additional layer using six segments of a different type of segment than the first. A third layer is sometimes created using six segments of a third type. The needling machine then lays the segments in a donut formation and "jabs" a needle into them to connect the layers.

Then, multiple preforms are stacked into a furnace with spacers in between them, where a weighted load is placed on the stack. The preforms are then sent back to Honeywell for further processing, where they undergo a densification process. The final preforms are then made into aircraft brake discs through a "final machining operation."

Barnett said the issue presented by the case is the "extent to which a part of a part is a part for tariff purposes," since the main issue to be resolved is whether the goods fit under heading 8803 as an aircraft part.

The judge said at "first glance, the segments do not look like parts of aircraft," since the relationship between the imported segments and the "article of which they are claimed to be a part requires that the segments undergo substantial post-importation processing." Barnett said the question is thus "whether this degree of processing removes the segments from classification as aircraft parts notwithstanding the segments’ principal, and perhaps sole, use in the production of aircraft brake discs.” Honeywell said the segments are parts of aircraft brake discs, while the U.S. said the segments aren't "sufficiently advanced" to be considered aircraft parts.

The court found for Honeywell.

Barnett first laid out the two tests established by the U.S. Court of Appeals for the Federal Circuit for finding whether a product can be classified as a part of another article. The first says an item is a part if the item is "dedicated solely for use with another article and is not a separate and distinct commercial entity." The second says an item is a part if it's an "integral, constituent, or component part, without which the article to which it is to be joined could not function as such an article."

The judge then surveyed similar cases on the issue from CAFC, noting that the appellate court specifically looks at whether the import "1) is dedicated for use in the downstream article; 2) must be cut to size to be used for its particular purpose; or 3) otherwise requires substantial additional processing before being identifiable for its intended purpose.”

Applying these factors, Barnett said the segments are aircraft parts. Unlike prior cases where the import needed to be cut to size, the segments at issue "are cut-to-size and identified for the production of a brake disc for a particular type of aircraft." The imports are used "in their condition as imported" to make the preforms that are then used in the manufacturing of the brake discs.

"In other words, notwithstanding the post-importation processing that is required as part of the production process, the imported segments are identifiable to the downstream article and are used for no other purpose," the court said.

The segments are also "recognizable parts of the needled preforms," and are suitable upon importation for use in the preforms, requiring "no further processing." In addition, the segments are "dedicated to that use and had no other substantial commercial application," and "may also be considered integral, constituent, and component parts of the needled preforms because each of those preforms are made from various combinations of the segments," the court said.

Barnett said that the government's claims to the contrary, at their core, rest on the "degree of processing involved in the production of aircraft brake discs." The judge said this claim "discounts the segments’ dedicated use in the production of aircraft brake discs" and only relies on the "complex nature" of the production process. The government fails to explain "why the complexity of this production materially changes the outcome.”

The court then added that while the goods are "prima facie classifiable" in heading 6307 as textiles, heading 8803 is a better fit given that it's more specific. Heading 6307's phrase "other made up articles" is "more general than a heading that effectively provides for parts of 'other aircraft,'" the court said, adding that heading 8803's requirements are "more difficult to satisfy."

(Honeywell International v. United States, Slip Op. 25-13, CIT # 17-00256, dated 01/30/25; Judge: Mark Barnett; Attorneys: William Randolph Rucker of Faegre Drinker for plaintiff Honeywell International; Edward Kenny for defendant U.S. government)