US Trying to Rehash Failed Claims in Customs Suit on Aircraft Brake Discs, Honeywell Says
The U.S. is trying to rehash settled issues in a customs suit on the classification of Honeywell's precut, radial, chordal and web fabric pieces used in airplane brakes as part of an aircraft, Honeywell argued in a July 14 reply brief at the Court of International Trade. While the government argued that the court should have performed a GRI 2(a) analysis, Honeywell argued that no such analysis was needed and that, even assuming GRI 2 is applicable, "the result is the same" that the parts are properly classified under Harmonized Tariff Schedule heading 8803 (Honeywell International v. United States, CIT # 17-00256).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
In January, the court held that Honeywell's brake segments were "parts of an aircraft" under HTS heading 8803 and not "fabrics" under heading 6307 (see 2501300051). Judge Mark Barnett said heading 8803 won out since the parts don't have any other purpose and don't require further processing before serving as brake disc components.
The U.S. sought a rehearing of this decision, arguing that the court erred by focusing on the post-importation "downstream use" of the segments in the manufacturing of needled preforms (see 2505010050).
In the court's decision, Barnett described the brake discs' manufacturing process, including the role of the imported radial, web and chordal segments in that process. In short, the segments are made into needled preforms, which are then made into carbonized preforms. These preforms are then manufactured into carbon-carbon preforms, and, finally, into carbon-carbon aircraft brake discs. The government argued that Barnett erred in failing to address whether the imported segments or the needled preforms "constituted a finished or unfinished 'part' of an aircraft" under GRI 2(a).
GRI 2(a) holds that tariff terms apply to unfinished or incomplete articles with the same essential character as finished products. The U.S. said a GRI 2(a) analysis is needed, since it shows that only finished parts or unfinished parts with the finished part's essential character can be classified as the finished article.
In response, Honeywell said the government's claim that the court should have analyzed "each intermediate processing step between the importation" of the brake segments and the production of the finished aircraft brake disc is a "redux" of the government's "material" and post-importation processing claims that the court already rejected.
Honeywell added that the court also must disregard the government's claim that the court "should analyze whether any 'intermediate articles' are parts (or unfinished parts) of aircraft." While the U.S. acknowledged the importer's subpart argument in its cross-motion for summary judgment, "it failed to claim that the Court was obliged to engage in an independent analysis of whether the preforms are themselves a part of an aircraft."
The importer argued that there's "no dispute" that the brake segments are used in the manufacture of aircraft brake discs, but the U.S. asks the court to "interject a separate, intermediate tariff classification analysis at every discrete step of brake disc manufacturing to consider whether the article retains its identity as a part." Barnett already did this, making this subanalysis to be "presumed to form a basis of its holding that the Brake Segments are parts of the brake disc, and subsequently, part of an airplane," the importer said.
The government's argument even fails on the merits, the brief said. The government doesn't cite any case law applying a GRI 2(a) analysis to "intermediate stages of the post-importation processing of imported subparts," and the brake segments "have only one end use in aircraft brakes." Thus, the "manufacturing process, including the identification of several preform stages, does not result in the creation of any product from the Brake Segments other than the brake disc," Honeywell said. It's the government that "bears the burden of establishing how the Brake Segments are not part of the brake discs," though it offers no argument in support of this claim and no alternative classification of the intermediate articles.
Even applying GRI 2(a) to the parts leads to a finding for Honeywell, the importer said. Under GRI 2(a), "if the preforms are unfinished brake discs, they are properly classified as airplane parts in heading 8803," the brief said.
After the brake segments are assembled into the needled preform, the article has the "full annulus doughnut shape of the disc," the importer said. While the edges of the preforms are rough, they are "still specific and close in dimension" to the brake disc and are thus "blanks" and "properly considered to be unfinished brake discs," the brief said.