Federal Circuit Denies Lower Duty Rate for Chinese Aluminum Extrusion Importer

Earlier this month, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) denied an appeal by Capella Sales & Services Ltd., an importer of aluminum extrusions from China, in which the company challenged the countervailing duty margin applied to its entries at liquidation, arguing that a lower rate should have been applied by U.S. Customs and Border Protection.

Capella did not participate in U.S. Department of Commerce’s (“Commerce”) 2011-2012 administrative review of aluminum extrusions from China. As a result, its entries were subject to the 374.15% all others” rate under the countervailing duty order. In connection with other litigation, the 374.15% all others” rate was reduced to 7.37% in October 2015 based on challenges brought by several other importers of aluminum extrusions.

Capella, however, challenged the countervailing duty margin applied to its entries and filed two complaints at the U.S. Court of International Trade (“CIT”) challenging Commerce’s liquidation instructions that incorporated that rate. In its complaints, Capella asserted that Commerce could not lawfully apply the 374.15% rate to Cappella’s entries because the disparity between that rate and the litigated 7.37% rate was too great. The CIT dismissed Capella’s complaints for failure to state a claim. In its decisions, the CIT found that the statute contemplates that the CVD rate Commerce established in its final determination is the rate that applies to pre-Timken notice entries when liquidation is not 1) enjoined by a court decision, or 2) the subject of administrative review. Further, because Capella’s imports were entered before publication of the Timken notice, the company did not request administrative review of its entries, and it did not participate in the rate-lowering litigation – it could not claim the benefit of the lower all-others rate.

In its decision, the Federal Circuit upheld the CIT’s two decisions dismissing Capella’s complaints. The Federal Circuit found that, based on the facts of the case, the statute and legislative history supported the CIT’s findings. Specifically, like the CIT, the CAFC determined that because Capella did not participate in the litigation challenging the 374.15% all others rate, and because Capella’s pre-Timken notice entries were not enjoined by a court order, its entries were properly liquidated as entered” at the all others” rate of 374.15% identified in the final determination