CAFC Rules on Export of Scrap Metal, Valuation of Certain Woolen Fabrics
Preparing scrap metal for export is not a "process of manufacture." In Washington International Insurance Company v. U.S., the Court of Appeals for the Federal Circuit (CAFC) affirmed the Court of International Trade's (CIT's) decision that testing, sorting, sizing, and packaging scrap metal in the U.S. prior to export for manufacture into stainless steel sheets, does not qualify as a "manufacturing process" for the duty exemption provided in TSUS 806.30.
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(TSUS 806.30 provided a duty exemption for certain articles of metals that are manufactured in the U.S. or subject to a process of manufacture in the U.S., exported for further processing, and then returned to the U.S. for further processing. TSUS 806.30 has been replaced by HTSUS 9802.00.60.)
The CAFC explains that while the scrap used to make the stainless steel sheets abroad was extensively manipulated in the U.S. prior to export, these manipulations merely cleaned, isolated, or packaged the scrap, and such operations have not historically been considered processes of manufacture.
See ITT's Online Archives or 02/24/04 news, 04022425 for BP summary of CIT decision.(CAFC Court No. 04-1019, decided 01/18/05, available at http://fedcir.gov/opinions/04-1019.pdf )
Valuation of certain woolen melton fabrics. In VWP of America, Inc. v. U.S.(VWP V1), the CAFC considered several issues in VWP IV regarding the valuation of certain woolen melton fabrics imported by Victor Woolen Products of America (VWPA).
(1 VWP V is the fifth court decision in VWP of America, Inc. v. U.S.)
In VWP IV, the CIT upheld Customs determination that the melton fabric at issue should be appraised based on the price paid for the fabrics by VWPA's U.S. customers, rather than the price paid by VWPA to its supplier and parent company, Victor Woolen Products, Ltd. of Canada (VWPC).
The CAFC concurred with the CIT that it is not possible to determine the "transaction value" of the merchandise at issue for purposes of duty appraisal, as the amount of certain commissions could not be established. However, the CAFC rejected the CIT's finding that the "deductive value" could not be calculated for the merchandise at issue, and remanded the case back to the CIT, with the instruction that the CIT in turn remand the case to Customs to consider the "deductive value" of the merchandise.
See ITT's Online Archives or 07/07/03 news, 03070730 for BP summary of VWP IV. See ITT's Online Archives or 02/05/02 news, 02020535 for BP summary of VWP III. See ITT's Online Archives or 05/19/99 news, 99052066 for BP summary of VWP II.(Court No. 03-1347, dated 11/24/04, which the CAFC states is not citable as precedent, available at http://fedcir.gov/opinions/03-1347.pdf )