UNITED STATES COURT OF INTERNATIIONAL TRADE

Slip Op. 25-146

In Honeywell International, Inc. v. United States Court No. 17- 000256, (November 25, 2025), Defendant Government sought reconsideration of this court’s re-classification of certain radial, web, and chordal segments in Honeywell Int’l, Inc. v. United States (Honeywell I), 49 CIT __, 756 F. Supp. 3d 1346 (2025) under USCIT Rule 59(a)(1)(B). The Court granted the Government’s motion for reconsideration and revised its decision reclassifying the imported goods under 6307.90.98, HTSUS.

The case involves the importation of nonwoven polyacrylonitrile fabric cut into arched shapes with markings indicating their use in certain aircraft programs. These pieces of fabric are ultimately “use[d] in the production of aircraft brake discs,” with most of the required manufacturing occurring after importation into the United States. Honeywell I, 756 F. Supp. 3d at 1358. After importation, the fabric pieces are mechanically locked together to create needled preforms which in turn undergo a several-day molecular change to produce carbon-carbon brake discs for aircrafts.

Upon initial entry, Customs classified the goods under HTSUS 6307.90.98, which applies a seven percent (7%) ad valorem duty to “[o]ther made up articles, including dress patterns.” Honeywell claimed that the goods instead fell under 8803.20.00 HTSUS, which applies a zero duty to “[p]arts of goods of heading 8801 or 8802: . . . [u]ndercarriages and parts thereof.” In Honeywell I, the CIT re-classified the goods in accordance with Plaintiff’s claims, relying on GRI 1(c) and HTSUS Section XVI Note 3 which identified aircraft “parts.” Despite the Government’s argument that the upstream products were not ‘parts’ of the finished product, but rather parts of an intermediary product (the needled preforms), the Court deemed them parts falling under an explanatory note to Heading 8803 HTSUS.

Here, the Court applied GRI 2(a) to determine that although the imported products possess the “size and shape” of the required parts of the final product, the Government’s contention that the imported products require several levels of manufacturing before developing the “essential character” of the final carbon-carbon brake disc part covered by the HTSUS prevails. Def.’s Suppl. Br. at 3. The Court concluded that while the fabric segments are a part of the needled preform, they are not a part of the finished good. “A ‘finished’ good is one that is suitable for its ultimate ‘intended use.’” Pleasure-Way Indus., Inc. v. United States, Slip Op. 16-100, (CIT 2016), aff’d, 878 F.3d 1348 (Fed. Cir. 2018) (quoting United States v. J.D. Richardson Co., 36 C.C.P.A. 15, 18 (1948)). While further processing does not preclude a part from being a finished part, the intermediary parts would need to fall under the definition of a “finished part” to meet the statutory definition of GRI 2(a), which the needled preforms do not.

Alternatively, Plaintiff tried to argue that the needled preforms constitute “blanks” which are essentially the finished product as per an explanatory note to GRI 2. However, this court also rejected this argument as a blank would require only minimal processing to become a finished product, whereas the preforms require much processing to withstand the temperature and condition requirements of a carbon-carbon brake disc. The Court distinguished the case at hand from one involving blank crankshafts where “nothing [was] added” to the blanks “to make them finished crankshafts.” Cummins Engine Co. v. United States (Cummins I), 23 CIT 1019, 1030–31, 83 F. Supp. 2d 1366, 1376 (1999).

Further, while the Plaintiff argued that the Government had waived review of the parts issue by raising it in an untimely manner, the Court here reserved the ability to benefit from the parties’ positions on all salient issues. Royal Brush Mfg., Inc. v. United States, 483 F. Supp. 3d 1294, 1305 n.19 (CIT 2020). Upon reconsideration, the CIT found that the products fall under HTSUS 6307.90.98 and a seven percent ad valorem duty rate applies.

Slip Op. 25-147

In Superior Commercial Solutions, LLC v. United States Court No. 24-00147, (November 26, 2025), Plaintiff sought a judgement on the agency record under USCIT Rule 56.2.  Plaintiff pled the court to rescind enforcement measures placed on it under the Enforce and Protect Act (“EAPA”), and to remand this case for reconsideration without an adverse inference. The Court here sustained Custom’s final administrative review finding that Customs appropriately determined transshipment and applied an adverse inference according to law. However, this Court provided some relief to Plaintiff, finding that Customs violated certain due process (“DP”) rights afforded to Plaintiff.

The case involves the importation of quartz countertops from Vietnam between September 29, 2022 and January 26, 2023. Prior to this, in 2019, Commerce issued antidumping (“AD”) and countervailing duty (“CVD”) orders on quartz products from China. Orders, 84 Fed. Reg. at 33,053. Commerce initiated an EAPA investigation on October 28, 2022, upon request by a domestic quartz producer submitted September 8, 2022 alleging that Superior was evading the orders by importing quartz from Kales Quartz Co., Ltd. (a Vietnamese Company) which was importing quartz from two Chinese companies. After informing Superior of an initiation of investigation on January 26, 2023, Customs conducted interviews and site visits, as well as collected questionnaire responses from companies in the supply chain including Kales, Superior, Engga and Strry (Vietnamese companies) as well as a Chinese exporter. Customs determined that Kales and Engga were functionally the same company and further determined that the Vietnamese companies had provided misleading answers, warranting an application of an adverse inference that all of the quartz in question had Chinese origin.

Plaintiff here alleged that Customs: 1) violated its DP rights in the time and manner in which it conducted its investigation; 2) acted contrary to the legislative intent behind EAPA; 3) acted arbitrarily and capriciously in determining the slabs were of Chinese origin and imposing an adverse inference given the record; and 4) violated 19 U.S.C. § 1517(d)(1)(C) by failing to inform Commerce of its affirmative violation determination.

While Superior had seemingly waived any challenge to an untimely investigation by failing to raise the claim at the administrative proceeding stage, invoking the exhaustion requirement (28 U.S.C. § 2637(d)), there are recognized exceptions to the exhaustion requirement. One such exception, seen here, is where a case involves a pure question of law. See Gerber Food (Yunnan) Co. v. United States, 601 F. Supp. 2d 1370 (CIT 2009).

As to the timeliness of the investigation, 19 U.S.C. § 1517(b)(1) provides that an investigation shall be initiated:

Not later than 15 business days after receiving an allegation described in paragraph (2) or a referral described in paragraph (3), the Commissioner shall initiate an investigation if the Commissioner determines that the information provided in the allegation or the referral, as the case may be, reasonably suggests that covered merchandise has been entered into the customs territory of the United States through evasion.

Customs defined date of receipt as per 19 C.F.R. § 165.12 as the date upon which Customs provides an acknowledgement of receipt of an allegation, not the day it comes in possession of the allegation, as this would produce an inefficient use of Custom’s resources. This court disagrees with Custom’s taking such expansive liberty, weighing it as prejudicial against public interest. See Brock v. Pierce Cnty., 476 U.S. 253, 260 (1986). The Court further found that Custom’s definition of “date of receipt” is contrary to the legislative intent behind EAPA to initiate investigations quickly, evidenced by EAPA allowing for a full 90 days after initiation of investigation for Customs to find “reasonable suspicion” of evasion. 19 C.F.R. § 165.24. Therefore, Custom’s untimeliness was contrary to the law. Despite Custom’s failure to meet the fifteen (15) day statutory requirement, the Court found that precluding an EAPA investigation for this failure is too strict a remedy, and that the agency did not “lose its power to act.” Barnhart v. Peabody Coal Co., 537 U.S. 149, 160 (2003). However, the Court found that the delay did substantially prejudice Superior and therefore ordered that all entries entered after September 29, 2022 not be subject to any measures applying AD/CVD duties.

The Court further concluded that Custom’s regulation 19 C.F.R. § 165.15(d)(1) which requires that notification “of its decision to initiate an investigation to all parties to the investigation no later than five business days after day 90 of the investigation,” and “no later than five business days after day 90 of the investigation” is arbitrary and capricious and does not provide an importer with a meaningful opportunity to be heard before a deprivation occurs. See Royal Brush Mfg. v. United States, 75 F.4th 1250, 1258 (Fed. Cir. 2023).

In regard to Custom’s determinations regarding Plaintiff’s failure to comply with Custom’s requests, the Court found substantial evidence existed to support both Custom’s determination as well as the application of an adverse inference. Customs detailed eight distinct instances of false statements and omissions by Kales/Engga and Starry; including a failure to report affiliated companies, failure to provide business documentation or provision of false documentation, and failures to participate in verification processes.

However, the Court determined that Custom’s EAPA determination was not supported by substantial evidence. Substantial evidence entails “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 217 (1938). Considering that only one-third of the quartz was found to be of Chinese origin, despite the inaccuracies on the record, this limited instance cannot be extended to 100% of the product by the same principle expressed in Ad Hoc Shrimp Trade Enf. Comm. v. United States, 632 F. Supp. 3d 1369 (CIT 2023). Without an adverse interest determination, the Court expressed that an EAPA determination would be contrary to law. However, as Customs made an appropriate adverse inference determination based on the record, the decision stands.

Superior also maintained that while the upstream Vietnamese companies provided false statements and omissions in their responses to Custom’s inquiries, Superior provided accurate and complete answers only. It also maintained that it did not intentionally or negligently enter merchandise covered by the AD/CVD orders and should therefore not be subject to enforcement as EAPA has an intent and culpability requirement. This court rejected Superior’s argument holding that Congress did not impose a culpability requirement, stating that, “EAPA read as a whole supports [Customs’] strict liability interpretation of the definition of evasion.” Ikadan Sys. USA, Inc. v. United States, 639 F. Supp. 3d 1339, 1349 (CIT 2023). The Court further held that the application of an adverse interest against Superior, for upstream companies’ failure to respond during investigation was appropriate citing that, “[a]lthough it is unfortunate that cooperating respondents may be subject to collateral effects due to the adverse inferences applied when a government fails to respond to Commerce’s questions, this result is not contrary to the statute or its purposes, nor is it inconsistent with this court’s precedent.” Fine Furniture (Shanghai) Ltd. v. United States, 748 F.3d 1365, 1373 (Fed. Cir. 2014).

The Court deemed other procedural issues raised by Superior as waived for failure to raise them in its complaint. Ultimately, this Court upheld Custom’s determination regarding violation of the AD/CVD provisions and EAPA, applying adverse inferences to all parties including Superior. However, the Court granted summary judgement on certain procedural DP issues in favor of Plaintiff and suspended the interim and final measures for goods entered after September 29, 2022.