I have heard reports that imports of aluminium or steel parts are being reclassified by the ABF regarding the application of anti-dumping duties. The situation appears to occur when an import declaration is routed red line on lodgement and the ABF then determines the goods are properly classified to, for example, 7604 as aluminium extrusions rather than as parts. This is particularly concerning where the subject goods have until then been classified as parts, not only because of the potential risk of penalties being imposed, but also because of the consequential huge increase in duties payable.

If we ignore the need for all parties to be properly trained in tariff classification and anti-dumping, how does a broker respond to such a situation? As you know, while industry has often requested a ruling system for anti-dumping similar to that which exists for tariff classification and valuation, no such decision from the regulator is available. Brokers can lodge applications for tariff advice, however, this may not be determinative and, as we have all experienced, many importers are unwilling to pursue an appeal via s.273GA to the Australian Administrative Appeals Tribunal.

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The decision in this matter will therefore be of great interest to customs brokers faced with similar quandaries. This matter concerned the tariff classification of aluminium extrusions in profile form imported by the Applicant, Solu Pty Ltd (“Solu”) from China. The ABF contended that the goods were classified 7604. The importer contended that they were classified as furniture parts to 9403 or 8302 depending upon the particular good. The ABF placed great store on the requirement for the goods to be cut to size after importation and that as imported they were in varying long lengths. They claimed that the imported goods were “materials” as it was only after importation that they were further worked (i.e. cut) into “parts”.

The AAT response: Firstly, heading 8302 does not provide that the classification of goods under this heading must be of a specific length or size. Secondly, while the subject goods are often cut to size after importation, the process of cutting the subject goods to size or at an angle after importation does not alter the design or use of the goods, and does not affect the classification of these goods as the complete or finished good …. No further modification or working of the goods is required. They are merely glued into place on installation (except for the Mounting Track) and in some instances they can be installed into furniture in the size as imported………

Cutting to size does not change or alter the design or use of the aluminium rails, aluminium edge profiles and cabinet finger recess. As presented, at the time of importation, the incomplete or unfinished article has the essential character of the complete or finished article. The goods are not substantially transformed or worked before installation into cabinetry and are as such not “materials” but “parts” for furniture.

It will be interesting to see if ABF appeal this decision of the AAT. Meantime, given this interpretation of “parts” v “materials” has been a long held practice of the ABF, it may be timely to review the tariff classification of materials / parts imported by clients that require only being cut to size before installation.

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