richard o'neill we represent place your way industries question in this case is whether the merchandise to pleasure way reimported into the united states qualify for entry under the repairer alteration provision of  pleasure way why it's finished by miller chrysler sprinter vans from dealers in the united states these brands are ready to go there warrantied they have a vehicle identification number that identifies them as finished vehicles place your way then take cities into canada where it up fits the cargo compartment of the vans and it turns them into class people or homes now if you see one of these things driving on the road and we've all seen a sprinter van the class b motorhome won't look any different from the outside from the inside it will have seen us in the cargo bag that will be fitted there will be a bad perhaps for television a rudimentary is well i mean people use cargo van should take various things around with them you can use it for loose packages you can put a tool rack in there and use it as your professional carpentry or electrician van and in this case people put sleeping in living and that's a cargo if you will that they drag around with them or travel around with us now the court of international trade the night us prepare an alteration treatment for two reasons so we think they were both in error first the port said can is offended use and essential characteristics debate that let me think is present the challenge why isn't it at quite straightforward conclusion that a class b motorhome is a commercially different good from the cargo carrier for a couple reasons your honor first of all if it's twice the price people are basically using it for commercially different purposes  that's not going to be used inside the van but yeah going to be carried around for use taking a nap or question is there or have we created a new and different article of commerce and the answer is no because the important thing to understand about the repair and alteration stature is not really a classification statute it's an identification statute and a good part of its purpose is to avoid double taxation so that if we have a finished article that we are export from the united states and we was to make an eagle glass the article leaving the united states or something was not a meal so it was not a finished art on the length let me interrupt the example that is given about the glass specifically says that the foreign operations here it's the e and tempering operations exceeds the scope of an alteration because they are manufacturing processes which create eight commercially different products so i don't actually view that as at maybe having anything to do with but certainly has not limited to the intended use concept a concept that is you know presents a perfect ambiguity about whose intent counts that's why it seems to me pretty straightforward to focus on the commercially different goods element of i guess it's actually subsection a not subsection b if the etching and tempering create a commercially different good why doesn't what united states to be embroidered in return for now customs said well the embroider t shirt is a new and different article made in mexico this short leaving from mexico was not a finished article but then customs on reconsideration take a concluded that the shirts as i exported were finished goods because they were sold in the united states that transport people eliot and they would sell them that way and the same thing is true here we have a design with chrysler van that is sold out way what comes back you know in terms of you say a commercially different good what comes back is simply a dime with chrysler van that's been upgraded you know sort of like a car that's been hot rodded now car and there's a war the on the car i am now putting something in the back of the car or the truck is at work i'm going to put a refrigerator in there and a refrigerator has a separate warranty the comes from its manufacturer so now when the truck returns to the united states there's two warranties there one is a war the on the truck issue but i'm a chrysler in this case the other might be a warranty for the refrigerator either issued by the refrigerator manufacturer or the person who installed it so i guys were class i'm going into canada right this room is most i believe what's canada provides or duty abatement for articles that are used in manufacturing operations and so i think when some of these vans traditionally entered canada they were canadian duties those duties were subsequently remitted because the operations pleasure way were doing were considered to be manufacturing operations under that statute but totally irrelevant to the united states statute what the states as articles for the transport of persons i live or perhaps transporting goods but here's the thing about the four factors that the court of international travel on the court of international trade said the essential characteristics of these fans were destroyed and for ways price tariff classification used in that they disregarded every physical aspect of these vehicles they didn't look at identification they didn't look at whether they were the same vehicle doesn't just look at his focus on this i think i have an intuition about what commercially difference means and something to do with the market in which it is being sold and who's buying it and for what purposes  intent whose intent those of problematic commercially different is a pretty familiar notion about what's happening in the marketplace well i think what it is your honor i think it's a question of identification the case i classification i think part of the problem here your honor is that i think people are thinking too far here this is not a question of abstractly classifying a good this is not even a question of whether we have manufactured  because manufacturing is expression we allowed under ninety eight zero to the only question here is whether we can identify the motorhomes coming back in the united states as being who are incorporated in the articles that were export from the united states and if so then the value of the article exported from the united states is not subject to tax and the value of all those improvements it's whether you essential commercially different good from the goods and that's that destroyed that the job characteristics of the good from the united states or or create a new harshly different why are those two different requirements either one of which if not satisfied doesn't allow the imported good to fall into the parent's ration statute but once again i think it's an identification test and the question is what are you going to use to say something to commercial a different judge but if somebody is going to use this to carry around their possessions instead of other type of cargo that would be in his view a new commercially different however this court and all of said a change in use doesn't disqualify and the test from dulles is no different from the test that i don't think you're answering the question i don't think you're answering my question so i thought that you were saying that you know in the regulations there's part a that talks about destroying the essential characteristics of the goods right and then there's another regulation part of that same regulation that sense creating new or commercially different those are today different requirements right if  is a good don't have a right there one of those then they're not satisfying their own pair or alteration statues right correct but in terms of commercial difference the court has to say what constitutes a commercial difference and if it's just a difference in the use if you're saying well i use this to carry loose packages now i'm using it to carry a bet that's not i think an appropriate test to say that's a new and commercially different article of commerce because if you say that then you could probably take any even minor alteration and say oh that makes it for different it's ok i have a truck to carry stuff around that i put in some racks to put me if you agree or disagree under the regulation one eighty one point six four a says here are a variety of things that you cannot to be in order to get the benefit of one of them that you cannot  is a commercially different grade b says there is a further exclusion to further exclusion it's not an alternative that doesn't add back something in that was already removed by yes ok and of the various determinations made by the court of international trade which ones are factual and therefore subject to clear air review and here and which ones are subject to general review in this case in terms of sign a statue and find ultimate classification our position is everything is subject to an overview there were no were no fast and issue so the court can actually look at the facts that everyone agreed to and determine whether the motorhomes subsection a and i would agree with the court i'm not sure we even have to go to what section one eighty one sixty four and you say but they are the envy so it's it's a question of law we can tend to use is different but if you actually look at the record and uses different evidence in the record that the motor homes are used to for season accommodation that's and that's been disputed and isn't disputed because it's actually in the deposition testimony that that's they sell the motor homes for our temporary residential accommodations the cargo vans are cargo pants they're meant to transport cargo so nobody n recliner bed television bathroom with a shower outside on eating outside shower you still have a cargo van and these are permanently placed inside the motor home the motor homes and they can't be removed they're they're meant to be stay and so we no longer have a cargo van so it's a bit different than the boom box and the mattress children as opposed to a bunch of options for those that are central i would respectfully disagree that that granny i would think that in my opinion are in the government's opinion that that's actually not  either destroy the essential characteristics or create a new commercially different good so if it does either one of those at fox yes that's what i was trying to get yes thank you and in this case isn't the cargo them to belittle you of the van to carry the cargo is now gone it's nothing in there but now living accommodation with the other thing i wanted to mention was that the warranty issue the warranty is solely on the chassis it's not on the actual motorhome the actual thing that changed in canada natural thing that gives that motor home it's its character that it defines what it is and that material refers to it as motor homes the documentation refers to as motor homes it doesn't refer to as cargo vans and they also give a coach invented it so it's not just cold the record considers the motorhomes different from part of ok can i ask you this question your brief i think it is fair to say tony a from wrong concentrates on the intended use element  and is there some is there some practical real world difference in effect of deciding that case on that basis compared to issue because we don't even get to whether something is complete or not because we already this you have already decided that the motorhomes are new and commercially different good or maybe it's the prophecies destroy the essential characteristic case then if we decided in your very wrong and we couldn't reach me the purpose of b is to make to ensure that it captures all sorts of products because if from the cases that you are citing from a question you might merchandise is imported into canada it's not being imported so essentially finished the product to make something that was totally unfinished in the united states right that i guess at least one way that i was trying to understand the relationship between these two things is that he says you know you can't be a different good and b says look even if you are the same good we really don't mean to capture let's call them intermediate  things that are not really consumer and use products and the pats what this incomplete is about it's taking out a category of truly intermediate components where there is not yet a commercial use of the thing aside from putting it into something else before it gets to whoever is the consumer right and sort of full stop but  what i don't really understand is and this is one reason that i it seems to be it's much easier to get a grip on the commercially different good if if pleasure way we're not the export or but i was the export are and i got a thousand sprinter fans and i took them into canada and then i had an auction pleasure away bought three hundred of them and you know  sprinter van of canada reseller brought bought another and both of them imported back into the u s the vehicles one of them having changed them into one and one of them not having to change them then i have no particular intent with respect to what the end product is whoever i'm going to sell it to is going to it's going to make the thing chrysler at time or chrysler intends both things because they sell them as ready to use cargo vans and they also say by the way you can really what's up fit them and make them into something else so their intent is that is the time that chrysler is intent covers both bases the intermediary may have no particular intent at which point i kind of get lost in how to get a grip on on intended use in a way that i don't when i look at commercially different good this miss my friends and i this point i think the problem that you having with intended use is because we're trying to put a few points on it if you put if you find it makes it impractical if we look at the original o e m then we don't have to put a viewpoint on i don't think there have to be a viewpoint in the in the case law there's not a single case that states we have to look from this viewpoint or that before it's just a basic comparison of the good looking at you know there's this good that is this goes the same it's just good looking at the names the uses the value there's there's no there's nothing about intent something that surprised me and you said you don't think the point of view matters because i think the point of view you're taking a point of view and your position in your brief i think it's the ultimate intended use that matters so you know taking a point of view the point of view of it's the same thing i understand what you're saying and it it's sort of the same thing i understand what you're saying but the case law doesn't speak to view of the case law again the chevron case is a perfect example it just looks at the goods it doesn't look at what do you mean what do you do with the hypothetical that i tried to describe where i'm the export from the us i'm going to and i have a whole bunch of these things and i know that some of them are going to come back into the u s up fitted some of them are going to come back you know with a which is in their condition as export and they weren't around at the time of that  import them back into the united states then then the regulation would apply and i and again i understand from  watch yourself on the floor and i mean what was you know we shot shoot ourselves when we brief we actually responding to their point like the whole thing of the pleasure waypoint was intended use the fans were complete before they were before their exports the united states me to canada so we had to respond there was no way not to respond in a way to respond to me say their argument is irrelevant because they lose all essential characteristics of the new article and once they lose on that name job right and that's not how you risk now and that's a great way to do it but we we would never be able to do that we as a as another party addresses a point we have to address that subsequently we can't dismiss it with one one percent i mean you did you did say that it's just that that was learned a colleague was speaking i took a look at judge musgrave's opinion a judge musgrave said that these were new and different commercial articles but you look at his opinion he didn't distinguish them from the essential identity factors he says they were new and different commercial articles because he felt that those essential identity factors of price tariff classification used and then had been changed idea of a new and different commercial article and this is the court's point that out if you look at the regulation it's or you know does not change the essential characteristics of an article or create a new and different  judge musgrave in the court below he used the essential characteristic factors as his springboard for deciding there's a new and different commercial article but judge from the right there is an oar in the regulations sa create a new and different commercial article now i think the question is what would the court do if you said you know what plaintiff you're right these factors that the judge cited are not the essential identity factors and these operations do not change the essential identity of the goods so we are now going to proceed to the second part of the regulation and ask is it a new and commercially different or now you can say what parameters are you going to use for that and frankly your honor is based on the cases that we would be entire incognita there has been no decision on that there is no precedent on that which says we didn't destroy the essential characteristics  article but because we have a new and different commercial article now you could say well sure all of the essential elements of these vans are in fact the wheelbase the engine the name the vin number that the warrant it and the court below from having said you know there's three different things that we're being asked to consider here and we're just going to rest on one of them and we're going to say we conclude as a matter of law this you you could say use you could say it's a change in classification but again that's fine and that may be factors this court says we will put into that test all i would say is go back to the dollars test and the dollars tests as changes in name changes in character changes in size changes in shape and change the use of the article as well as classification do not remove it from the scope of the repair and alteration test they say they don't they don't think what the courts are really saying as i said before this is a statute that's aimed at avoiding double taxation the supreme court has said that you don't you interpret the statutes to avoid double taxation wherever possible this is not a statute just to be given a strict constructionists to be given to relatively liberal construction i would put it to you what it where you please the basis for that would be a supreme court decision in tennessee versus w of international trade cases ten c i t seven ninety and they said double taxation is not a chill factor with defective or unconstitutional exercise of power it is not a preferred result of what the government's done here is they that's baked in the cake the more dollars on improvements the more more dollars are subject to assessments so the question here is if if if the court's going to say look you sexual characteristics are intact but we want to deal with this new  distinction between dealing with the way i read richard some to define the term alteration right well in richardson what they said was alterations was did not include a step in the initial production of an article you can't alter an article before it's been made and what that was was that was finishing that was we had an unplanned we'll room it was wasn't good for even the same part of the opinion i could send the silicone to canada chemically transform it into something completely new bring it back into the country it would have the same tariff last occasion as it went out that wouldn't be an alteration that might be a totally new chemical but it would be  for cation so all i'm saying your honor is if you're going to form a test for new and commercially different article that goes beyond the things enumerated in the regulation if you're going to say the essential identity factors here are here  but it's a new and different commercial article you're on terra incognita you're going to have to make i mean there's two things you can do you can either send the case back to the c i t and ask them for findings on the design of his own intended use my agreeing with product whatever qualify for parent alteration because if you measure it it stays ruinous accord beloved from the intention of the person who's performing the repairs the nothing ever qualifies what they're saying is if two people go into a dime a chrysler dealer and buy an identical dodge printer van on one day one guy drives it off the lot and uses it as is the other one sends it up the pleasure way to be altered what they're saying is the guy who drove his off as it is bought a finished good but the guy who bought the identical good incentive to candidate and buy a finished good and that's a real problem because if you view that from the subjective intent of the person performing the repair and if you carrying them it's still a finished article i mean it's an article that i'm with chrysler was manufacturers they made it they finished it they sold it they're not is you know this court noted in america many cases that's not a good distinction because any car will always carry people even if it's a cargo car and most vans carrying passengers will also have some cargo in it again if you're coming up with a new test i don't think tariffs classification is to test i don't think the subject of intent of the person doing the alterations that's ok thank you very much thank you he says to