CBP Proposes to Limit Court Decision on 9505 Duty-Free Entry for "Festive" Table Linen/Rugs
U.S. Customs and Border Protection (CBP) has issued a Customs Bulletin notice requesting written comments by July 29, 2005 on its proposal to limit the application of the decisions of the Court of Appeals for the Federal Circuit (CAFC) and the Court of International Trade (CIT) in Park B. Smith Ltd. vs. U.S. (Park) to the specific cotton woven table linens and cotton woven dhurry rug entries before the courts in that litigation.
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(According to CBP, under the CAFC's decision in Park, subject table linen/rugs with a symbolic content associated with a particular recognized holiday, such as Christmas trees, Halloween jack-o-lanterns, or bunnies for Easter, were classified as HTS Chapter 95 duty-free festive articles.
Also under the Park decision, CBP states that subject table linens/rugs that, by their design and symbols, were directed to a specific festive holiday, and for which their use at times other than that holiday would be aberrant, were to be classified as HTS Chapter 95 duty-free festive articles.)
New Explanatory Note Excludes Festive Articles w/Utilitarian Function from 9505
CBP states that it is proposing to limit the application of the court's decision, in part, because the Explanatory Notes for HS 9505 were amended in August 2003 by the addition of the following exclusion (which CBP states was clarifying in nature):
"The heading also excludes articles that contain a festive design, decoration, emblem or motif and have a utilitarian function, e.g. tableware, kitchenware, toilet articles, carpets and other textile floor coverings, apparel, bed linen, table linen, toilet linen, kitchen linen."
According to CBP, this amendment comports with the language of the CIT's 1996 decision in Midwest of Cannon Falls vs. U.S., which ruled that mugs and pitchers with depictions of jack-o-lanterns were functional and according to the Explanatory Notes, classified in HTS 6912. (See ITT's Online Archives or 04/15/04 news 04041540 for BP summary of 2003 Explanatory Note amendment.)
CBP Seeks to Limit Park so Court Can Examine New Explanatory Note, Etc.
CBP states that it is seeking to limit the decision in Park to the litigated entries so that the Court will have the opportunity to examine the scope of heading 9505 in concert with the amended Explanatory Note. According to CBP, the failure to limit the decision in this case and seek relitigation of the scope of heading 9505 will present CBP with extraordinary administrative difficulties and place the U.S. out of step with its trading partners who utilize the Harmonized System.
In addition, CBP states that U.S. industries competing with importers enjoying a "festive" classification that is denied to U.S. exporters of the same merchandise by trading partners will find themselves disadvantaged.
CBP Proposes to Limit Park Pursuant to 19 USC 1625(d) and 19 CFR 177.10(d)
CBP states under 19 USC 1625(d), Congress has specifically recognized Customs authority to limit a court decision. Customs regulations at 19 CFR 177.10(d) are also germane:
Under 19 USC 1625(d), a decision that proposes to limit the application of a court decision shall be published in the Customs Bulletin together with notice of opportunity for public comment prior to a final decision. In addition, under 19 CFR 177.10(d), a published ruling may limit the application of a court decision to:
the specific article under litigation, or
to an article of a specific class or kind of such merchandise, or
to the particular circumstances or entries which were the subject of the litigation.
-Written comments due by July 29, 2005
CBP contact: Cynthia Reese (202) 572-8812
Customs Bulletin, page 33 of 'General notices' (Vol. 39, No. 27, dated 06/29/05) at http://www.cbp.gov/linkhandler/cgov/toolbox/legal/bulletins_decisions/bulletins_2005/vol39_06292005_no27/39genno27.ctt/39genno27.pdf
BP Notes
The 2007 U.S. Harmonized Tariff Schedule (HTS) is also scheduled to contain a new note 1(v) to Chapter 95 that would exclude "tableware, kitchenware, toilet articles, carpets and other textile floor coverings, apparel, bed linen, table linen, toilet linen, kitchen linen, and similar articles having a utilitarian function (classified according to this constituent material)." (See ITT's Online Archives or 04/25/05 news, 05042505 for BP summary of ITC preliminary report on proposed HTS changes for 2007)
CBP states that it waited for the Park litigation to conclude before taking this action, which occurred on April 6, 2005 when a Stipulated Judgment Order was issued.