CAFC Remands to CIT Classification of Certain Plywood Made in Part of Virola (for Misinterpretation of "Commercial Meaning")
In Timber Products Co., v. U.S., the Court of Appeals for the Federal Circuit (CAFC) declined to affirm the Court of International Trade's (CIT's) determination that certain Brazilian plywood made from wood of differing species is classifiable under HTS 4412.14.30 (1997) a residual provision for plywood rather than under HTS 4412.13.40 (1997, duty-free), which includes plywood made in part from Virola wood. The case is remanded to the CIT as the CAFC believes it misconstrued the requirements for establishing a commercial meaning for "Virola."
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According to the CAFC, Timber had argued that the term "Virola" is a commercial designation in the plywood trade for a group of approximately 35 "near-species" of tropical hardwood with similar physical properties, including density.
However, the CIT rejected Timber's assertion, stating Timber had presented no evidence of a commercial meaning for "Virola" outside of the plywood trade, noting that "Virola" appears in several HTS Chapter 44 subheadings for types of wood other than plywood.
The CAFC states that the relevant trade for analyzing whether a tariff term has an established commercial meaning is determined by the merchandise before the court in a particular case, not by all merchandise to which the tariff term might apply. Therefore, the relevant trade for commercial designation purposes is the wholesale plywood trade.
As the CIT erred in its application of the commercial designation test, the CAFC states that the CIT's decision is vacated and the CAFC instructs it to consider on remand whether Timber proved a commercial meaning. (See ITT's Online Archives or 06/18/04 news, 04061835, for BP summary of the CIT's ruling.) (Slip Op. 04-1459, dated 07/27/06, available at http://www.fedcir.gov/opinions/04-1459.pdf )