CBP Limits Park B. Smith Court Decisions on 9505 Duty-Free Entry for Festive Table Linens/Rugs to Litigated Entries Only
U.S. Customs and Border Protection (CBP) has issued a Customs Bulletin notice advising interested parties that, effective April 5, 2006, CBP is limiting 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 linen and cotton woven dhurry rug entries before the courts in that litigation.1
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CBP states that it is taking this action under 19 USC 1625(d) and 19 CFR 177.10(d), which allows CBP to limit the application of a court decision.
9505 Festive Articles Expected to be Addressed in Future Court Decisions
According to CBP, the exercise of this authority is appropriate, in order to provide an opportunity to persuade the court to reconsider its interpretation of the term "festive articles" in light of the 2003 amendment to the Explanatory Notes for heading 9505, which would be a new issue before the court.
As there are several cases pending before the CIT involving the classification of merchandise as "festive articles"; CBP states that the meaning of the term "festive articles" and the scope of heading 9505 are expected to be addressed in the decisions of the court on these cases.
(In 2003, the Explanatory Notes for HS 9505 were amended to exclude 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. See ITT's Online Archives or 04/15/04 news 04041540 for BP summary of 2003 Explanatory Note amendment.)
Park Limitation Has No Effect on Midwest
CBP adds that limiting the application of Park has no effect on the decision of the court in Midwest of Cannon Falls,2 under which CBP continues to classify utilitarian articles as festive articles only if, like the merchandise at issue in Midwest (mugs and pitchers with depictions of jack-o-lantern), the utilitarian article is a three dimensional representation of an accepted symbol for a recognized holiday.
CBP states that the Park decision greatly broadens the scope of merchandise classifiable as "festive articles."
(See ITT's Online Archives or 07/01/05 news, 05070110 for BP summary of CBP's proposal to limit Park to litigated entries. See ITT's Online Archives or 07/05/05 news, 05070515 for BP update. See ITT's Online Archives or 09/27/05 news, 05092705 for BP summary of 2005 CBP classification/protest guidance on textile and non-textile festive articles (in light of Park).)
1CBP has previously stated that 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.
In addition, 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.
(Also note that with this limitation by CBP, the court decisions cannot be applied to Park B. Smith's other entries involving goods that are identical in all material respects to the specific litigated entries.)
2CBP believes that both the court decisions in Park and Midwest were clearly erroneous, and that it hopes to receive Skidmore deference, i.e. respect according to the power to persuade, in the next litigation of the interpretation of the term "festive articles." CBP adds that in relitigating the meaning of "festive articles", CBP will argue for adoption by the courts of the scope of heading 9505 as clarified by the amended Explanatory Note. CBP states that how the outcome of such a case will affect the Midwest decision is for the courts to decide.
CBP contact: Cynthia Reese (202) 572-8812
Customs Bulletin, begins at page 5 of 'General notices' (Vol. 40, No. 15, dated 04/05/06) at http://www.cbp.gov/linkhandler/cgov/toolbox/legal/bulletins_decisions/bulletins_2006/vol40_04052006_no15/40genno15.ctt/40genno15.pdf
BP Note
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)