CIT Rules That Duty-Free Entry Under 9817.00.50 Requires Demonstration of Intent at Time of Importation
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In Tradewind Farms, Inc. v. U.S., the Court of International Trade denied duty-free entry under HTS 9817.00.50, a provision covering implements to be used for agricultural or horticultural purposes, as Tradewind Farms (Tradewind) had not satisfied the notice of the intended use requirement required by regulation.
Tradewind had imported "Model Kit 2000" (Kit 2000), a clear plastic clamshell container, with a top that sealed the container when filled. On entry, Tradewind self-classified the Kit 2000 under HTSUS 3923.10.00, as an article for conveyance or packing of goods, based on rulings it had received from Customs. A timely protest was then filed by Tradewind claiming Kit 2000 had been imported for agricultural or horticultural use and was therefore eligible for duty-free entry under HTS 9817.00.50.
HTS 9817.00.50 covers "machinery, equipment and implements to be used for agricultural or horticultural purposes," which is a classification controlled by actual use. In accordance with this requirement, Customs issued regulation 19 CFR 10.133, which provides the conditions that must be met when the tariff classification of an article is controlled by its actual use in the United States. "The conditions are that: (a) such use is intended at the time of importation. (b) the article is so used. (c) proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption." Customs regulation 19 CFR 10.134 further states that a showing of intent can be made by filing a declaration as to the intended use with the entry, or by entering the proper HTS provision, but only if Customs is satisfied the merchandise will be so used. Thus, the CIT stated the regulations require an importer to demonstrate a clear intention of the actual use at the time of importation.
Tradewind insisted that while it had not filed a declaration of intended use or entered the merchandise under an actual use provision, its protest of the classification was evidence that the Kit 2000 was imported for agricultural or horticultural purposes. The CIT stated that the language in the regulations was clear, and the filing of a protest could not be substituted for the specific regulatory procedures. In addition, the filing of a "protest one year after is simply not evidence of the presence of the necessary intention at the time of entry."
CIT Slip Op. 07-62 (dated 04/30/07) available at: http://www.cit.uscourts.gov/slip_op/Slip_op07/07-62.pdf