CIT Disallows NAFTA Duty-Free Classification for Refrigerator Control Box Subassembly
In Whirlpool Corporation v. U.S., the Court of International Trade granted summary judgment to the U.S. Customs and Border Protection, ruling that certain refrigerator control box subassemblies are an automatic controlling apparatus under HTS 9032.89.60 and subject to a duty rate of 1.7 percent.
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Whirlpool had imported refrigerator control box subassemblies from Mexico, which consisted of a thermostat, defrost timer, light socket, and wire harness, all contained in a plastic housing. They argued that these control boxes should be classified under HTS 8537.10.90 as "Boardsand other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control " (If these control boxes were classified under HTS 8537, they could qualify for NAFTA duty free treatment).
Whirlpool asserted these control boxes were equipped with two or more apparatus described in HTS heading 8535 or 8536, for electric control. The CIT, however, stated that both the thermostat and defrost timer in the control boxes are not for electric control. Instead, they send electrical signals to other parts in the refrigerator to control temperature as a consequence of information sensed. Therefore, the CIT ruled, they are not classified under HTS 8537.
CBP had classified and liquidated these imported subassemblies under HTS 9032.89.60 as "Automatic regulating or controlling instruments or apparatus; parts and accessories thereof," assessing a duty rate of 1.7 percent.
Whirlpool initially argued that the control box was not an apparatus as termed by HTS 9032, because the components had several functions rather than a single purpose. The CIT, while agreeing that the control box consisted of several components with independent functions, stated that an apparatus does not need to have all of its components sharing a common purpose.
Whirlpool next argued that the control box, in its entirety, is not an apparatus under HTS 9032 since it performs functions other than just controlling temperature. The CIT stated that the defrost timer and thermostat regulate temperature; while the wire harness sends electrical signals to and from the other components in the control box, clearly contributing to the function of controlling temperature. Thus, the CIT ruled, the intended purpose and most important function of the control box as a whole was the automatic regulation of temperature, and is therefore, properly classified under HTS 9032.89.60.
CIT Slip Op. 07-111 (dated 07/18/07) available at: http://www.cit.uscourts.gov/slip_op/Slip_op07/07-111.pdf