CIT Rules on Classification of Certain Plastic-Coated Material
In Value Vinyls, Inc. v. U.S., the Court of International Trade reconsidered its classification decision, but denied the request to amend or change its ruling that certain plastic-coated material should be classified under HTS 3921.90.11 with a duty rate of 4.2%.
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The government had filed a Motion for Rehearing and Reconsideration, believing the CIT had erred in its original classification decision by (1) placing undue reliance on ITC Pub. 1400 and (2) failing to apply the traditional classification process to determine the classification. (ITC Pub. 1400 was a congressional report provided at the time of the adoption of the HTS, which reflected an essentially revenue-neutral conversion of the existing tariff numbers in the former Tariff Schedules of the United States (TSUS) to the new HTS.)
The imported product at issue consisted of a tarpaulin type material, in chief value of man-made fibers; of 82% plastic and 18% man-made textile fiber by weight. The CIT concluded that under the former TSUS, this type of product would have been classified under item 355.81 with a duty rate of 4.2%.
Although both parties agreed that the correct classification in the HTS was under HTS 3921 ("Other plates, sheets, film, foil and strip, of plastic"), they disputed whether it should be classified under 3921.90.11 at 4.2% or under 3921.90.19 at 5.3%.
In Slip Op. 07-17, the CIT, stating it had followed the language of the statutes and had taken into consideration Congress' intention to essentially have a revenue-neutral conversion to the HTS, ruled the correct classification was under HTS 3921.90.11 at a rate of duty of 4.2%.
In this reconsideration the CIT again stated that it had correctly used traditional classification processes, while also taking the legislative intent into account. In addition, the CIT noted that the government had not presented any evidence in this Rehearing to show that Congress had intended to increase the duty rate beyond the 4.2% for this product. Accordingly, the CIT denied the government's motion for the requested amendment to its original classification decision.
CIT Slip Op. 07-17 (dated 01/30/07) available at: http://www.cit.uscourts.gov/slip_op/Slip_op07/07-17.pdf
CIT Slip Op. 07-114 (reconsideration, dated 07/20/07) available at: http://www.cit.uscourts.gov/slip_op/Slip_op07/07-114.pdf