CAFC Affirms CIT Classification of Australian Nickel Carbonate under HTS 7501.20.00
In MetChem, Inc., v. U.S., the Court of Appeals for the Federal Circuit affirmed the Court of International Trade's ruling that basic nickel carbonate from Australia was properly classified under subheading 7501.20.00 of the Harmonized Tariff Schedule.
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In March 2003, MetChem imported nickel carbonate that was produced in Queensland, Australia by a Caron process. The Caron process is a hydro-metallurgical process of refining laterite ore into nickel metal sinters. MetChem made entry under HTS 7501.20.00, a provision for "Nickel oxide sinters, and other intermediate products of nickel metallurgy" (duty free).
However, Customs issued a ruling in which it stated that basic nickel carbonate should be classified as a carbonate. Based on this ruling, Customs changed the classification and liquidated MetChem's imports under HTS 2836.99.50, a provision for "Carbonates; peroxocarbonates (percarbonates); commercial ammonium carbonatesOther" at 3.7% duty rate. MetChem challenged this decision.
The CIT noted the basic nickel carbonate did not have a constant ratio of elements, and therefore, it was not a separate chemically defined compound. As such, this material was excluded from classification in Chapter 28 of the HTS. The court ruled that nickel carbonate was an intermediate product of nickel metallurgy and it was properly classified under HTS 7501.20.00.
On appeal, the CAFC agreed with the CIT that the subject merchandise consisted of several chemical compounds in a variable ratio, which excluded its classification in HTS Chapter 28.
Further, the CAFC stated that the nickel carbonate was removed during the metallurgical process of producing nickel oxide sinters after the chemical leaching and distilling was performed on the laterite ore. The Court noted that the removal of nickel carbonate did not change the fact that the product was, before this removal, an intermediate product of nickel metallurgy.
CAFC decision 07-1138 (dated 01/22/08) available at: http://www.cafc.uscourts.gov/opinions/07-1138.pdf