CAFC Reverses CIT and Classifies Bottle and Jug Wraps at Lower Duty Rate
In Outer Circle Productsv U.S., the Court of Appeals for the Federal Circuitreversed the Court of International Trade, ruling that bottle and jug wraps are properly classified as "table, kitchenwareof plastics, other" under Harmonized Tariff Schedule subheading 3924.10.50 at 3.4 percent ad valorem and not as "bottle caseswith outer surface of sheeting of plastic or of textile materials, other" under subheading 4202.92.90, at 19.3 percent ad valorem.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The bottle and jug wraps are soft-sided, flexible wraps constructed of a PVC closed-cell thermal-insulating foam layer. The interior surface is covered with either a fabric or vinyl sheet, and the exterior surface is covered with a vinyl sheet.
They were designed, manufactured and marketed for the primary purpose of containing beverages and keeping them cool. The bottle or jug wraps were designed to accommodate a one liter, half gallon, or two gallon plastic bottle or jug. However, as imported, the bottle and jug wraps did not contain any bottles or jugs.
The CAFC cited a prior decision, SGI. Inc. v. U.S. (CAFC 96-1272 decided September 5, 1997), in which the Court determined that heading 4202 does not include containers that organize, store, protect, or carry food or beverages.
The CAFC stated that the CIT erred by finding the bottle or jug wraps were not containers that organized, stored, or carried food or beverage. Further, the CAFC found that the CIT also erred in its determination that the bottle wraps could not be considered an insulated beverage container without the addition of the requisite bottle or jug.
The CAFC stated the bottle or jug wraps like the articles in SGIwere not designed to hold uncontained food or beverage, but, were designed to organized, stored, protected, or carried food or beverage and therefore they could not be classified under HTS heading 4202. Thus, the CAFC ruled that they are properly classified under HTS subheading 3924.10.50 at 3.4 percent ad valorem.
(See ITT's Online Archives or 02/25/09 news, 09022550, for BP summary of CIT decision.)
CAFC decision 09-1179 (dated 01/05/10) available athttp://www.cafc.uscourts.gov/opinions/09-1179.pdf