Victaulic Sues CBP in Trade Court Over Alleged Misclassification of Sprinkler Parts
Patented VicFlex sprinkler brackets are properly classified as “parts” of machines for dispersing or spraying liquids under tariff schedule subheading 8424.90.9080 and not subject to Section 301 duties, Victaulic said in a July 15 complaint to the Court of International Trade (Victaulic Company v. United States, CIT #22-00022).
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Victaulic had imported the VicFlex sprinkler brackets between January and July 2019 under the subheading 8424.90.9080 as “Mechanical appliances…for projecting, dispersing or spraying liquids…parts thereof…parts…other…other.” The subheading carried a general duty rate of zero percent but was subject to a Section 301 additional rate of 25% at the time of entry. In 2020, the Office of the U.S. Trade Representative granted retroactive Section 301 tariff exclusions for items in List 3, including an exclusion for the entirety of subheading 8424.90.9080. USTR then instructed importers seeking refunds to protest the liquidations.
Victaulic then filed protests hoping to get Section 301 duties refunded. However, CBP denied those protests and reclassified the entries under subheadings 7326.90.8688 as “Other articles of iron or steel…," dutiable at 2.9% and 8424.89.9000 as “Mechanical appliances …for projecting, dispersing or spraying liquids or powders;…Other Appliances…Other...,” dutiable at 1.8%. Both reclassified subheadings are not eligible for Section 301 exclusions.
Victaulic argued in its complaint that the VicFlex Brackets are properly classified as “parts” because the brackets are "an integral part of the sprinkler system, without which the sprinkler system would not work as intended."
The brackets are not generic, Victaulic said. They are "specifically sized and designed exclusively for use with specific Victaulic sprinkler hoses ... and provide an indispensable structural framework for the sprinkler to function." Further evidence for the "parts" classification is that the brackets and the associated sprinkler hose are tested and approved "only together" by certification bodies for use in fire protection systems. No other product could be combined with the subject brackets without violating the fire protection certifications and the laws implementing those standards, Victaulic said.
Victaulic argued that the brackets cannot be excluded from Chapter 84 because they are not “parts of general use” and the assembly is not a fully working unit by itself and cannot be classified as a mechanical appliance under subheading 8424.89.9000. "The VicFlex Assembly is clearly integral" to dispersing liquids in fire suppression, used solely used for the system, and "essential to the operation of the [fire suppression] system," it said.