Shamrock Asks Trade Court for Summary Judgment in Electrical Conduit Case
Imported carbon steel tubing lined with epoxy coating is properly classified in the tariff schedule as steel tubing, not insulating fittings, because testing shows the tubing does not meet a specific electrical resistance threshold, the government said in its Aug. 11 cross-motion for summary judgment at the Court of International Trade (Shamrock Building Materials v. United States, CIT # 20-00074).
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Shamrock, the importer, purchased the tubing from a Mexican manufacturer. Prior to importation, the manufacturer applied an epoxy coating. Shamrock entered the items under heading 8547 of the Harmonized Tariff Schedule of the U.S. as "Insulating fittings for electrical machines, appliances or equipment ..." duty-free at the time of entry and the rigid conduit under heading 7306 as "Other tubes, pipes and hollow profiles ..." with 25% Section 232 duties at the time of entry. CBP classified all three products under heading 7306 and denied a protest by Shamrock.
The government argued in a May 2 brief that classification will turn on the question of whether the coating qualifies as “insulating material” under subheading 8547.90.00. "Insulating materials" must pass an actual resistance test and meet a specific threshold, which the material did not meet, according to expert testimony.
Shamrock argued that an independent lab's chemical analysis of the epoxy confirmed the epoxy resin lining is made up of melamine and silicone, which Shamrock said are "universally recognized" as electrically insulating materials. Shamrock also said the common meaning of “insulating material,” the explanatory notes to heading 8547, and a previous CIT case involving Wheatland Tube all support its assertion that the epoxy is an insulating material. Shamrock asked the court to overrule CBP's classification of the tubing, enter judgment that the imported merchandise at issue is properly classifiable in subheading 8547.90.0020, and order the entries to be reliquidated with a refund of duties plus interest (see 2206060035).
Both parties performed electrical testing and evidence shows the coating doesn't prevent the flow of electricity, which means the conduit is "precluded from classification in Heading 8547 because it is not lined with insulating material," the government said. The subject electrical conduit is properly classified under 7306 because it's tubing made entirely of welded carbon steel.