Importer Says Its Products Are the Basis for Section 301 Exclusion That CBP Denied It

The original Section 301 tariff exclusion had been specifically granted to importer Mitsubishi Plate America by the Office of the U.S. Trade Representative for the exact product type in question now, it said. So, if the court disagrees with its proposed classification, it should order USTR “to revise the language of the subject exclusions to reflect the correct underlying classification,” it said.

When Mitsubishi entered its relevant shipments between 2018 and 2020, it classified them under Harmonized Tariff Schedule heading 3815, it said. CBP reclassified them under heading 8421, increasing the importer’s duty from 0% to 25% because goods entered under heading 3815 have been excluded from Section 301 tariffs since 2018, it said.

Heading 3815 covers “late-type supported catalysts (reaction accelerators) for reduction of nitrous oxides,” it said. This, it said, described its own products.

To produce its own merchandise, catalyst plates are processed into catalyst units, which are then further combined with components such as metal bars and spacers to be further processed into catalyst blocks, Mitsubishi explained in its brief. These blocks, it said, are then used in the air quality systems at coal-burning power plants.

It argued that the “only function” of a catalyst unit is to “promote or facilitate a chemical reaction,” the conversion of nitrous oxides to nitrogen and water, and that the block returns to its “original form” after doing so -- nothing is added or removed during the reaction, it stressed. These catalyst units impart the essential character of the blocks, it said.

It also claimed that the blocks aren’t filters, purification devices or catalytic converters, such as those covered under CBP’s preferred heading. Specifically, heading 8421 covers “centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases,” it said.

“Plaintiff’s understanding of Defendant’s argument is that Supported SCR Catalyst Blocks would fall under the umbrella of ‘filtering or purifying machinery and apparatus, for … gases,’” it said.

It said that the U.S. was claiming, “without providing any evidentiary support or analysis and ignoring voluminous record evidence to the contrary,” that the catalyst function of Mitsubishi’s blocks filters fossil fuel combustion gases.

But the terms “filter” and “purify,” based on common English dictionaries, trade usage and past Court of International Trade cases, refer to a process of removing unwanted particles or materials from a substance, it claimed. It said its blocks don’t match the usual defined processes for filtration or purification -- ”they are not used such that a gas or liquid is passed through them to separate matter” -- and don’t remove any substances.

However, even if the trade court does find that Mitsubishi’s products should be classified under a different heading, the Section 301 tariff exclusions should still apply, it argued.

“MPA originally applied for the exclusions, the USTR granted the exclusions for the Subject Merchandise, and the language of the exclusions describes the Subject Merchandise as outlined above,” it said.

It said USTR should be ordered to “retroactively revise” the language of the exclusion to include the corrected heading, “as USTR has done in the past.” Mitsubishi argued it had “detrimentally relied on the specific grants of the exclusions by the USTR to the Subject Merchandise.” The U.S., it said, had to be “equitably estopped from denying the application of the exclusions to the Subject Merchandise regardless of the primary underlying classification.”