CIT Rules Certain Watch Boxes Are Duty-Free Packing Containers, Not HTS 4202
In Citizen Watch Co. of America, Inc. v. U.S, the Court of International Trade ruled that certain imported watch boxes entered separately should be classified as “other packing containers” under HTS 4819.50.40 (duty-free), instead of U.S. Customs and Border Protection’s classification as “jewelry boxes and similar containers” under HTS 4202.99.90 (20% duty).
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Citizen’s Cardboard Watch Boxes Can Only Open & Close 10-50 Times
The watch boxes at issue are specially fitted boxes designed to hold a single watch. They are made of non-corrugated cardboard, are cylindrical in shape, and consist of a removable lid and a base. Each box is capable of 10-50 cycles of opening the box, removing the watch, and then replacing the watch and closing the box.
CBP Says the Watch Boxes Are Like HTS 4202 Jewelry Boxes & Similar Containers
CBP argued that the watch boxes are properly classified under HTS 4202.99.90 as jewelry boxes and similar containers because they possess the same essential characteristics as the exemplars of heading 4202, which include jewelry boxes and similar containers, of “organizing, storing, protecting, and carrying.”
Citizen Claims Its Watch Boxes Lack Durability, Long-Term Use Features of 4202
Citizen argued that “organizing, storing, protecting, and carrying” are also characteristics of containers classifiable under heading 4819. It further argued that that its watch boxes lack one of the determinative characteristics of heading 4202 -- durability or suitability for long-term use. According to Citizen, the boxes were primarily designed to be recyclable and can only be opened and closed a limited number of times.
CIT Says HTS 4202 Durability Needs to be Adequate to Store and Protect for Years
CIT stated that to be classified under HTS heading 4202, an item must be suitable for long-term use, which is not defined in the Explanatory Notes. CIT cited a CBP ruling (HQ 951028) on long term use as persuasive for Citizen’s claim. In that ruling, CBP concluded that jewelry boxes need not be designed to have durability comparable to that of articles for which they are intended, to be suitable for long term use under heading 4202. Rather, jewelry boxes are suitable for long-term use under heading 4202 if they are “sufficiently well constructed to provide durability adequate” to store and protect an item for many years after sale.
Using Ruling’s Reasoning, Jewelpak Factors, CIT Agrees with Citizen
After considering CBP’s ruling and the “Jewelpak II” factors, the court concluded that Citizen’s watch boxes are not suitable for long-term use, and the proper classification of the watch boxes is HTS 4819.50.40.
(The "Jewelpak II" factors are: (1) physical construction of the merchandise; (2) ability of the merchandise to protect as well as store watches, (3) design and marketing of the merchandise; and (4) expectation of both jewelry retailers and the ultimate purchaser that these boxes will survive repeated handling.)
(Slip Op. 10-94, dated 08/18/10)