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Wholesale Jewelry Retailer Seeks Original Classification of Its Jewelry Boxes

Importer and jewelry distributor Gunther Mele Limited fought for its preferred classification of its custom jewelry boxes, in an Oct. 28 complaint at the Court of International Trade. Arguing that CBP previously liquidated many of its jewelry boxes at its preferred rate, Gunther Mele also said that the clear make up of the boxes should qualify them for the importer's preferred tariff classification.

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Gunther Mele brought in the boxes between 2010 and 2013 through the port of Buffalo, New York, under Harmonized Tariff Schedule subheading 4202.99.10, dutiable at 3.4%. The subheading provides for "other containers of plastic wholly or mainly covered in paper." CBP, after having signed off on this classification for many other of these jewelry box entries, then changed the tariff classification of the merchandise to 4202.92.90, since a CBP analysis found that the boxes were coated with an acrylic type plastic. The new HTS subheading upped the duty rate to 17.5%.

In the complaint, the importer characterized the imports as being boxes of two types: one covered with paper without any sort of plastic treatment and the other being processed with a de minimis plastic treatment. This de minimis level of plastic does not qualify the jewelry boxes for this new rate, Gunther Mele argued. "Although the paper covering the jewelry boxes was treated with a de minimis amount of plastic, the plastic treatment was neither visible nor tactile and therefore does not constitute the outer surface for tariff purposes," the complaint said.

Gunther Mele also argued that CBP's reclassification of the boxes violated the "treatment" statute which requires CBP to publish a decision that modifies its past treatment of "substantially identical transactions." CBP has consistently liquidated the boxes under the importer's preferred HTS subheading. CIT has previously ruled that CBP's consistent liquidations, following the review of examining the product, constitutes such "treatment."

"Customs failed to publish notice of the decisions embodied in these liquidations in the Customs Bulletin and seek public comment on same, in violation of 19 U.S.C. § 1625(c)(2)," the complaint said. "Accordingly, plaintiff is entitled to a refund equal to the difference between the rates of duty assessed on the merchandise on liquidation and the rate of duty claimed by the importer in its protests under subheading 4202.99.10, HTSUS, together with all applicable interest."