CIT Rules Diaper Controls Classification of Machine That Makes Them

(In May 2005, National Presto Industries, Inc. imported an adult diaper making machine into the U.S. Upon liquidation in July 2006, CBP classified the merchandise under HTS 8479.89.9897 (2.5%), which provides for other machines not specified or included elsewhere in Chapter 84. Presto filed a protest asserting that proper classification under heading 8441. The protest was denied and Presto commenced action in the CIT.)

Presto Said Diapers Are Paper Pulp Articles, Machine Should be Duty-Free 8441

Presto argued that because its diaper making machine produces articles of paper pulp, it should be classified under duty-free HTS 8441.80.0000, which provides for other machinery for making up paper pulp, paper or paperboard. Presto also cited custom decisions where diapers were classified as paper pulp products because it was the paper pulp which gave the diapers their essential character despite their containing materials other than paper pulp.

As such, relying on what the diaper machine produces, Presto argued that heading 8441 specifically describes the machine. Presto stated that heading 8479 is a basket provision and since heading 8441 more accurately describes the machine, there is no reason to resort to the basket provision.

CBP Says Classification of Diapers Shouldn't Control Machine's Classification

CBP, however, contended that the classification of the diapers should not determine the classification of the machine itself. CBP argued the machine is more aptly classified under heading 8479 because no other heading covers it by reference. CBP stated that paper pulp is only part of the diaper composition and, therefore, not controlling of the machine's classification.

CIT Ruled Machine is Under HTS 8441 as Produces Articles "Made Up" of Pulp

The CIT agreed with Presto, stating that there is utility in scrutinizing what kind of articles the machine produces because heading 8441 references use and the industry in which the machine is employed. This provision identifies machinery falling under heading 8441 as machinery "for making up paper pulp, paper or paperboard." The Explanatory Notes (ENs) of heading 8441 also specifically state that the heading covers all machinery used for cutting, and those for the manufacture of various made up articles. Since the machine produces articles made up of paper pulp, it follows that a machine which makes diapers, itself a paper pulp product, is machinery for the "manufacture of various made up articles." As such, under a General Rules of Interpretation 1¹ analysis, the machine is prima facie classifiable under duty-free HTS 8441.80.0000.

The CIT also explained that Chapter 84 Note 7 states that a machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose.

HTS 8441 is also More Specific than HTS 8479 Basket Provision

The CIT also stated that CBP's contention that the machine should be classified under HTS 8479.89.9897 is not persuasive because these provisions are intended as a broad catch-all to encompass the classification of articles for which there is no more specifically applicable subheading. The CIT found HTS 8441.80.0000 more specifically provides for the machine's classification than the basket provision of HTS 8479.89.9897. Additionally, because the CIT found the machine is prima facie classifiable under heading 8441, it cannot be simultaneously classifiable under heading 8479.

¹A classification analysis utilizes the General Rules of Interpretation (GRI) and commences with GRI 1. GRI 1 provides that classification shall be "according to the terms of the headings and any relative section or chapter notes." As such, the CIT states the terms of the headings and any relative section or chapter notes are paramount.

(Slip Op. 11-84, dated 07/18/11)