CIT Reverses CBP's HTS Classification of 'Gold Leaf Vials' as Goldsmithed Ornaments
In a challenge of CBP’s customs classification of “gold leaf vials” with a gold plated cap imported from China, the Court of International Trade ruled in favor of plaintiff Salem Minerals Inc. CBP had originally classified plaintiff’s “small glass vial filled with clear liquid and a small quantity of gold leaf fragments, topped with a ‘theme’ cap featuring a small figurine, and affixed with a label” under Harmonized Tariff Schedule 2005 subheading 7114.90.00 (“Articles of goldsmiths’…wares...': Of other precious metal whether or not plated or clad with precious metal”), dutiable at 7.9%. CIT ruled that the product was instead properly classified under 7115.90.30 (“Other articles of precious metal…: Other…Other: Of gold, including metal clad with gold”), dutiable at 3.9%.
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Merchandise Was Souvenir Gold Vials; CBP had Denied Plaintiff’s Protest
Plaintiff’s merchandise, imported from China and marketed and sold in the U.S. as a “gold vial” at souvenir shops, consisted of a clear spherical glass vial measuring 2 1/2 to 2 3/4 inches high, filled with 15 milliliters of liquid, containing gold leaf fragments that were procured from a gold leaf manufacturer and not worked or formed during production of the imported merchandise. A “theme” cap had an upper figurine section cast from high-tin alloy and electroplated with 18k gold. Plaintiff filed a protest upon CBP’s classification under subheading 7114.90.00, which was denied, and subsequently challenged the classification before CIT.
CBP Said Vials were Goldsmithed “Ornaments”
In its arguments, CBP referred to Note 10 to Chapter 71 of the 2005 HTS, which said “for the purposes of heading 7114, the expression "articles of goldsmiths' or silversmiths' wares" includes such articles as ornaments, tableware, toilet-ware, smokers' articles and other articles of household, office or religious use,” and Explanatory Note 71.14, which said that “in general, goods covered are larger than articles of jewelry within the purview of heading 71.13 and include (A) articles of tableware, (B) toilet articles...,” etc. CBP said that, as the flakes of gold in the merchandise was of paramount importance to them, such leaf is a semi-manufactured form that has been worked into ornamental souvenirs specifically covered in HTS heading 7114.
Plaintiff Said Article was Simply Random Pieces of Gold Leaf
Plaintiff argued, among other things, that in none of the exemplars of Note 10 to Chapter 71 had gold merely been packaged or contained, but instead all featured gold that had been formed into a useful shape beyond random pieces of gold leaf and electroplated base metal.
CIT Agreed, Said Article was Mere Tchotchke, Not the Work of a Goldsmith
CIT agreed with plaintiff’s argument, and said that “taken as a whole, those ‘gold leaf vials’ do not reach to the level of the work, or the ware, of a goldsmith within the purview of HTS heading 7114. The gold floating within the vials has not been ‘worked’ by a goldsmith beyond its obvious, simple, beaten state…,” and “the finished product results from simple assembly that ends up short of any goldsmithing. It is but a tchotchke, not something like the creative exemplars of Explanatory Note 71.14.”
(Slip-Op. 12-88, dated 06/26/12, Judge Aquilino)