GRK Canada Prevails in Challenge to CBP Classification of its Screws
The Court of International Trade ruled in favor of plaintiff GRK Canada in its challenge of CBP’s Harmonized Tariff Schedule Classification of its screws, arriving at General Rule of Interpretation 3(c) to do so. CBP had classified GRK’s screws under HTS subheading 7318.12.00 as “other wood screws,” dutiable at 12.5 percent. GRK protested, arguing its screws were instead correctly classified under HTS subheading 7318.14.10 as “self-tapping screws,” dutiable at 6.2 percent. CIT said the screws fit into both categories, and neither subheading more specifically describes the goods. So the tie went to the heading occurring last in numerical order per GRI 3(c), and GRK’s proposed “self-tapping screws” classification prevailed.
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GRK imported and entered its screws in 2008. The screws are made of corrosion resistant case-hardened steel, and have sharp-threaded gimlet points, coarse pitch spaced threads, and a partially unthreaded shank. The screws meet certain torsional strength requirements, and are capable of cutting their own mating threads without a separate tapping operation. They can be used in wood, particle board, plastic, sheet metal, cement fiber board, and wood decking.
Although CBP argued that “other wood screws” describes the products because one of their intended uses was in wood, while “self-tapping screws” are meant for use in metal, concrete, and masonry, CIT said the use of the screws is irrelevant. Both subheadings are eo nomine provisions that directly describe covered products, not the products’ intended uses. Turning to dictionaries and industrial standards, CIT defined the characteristics of wood screws as having: a flat, recessed, oval, round, or slotted head; partially unthreaded shank; coarse pitched spaced threads; and a sharp gimlet point. The court defined self-tapping screws as: made of case hardened steel; have passed certain performance requirements; and do not require a separate tapping operation. Both definitions include improved forms, CIT said.
Turning to classification, the court found that the screws satisfied all the characteristics of both wood screws and self-tapping screws. “If the court focuses exclusively on the key characteristics that define wood and self-tapping screws, it is difficult to select one tariff provision over another for GRK’s screws,” CIT said. Classification was therefore possible under either subheading through GRI 1. Because the screws aren’t unfinished or incomplete goods, CIT couldn’t use GRI 2, either. Moving to GRI 3, the court said both subheadings did an equally good job of describing the items, rendering classification based on relative specificity impossible under GRI 3(a), and GRI 3(b) didn’t apply because the screws are not mixtures or mixtures, composites, or sets. Finally, the court was forced to turn to GRI 3(c), which says goods that cannot be classified under 3(a) and 3(b) should be classified under the heading which occurs last in numerical order. Because the subheading for self-tapping screws, 7318.14.00, comes after the subheading for other wood screws, 7318.12.00, classification as self-tapping screws was correct, CIT said.
“Although GRI(c) is to be rarely used, … here analysis under that rule is appropriate,” said CIT. “This is a logical outcome if one considers that the addition to the HTSUS of self-tapping screws generally reflects advances in design and technology within this universe of fastener.”
(GRK Canada, Ltd. v. United States, Slip Op. 13-07, dated 01/14/12, Judge Barzilay)
(Attorneys: Craig Ziegler of Montgomery McCracken for plaintiff GRK Canada; Stuart Delery for defendant U.S. government.)