CBP Not Limited to Visual Inspections for Classifications, Agency Says
There's nothing that limits CBP to only a visual inspection of cargo for classification purposes, the agency said in an April 24 ruling (here), HQ H241622. Despite the claims of Gunther Mele, the importer that filed for a further review of protest, CBP is not bound by the limits of a visual inspection and may use laboratory testing as it sees fit, the agency said. The agency also found that a rate advancement notice from the port is not the same as a interpretive ruling.
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Gunther Mele made 109 entries of empty jewelry boxes in 2010 that were classified under 4202.99.10, which provides for containers or cases, wholly or mainly covered in paper, of plastics. CBP at the Port of Buffalo disagreed with that classification and subsequently liquidated the entries under 4202.92.90, which provides for containers and cases, wholly or mainly covered with paper, with an outer surface of plastic sheeting, other. CBP then sent the company a number of Form 29s, informing the company that a lab results showed the boxes were covered with plastic, not paper.
CBP came to that classification decision improperly, the company said. "Gunther Mele argued in its meeting with this office, as well as in its follow up communications with this office, that the determination of the 'outer surface' should be limited to that which is 'visible and tactile' to the naked eye without resort to laboratory testing." That's not true, CBP told the company. "There's no "logical reading" of past "HQ rulings, nor any court case, that limits CBP to only a visual inspection to determine the tariff classification of goods entering the United States," the agency said. "CBP has statutory authority to inspect all merchandise entering the United States, and this includes at its discretion, laboratory testing."
The company also complained that CBP didn't comply with requirements for notice and comments procedures before a classification treatment is revoked. CBP's Form 29 to Gunther Mele "reclassifying its goods was issued in contravention" the statute and regulations, the company said. But the notice "here was simply a statement by the Port that it intended to rate advance the imported merchandise on the basis of the Customs laboratory report," CBP said. "It is quite different than the interpretive rulings and decisions."
The company was also mistaken in its assertion that CBP changed course from "previous treatment," the agency said. To prove a treatment claim, the importer must "put forth a detailed list of transactions involving materially identical facts and issues," said CBP. Gunther Mele argued "that it received an 'actual determination' on the classification of the subject merchandise" by CBP, as evidenced by Import Specialist comments included in the company's CBP Importer Trade Activity report. But the company relied on "the words 'No Change' inserted into the 'Liquidation Type' column as evidence that its imports were found by an import specialist to be compliant, and further, that this amounts to an official act by CBP upon which Gunther Mele’s treatment claim rests," said CBP. That reliance is mistaken, as the Court of International Trade previously found that similar ITRAC information doesn't provide "any particular significance" relative to a classification.