Modular Storage System Parts for 'General Use,' Not Parts of Furniture, Says CIT
Parts made for the Container Store’s "elfa" modular storage furniture system are classifiable as parts of general use, not parts of furniture, said the Court of International Trade in a decision issued Jan. 21 (here). Faulting the Container Store’s argument that the parts are designed for the elfa system, and not for “general use,” CIT said parts of furniture may only be classified alongside furniture in chapter 94 if the parts are not classifiable in a lower number heading (i.e., in chapters 1 through 93) of the tariff schedule.
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The Container Store had imported the steel elfa top tracks and hanging standards, which work together to mount the elfa system to a door or wall and hang elfa components like drawers, baskets and shelves, in 2007 and 2008. CBP originally classified them under different subheading in chapter 83, but in litigation the government argued the top tracks and hanging standards should be classified under subheading 8302.42.30, “base metal mountings, fittings and similar articles suitable for furniture … : Other, suitable for furniture: Of iron or steel, of aluminum or of zinc,” dutiable at 3.9%.
The Container Store countered that the top tracks and hanging standards were instead classifiable under the duty free subheading 9403.90.80, “Other furniture and parts thereof: Parts: Other.” It pointed to two court decisions from 2011: one from the Federal Circuit finding plastic parts for another company’s similar system are classifiable in heading 9403, and another from CIT finding plastic elfa top tracks and hanging standards classifiable in subheading 9403.90.80. The company argued CIT and CBP are bound by the earlier decisions.
The court held it is bound by neither of the previous court decisions because both were related to plastic parts with different competing HTS provisions, not the iron and steel parts at issue in this case. It also noted CIT is never bound by any of its own prior decisions. CBP was not bound either, even if the decisions were relevant, because the protests of the entries in this case were decided before the two court decisions in 2011, said CIT.
Turning to the classification of the merchandise itself, CIT found it classifiable under subheading 8302.42.30, as argued by the government. The elfa top tracks and hanging standards are made of a base metal, are mountings and fittings, and are suitable for furniture. But the elfa top tracks and hanging standards also fit within the description of the subheading 9403.90.80 for furniture parts, given the Federal Circuit’s holding in the 2011 case that a similar storage system is “furniture” for classification purposes.
However, note 1(d) to chapter 94 excludes parts of general use from classification in that chapter. Note 2(c) to section XV explains that “parts of general use” includes articles of heading 8302, where the iron and steel elfa top tracks and hanging standards at issue in this case may be classified. “Chapter 94 covers articles that are designed to be placed on the floor, and certain other articles, such as unit furniture, that are designed to be hung on the wall. Chapter 94, however, does not cover parts, as defined in Note 2 to Section XV (i.e., parts of general use),” said CIT. The court found support for its conclusion in additional U.S. rule of interpretation 1(c), which says “a provision for ‘parts’ or ‘parts and accessories’ shall not prevail over a specific provision for such part or accessory.”
Classification as parts of general use applies even for the top racks and hanging standards designed specifically for the elfa system, said CIT. The explanatory note to section XV says “parts of general use are to be classified in their appropriate eo nomine provision,” said CIT, even “if the parts are ‘specialized’ for particular types of goods, such as springs for motor cars or bolts for central heating radiators.” The explanatory note to chapter 94, on the other hand, says disassembled furniture can only be classified as articles of furniture if the “parts are presented together,” said CIT. “Heading 9403, HTSUS, covers parts of furniture but specifically excludes parts of general use, and also excludes disassembled parts that are not presented together.”
(The Container Store v. U.S., Slip Op. 16-6, CIT # 09-00327, dated 01/21/15, Judge Barnett)
(Attorneys: Robert Silverman of Grunfeld Desiderio for plaintiff the Container Store; Marcella Powell for defendant U.S. government)