CAFC Upholds Classification of Self-Tapping Screws, Setting Limits on 'Use' in 'Eo Nomine' Provisions
The U.S. Court of Appeals for the Federal Circuit on March 20 upheld a lower court ruling finding screws imported by GRK Canada are classifiable as self-tapping screws rather than as wood screws. Despite an earlier ruling finding an article’s use should be considered in “eo nomine” provisions of the tariff schedule that define an object by name (see 1412100060), the Federal Circuit held that the government went too far in elevating the role of use when arguing screws that may be screwed into wood are classifiable as wood screws.
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Judge Jimmie Reyna penned the opinion, joined on the three-judge panel by Judges Sharon Prost and Kara Stoll. Reyna had dissented the first Federal Circuit ruling in the case, finding the court’s instruction to consider the screws’ use would cause confusion among importers by blurring eo nomine provisions of the tariff schedule that are delineated by whether an article meets a definition, and use provisions where an article is classified according to whether its principal use is named in a subheading.
Here, Reyna appeared to set limits on the consideration of use in eo nomine classifications. The government had argued that the screws’ suitability for use in wood, as well as in non-fibrous materials, meant that they were classifiable as wood screws. Self-tapping screws are exclusively designed for use in non-wood applications, such as fastening concrete, marble, or metal to metal, the government had said. Reyna disagreed, finding their use one consideration among others, including definitions of industry standards, when classifying the screws.
CBP originally classified the screws, made of case-hardened steel meeting minimum torsional strength requirements and with the ability to “self-tap” by cutting a thread in non-fibrous (i.e., non-wood) materials, under tariff subheading 7318.12.00 as “other wood screws,” dutiable at 12.5 percent. The Federal Circuit agreed with GRK and earlier rulings from the Court of International Trade that the screws were instead correctly classified under HTS subheading 7318.14.10 as “self-tapping screws,” dutiable at 6.2 percent (see 13011528 and 1607180039).
“Wood screw” is an industry term that means a specific type of screw with certain characteristics, not just a screw suitable for use in wood, CAFC said. “We instructed the Court of International Trade to consider use of the screws in interpreting the HTSUS tariff provisions, but the Government now seeks to elevate use as the sole consideration,” Reyna said in the opinion. “We decline to do so. Adopting the Government’s position would all but abrogate the foundational tenet of tariff classification that eo nomine provisions are distinct from use provisions and do not depend on either principal or actual use of the imported merchandise.”
Even taking into account their uses, the common and commercial meaning of an “other wood screw” in subheading 7318 is “a screw that forms its own thread by compressing surrounding material designed to fasten wood to wood or other fibrous material,” CAFC said. The common and commercial meaning of “self-tapping screw” of subheading 7318.14 is a “specially hardened screw, that meets minimum torsional strength requirements, that can cut away material to form a mating thread in non-fibrous material, and is designed to fasten nonfibrous materials, such as metal, to either fibrous or nonfibrous materials.” CIT correctly found GRK’s screws are classifiable in the latter provision as self-tapping screws, CAFC said.
(GRK Canada v. U.S., CAFC # 2016-2623, dated 03/20/18, Judges Prost, Reyna and Stoll)
(Attorneys: Craig Ziegler of Montgomery McCracken for plaintiff-appellee GRK Canada, Ltd.; Stephen Josey for defendant-appellant U.S. government)