CIT Dismisses Challenge to CBP Classification of Vases; Principal Use Decorative, not Packaging
The Court of International Trade dismissed Dependable Packaging Solutions’ classification challenge, ruling that CBP correctly classified the company’s vases in the Harmonized Tariff Schedule as decorative glassware. Dependable argued that because it sold its vases to mass-market flower packing houses, where they were filled and sold to retailers for final sale as a unit, they should have been classified as glass containers for packaging. Noting that the relevant tariff headings referred to principal use, the court disagreed because it found no difference between Dependable’s vases and others sold directly to consumers for decorative use.
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Dependable imported two types of vases from China in May 2010. Each had “an inexpensive look and visible seams,” and a quarter-inch lip not designed for any sort of closure. At the time they were imported, the small vases were valued at no more than $0.30, and the large vases at more than $0.30 but no greater than $3. Dependable’s vases are not sold empty for retail, but instead to flower packing houses, which fill them with flowers, water, and sometimes nutrients. The units are then sold to retailers.
At liquidation, CBP classified the vases in subheadings 7013.99.40 and 7013.99.50, (“Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018: Other: Valued not over $0.30 each / Valued over $0.30 but not over $3 each”), dutiable at 38 percent and 30 percent respectively. After protesting, filing for accelerated disposition, and having its protests deemed denied, Dependable filed suit at CIT, arguing its vases should have been classified in HTS subheading 7010.90.30 (“ …other containers, of glass, of a kind used for the conveyance or packing of goods …: Other”), dutiable at 5.2 percent.
CIT said both proposed headings, 7013 and 7010, are principal use provisions, noting the phrase “of a kind” in each heading. To determine whether similar vases are principally used for packaging or decoration, the court turned to the seven “Carborundum factors”: (1) general physical characteristics; (2) expectations of ultimate purchasers; (3) channels of trade; (4) the environment of sale; (5) use in the same manner which defines the class; (6) economic practicality of the specified use; and (7) recognition in the trade of the specified use.
While the court found some factors could have gone either way, most of the factors pointed to principal use of Dependable’s vases as decorative. CIT said: (1) the vases were physically the same as decorative vases for retail sale; (2) retail purchasers paid extra for the vase, meaning it was used for decoration; (4) the vases were displayed packed with flowers, encouraging purchase for their combined decorative value; (5) the ultimate use of the vases was decorative; and (6) sale as decorative vases to consumers was feasible.
Because both proposed headings were principal use provisions, but the vases fit principal uses of goods classified in heading 7013, the court ruled that CBP correctly classified the vases as decorative glassware, and dismissed the case.
(Dependable Packaging Solutions, Inc. v. United States, Slip Op. 13-23, dated 02/20/13, Judge Eaton)
(Attorneys: Peter Herrick for plaintiff Dependable Packaging Solutions, Inc.; Stuart Delery for defendant U.S. government)