Importer Files CIT Complaint on Classification of Automated Shade Machines
Automated shade machines are neither "curtains" nor " builders' wares" but are complex machines classifiable in the tariff schedule as appliances with individual functions, importer Lutron said in a Sept. 14 complaint to the Court of International Trade (Lutron Electronics v. U.S., CIT #22-00264).
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The case challenges CBP's liquidation of a single entry where liquidated and assessed duties on the imported shade machines as "curtains" under Harmonized Tariff Schedule subheading 6303.92.2030, dutiable at 11.3%, and as "builders' ware of plastics ..." under subheading 3925.30.1000, dutiable at 3.3%. CBP assessed 7.5% Section 301 duties on both classifications. Lutron filed a protest, which was denied on Sept. 9.
Lutron then brought suit at CIT, where it said the shade machines "exceed the scope of both provisions," and argued that proper classification is under subheading 8479.89.95 as “machines and mechanical appliances having individual functions, not specified, or included elsewhere in this chapter: … [o]ther machines and mechanical appliances: … other: … other," dutiable at 2.5%. Lutron also said that the shade machines are not subject to Section 301 duties as they are of Mexican origin.
Lutron said its machines are composed of multiple parts and designed to interface with various other devices and operate as part of a complete system that can intelligently and autonomously moderate various light sources. Lutron noted the shade machines are certified by Underwriters Laboratory to comply with the ANSI/UL Safety Standard that applies to motorized gates, windows, and other opening and closing appliances as evidence that the machines have functions beyond CBP's classification. The machines also comply with the National Electric Code, which is the benchmark for safe electrical design, installation and inspection to protect people from electrical hazards.
In its arguments, Lutron pointed to two CBP New York Rulings from 2007. In NY N010048, CBP said that controllable shading and drapery track systems were properly classified under subheading 8479.89.9897. Lutron said the drapery track systems are "substantially identical" to the shade machines at issue. In NY N013565, CBP said that the quiet electronic drive units (QEDs) were also correctly classified under subheading 8479.90.9496, which Lutron said are parts of the completed shade machines.
In January, CBP published Customs Ruling HQ H312768, which modified N010048 and said that the shade machines were composites and that the shade component provided the essential character of the machines. Lutron said that HQ H312768 cites "no change in law or precedential court decision" and does not modify NY N013565. Therefore, Lutron argued, the electronic drive unit, when imported separately, should still be classified under 8479.89.9897.
The plain language of heading 8479 "includes all machines and mechanical appliances of whatever material and is only limited by individual functions," Lutron argued. Because the machines have individual functions not specified elsewhere in Chapter 84, they are correctly classified under 8479.89.9897. Likewise, the machines are not classifiable in their entirety under either the 3925 or 6303 headings. The tariff heading language “builders’ ware of plastic” for heading 6303 does "not describe the shade machines in any meaningful way," Lutron argued. The machines contain features "substantially in excess" of those described as "blinds" under the 3925 headings, Lutron said. Finally, Lutron argued that the textile rules of origin were applied to the machines as a whole and so the machines were inappropriately deemed to be of Chinese origin, when they are instead products of Mexico.