Net Wraps Are Parts of Harvesting Machinery, Importer Argues in Federal Circuit Appeal
Net wraps used for bailing hay are properly classified as warp knit fabric under Harmonized Tariff Schedule subheading 6005.39.00, the DOJ argued in an April 10 opening brief filed at the U.S. Court of Appeals for the Federal Circuit. RKW Klerks appealed the Court of International Trade's Oct. 4 decision that held that the net wraps are warp knit fabric rather than RKW's preferred classification as "parts of agricultural machines" under HTS subheading 8433.90.50 (see 2210050032) (RKW Klerks v. U.S., Fed. Cir. # 23-1210).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The two types of net wraps at issue, “Top Net” and “Rondotex,” are made of synthetic fiber warp knit fabrics, the DOJ said. Neither party disagrees that the plain meaning of 6005.39.00 describes the merchandise, it said. But RKW argued that the merchandise also qualifies as “parts” of harvesting or threshing machinery, and that the "parts" provision should prevail between the two possible classifications, it said.
The Federal Circuit should affirm CIT's decision because "the trial court committed no legal error in interpreting the tariff term 'parts,' as that term is defined by dictionaries and the legal standards set by this Court," the DOJ said. CIT correctly determined that the netwraps were not "parts" because they are not integral to the functioning of round balers, the DOJ argued. "The trial court’s consideration of these factors is supported by the dictionary and the legal standards set by this, and other, Courts," it said.
The net wrap at issue is dedicated solely for use with hay baling machines to wrap bales of hay, which meets CAFC's legal standard for a part, RKW argued in its Feb. 2 opening brief (see 2302030041). CIT erred by requiring the net wraps to meet the "integral to the function" test as well, RKW said.
"RKW’s challenge is largely premised on its position that Bauerhin established a disjunctive, rather than conjunctive, test for what constitutes a 'part,'” the DOJ said. Contrary to RKW's position, "the Court did not analyze the merchandise according to the test articulated in Pompeo and stop there," the DOJ said. "Rather, Bauerhin discussed both of the tests articulated in Pompeo or Willoughby Camera as the parties disputed which test was applicable." Subsequent CAFC opinions have continued to use both tests when considering whether a good is a part, it said.
Even if the Court rules that the net wraps are parts, heading 6005 should prevail because the net wraps are more specifically described there, the DOJ said. CIT correctly found that the function of the net wraps is to maintain the shape of the bale after it leaves the baler, which is a distinct function from that of the bailing machines, "which is to compress crops into bales," the DOJ said.
Additional Rule of Interpretation 1(c) says that a provision for "parts" shall not prevail over a specific provision, as is the case here, the DOJ said. RKW incorrectly asserted that heading 6005 is a basket provision. If that were true, 6005 would have a lower classification priority than a parts provision, but that is not the case. "Heading 6005 provides for a very specific type of fabrics," DOJ said.