Federal Circuit - HTSUS classification of paper punches; trade court decision is affirmed 

November 5:  The U.S. Court of Appeals for the Federal Circuit today affirmed the trade court’s grant of summary judgment classifying decorative paper punches from Taiwan as “perforating punches and similar handtools” under subheading 8203.40.60 of the Harmonized Tariff Schedule of the United States (HTSUS). Wilton Industies, Inc. v. United States, 2013-1028 (Fed. Cir. November 5, 2013)

Read the Federal Circuit’s decision [PDF 100 KB]

Summary

The imported goods are punches used to cut shapes and designs from paper, for hobby projects.


The importer claimed that the appropriate classification was under subheading 8441.10.00 HTSUS which provides duty-free treatment for “cutting machines of all kinds.”


U.S. Customs and Border Protection (CBP), however, liquidated the punches under subheading 8203.40.60 which has a duty rate of 3.3%.


Before the U.S. Court of International Trade, the parties entered into a stipulation agreement to classify 23 of the 39 models at issue under subheading 8441.10.00 because they were too large to use in the hand. CBP, however, maintained that subheading 8203.40.60 was the proper classification for the remaining 16 models because they were “intended for use when held in the hand.”


Both parties moved for summary judgment, with the trade court granting the government’s cross-motion for summary judgment. The trade court analyzed each party’s proposed tariff headings pursuant to Rule 1 of the General Rules of Interpretation (GRIs) by reviewing the terms of the headings and the legal notes and by consulting dictionaries to determine the common meaning of the relevant terms.


Today, the Federal Circuit affirmed that the proper classification was under subheading 8203.40 HTSUS.



For more information, contact a professional with KPMG’s Trade & Customs practice:


Douglas Zuvich

(312) 665-1022


Andrew Siciliano

(631) 425-6057


John L. McLoughlin

(267) 256-2614


Todd R. Smith

(949) 885-5617


Luis A. Abad

(212) 954-3094


Amie Ahanchian

(202) 533-3247


Or your local KPMG Trade & Customs professional.




©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

TaxNewsFlash-Trade & Customs by year