September 10, 2004
On August 25, 2004, the Court of Appeals for the Federal Circuit (CAFC) upheld the Court of International Trade's previous decision in Intercont'l Marble Corp. v. United States, and affirmed the long-standing principal of classification that merchandise is classified according to its common meaning. The decision placed limestone slabs, capable of taking a polish, under the provisions of 6802.91.05, HTSUS
The case originated when, in 2001, Customs reversed its position taken under the previous tariff (TSUS), that limestone is classifiable under tariff provisions describing "marble" by a statement included in its Informed Compliance Publication What Every Member of the Trade Community Should Know About: Classification of Marble (U.S. Customs, Sept. 2001).
"Marble" had not been specifically described by the tariff or in legislative history. Such undefined provisions are to be classified by their common meaning, which is presumed to be the same as its commercial meaning. To ascertain the common meaning of a term, a court may consult "dictionaries, scientific authorities, and other reliable information sources" and "lexicographic and other materials".
Decision by the Court of International Trade (CIT)
Because such limestone slabs are commonly known as "marble" in dictionary definitions and in the trade, the CIT ruled that the classification of certain limestone, capable of taking a polish, was properly made under the tariff provision for marble. 264 F. Supp. 2d 1306 (Ct. Int'l Trade 2003).
Appeal to the Court of Appeals for the Federal Circuit (CAFC)
On appeal, the government appealed the decision because it continued to assert that under a geological definition, such granular limestone lacked the higher crystallinity content required of true marble stone.
The government also argued that this former interpretation had been incorrect and that the legislative changes in enacting the modern Harmonized Tariff System (HTS) amounted to a legislative reversal of that position.
However, the CAFC properly pointed out that the government was merely "[a]ttempting to undermine the sensibility of the commercial definition". The CAFC reiterated the CIT's holding that, as described by the Oxford dictionary, "marble" is limestone capable of taking a polish but may be crystalline or granular.
The court also noted the principal that an interpretation of the tariff in a way that would markedly increase the duty on an article, although there was no prior indication that the rate was intended to undergo a major increase, is to be viewed with caution by the courts. 130 F.3d at 1484. Adopting Customs' interpretation would nearly double the tariff on merchandise excluded from the marble subheading (from 2.6 percent to 5.1 percent under the HTSUS). Thus, the CAFC stated "Had Congress intended to effect such a significant change in duty, we would expect a more pronounced expression of its intent to appear in the HTSUS." Indeed, the CAFC found no indicia in the legislative history or from a reading of the tariff provisions that Congress intended to effect a change in the implementation of the tariff provisions.
If you have any questions on any of the issues raised in this newsletter, please contact George R. Tuttle, III at (415) 288-0428 or via email at firstname.lastname@example.org.
George R. Tuttle, III is an attorney with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.
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