October 2, 2006
In Michael Simon Design Inc., v. United States, Slip Op. 2006-128, dated August 24, 2006, an importer challenged the classification by Customs and Border Protection (“Customs”) of several different styles of wearing apparel under Headings 6110 and 6206 of the Harmonized Tariff Schedule, contending instead that the articles were properly classified under Heading 9505 as festive articles. For the reasons discussed below, the court granted judgment in favor of the importer for most of the items reviewed.
In the case, Michael Simon Inc., claimed that all of the apparel should be classified as “festive articles” under HTS Heading 9505, arguing that Customs' application of the amended Explanatory Note 95.05 to exclude “utilitarian” articles containing festive motifs from classification under Heading 9505 contravenes existing case law that explicitly includes such articles within the scope of “festive articles”. Customs, on the other hand, argued that Heading 9505 was never meant to encompass the type of apparel at issue, as illustrated by the amended language to EN 95.05. Alternatively, Customs claimed that even if Heading 9505 does encompass apparel, six of the garments fail to satisfy the test for “festive articles” under Park B. Smith, Ltd. v. United States.
The court, in Michael Simon Design Inc., reviewed the Federal Circuit Court's decision in Park B. Smith, Ltd. v. United States on the scope and meaning of Heading 9505, and applied the two-prong test for determining whether the particular article falls into the heading for “festive articles”. In Park B. Smith the court said: “[C]lassification as a 'festive article' under Chapter 95 requires that the article satisfy two criteria:
- it must be closely associated with a festive occasion and
- the article [be] used or displayed principally during that festive occasion.”
The court went on to explain that to qualify as “festive articles,” the item must be “closely associated with a festive occasion” to the degree that “the physical appearance of an article is so intrinsically linked to a festive occasion that its use during other time periods would be aberrant”.
The court then rejected Customs' argument that amended Explanatory Note to heading 95.05 trumps the Federal Circuit Court's interpretation in Park B. Smith of the scope of Heading 9505. The CIT said: “while the term ‘festive articles' may be ambiguous in some respects, it is not ambiguous with respect to encompassing utilitarian articles”. “ Park B. Smith and Midwest held, without qualification, that the term ‘festive articles' includes utilitarian articles:
Application of the amended EN 95.05 would categorically exclude items which have a “utilitarian function” from heading 9505, thereby precluding items such as earrings, table linens, mugs, and rugs from falling under that heading even though the Federal Circuit has ruled to the contrary. See Park B. Smith, 347 F.3d at 927-28; Midwest, 122 F.3d at 1429. Meanwhile, the Federal Circuit's current interpretation of the meaning of the term “festive articles” controls. . . . “This Court must apply the binding precedent of the Court of Appeals for the Federal Circuit.”
After examining the images of the apparel at issue, the court concluded that the garments identified as: Oh Xmas Tree, Silent Night Cardigan, Silent Night Shell, Angel, Halloween Party Sweater, Girl's Trick or Treat Cardigan, Black Widow Spider, Elvira, and CASPER are classified as festive articles under subheading 9505.90, HTSUS; whereas, the two garments depicting black cats remain classified under Headings 6110 and 6206, noting that while black cats may be Halloween motifs, the particular images did not satisfy the first part of the Midwest test -- i.e. , they were not “closely associated with a festive occasion” – because they are not so intrinsically linked to Halloween that wearing those items at other times of the year would evoke thoughts of Halloween or seem aberrant.
Advice For Importers And Brokers
The Court's decision in Michael Simon Design Inc. v. United States, clearly rejects Customs' position that “ utilitarian” articles containing festive motifs are excluded from Heading 9505, at least for the time being. And, while it is expected that Customs will appeal this decision, importers and brokers should take advantage of the decision as the holiday season approaches and imports of festive articles increase; and file protests on articles with festive motifs that were excluded from Heading 9505 because they also have up to six months from the date of liquidation (liquidation typically occurs within 314 days of the date of entry summary filing), to file a protest or to contest the classification used at the time of entry.
Any protest filed should describe the article's Festive Motif in detail and include appropriate references to the court's recent decision in Michael Simon Design Inc. v. United States, Slip Op. 2006-128, dated August 24, 2006.
Please feel free to contact us at (415) 986-8780 or via email, if you would like any further information regarding the decision in Michael Simon Design Inc, v. United States, Slip Op. 2006-128, and its application to products you are importing.
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.
Copyright © 2006 by Tuttle Law Offices.
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