How Do You Classify a Diaper Machine? Depends.

The question in National Presto Industries v. United States, is whether an adult diaper-making machine is classified in 8441 as other machinery for making up paper pulp, paper, or paperboard or in 8479 as other machinery having an individual function, not specified or included elsewhere in Chapter 84. Typically, one would assume that 8441 will apply because it is more specific than 8479, which is a basket provision. But, that analysis skips past General Rule of Interpretation 1. If the goods fit in 8441, they go there.

Presto, the plaintiff in this case, reasoned that because Customs classifies diapers as articles of paper pulp, the machine that makes a diaper must fall within 8441. Presto backs this up with Customs and Border Protection rulings saying that paper pulp provides the essential character to diapers. In addition, the Explanatory Notes to 8441 broadly state that 8441 covers machinery for producing made up articles of paper pulp.

The government, argues that because paper pulp makes up only a portion of the diaper, 8441 does not fully describe the operation of the machine.

Relying entirely on GRI 1, the Court of International Trade rejected the government's argument. First, it found that the heading specifically requires an inquiry into the type of product produced by the machinery. That is a diaper. Second, diapers are products of paper pulp. Thus, the machine produces articles of paper pulp and, therefore, goes in 8441. Plato could not have said it better.

[Note to self: Best. Headline. Ever.]

Comments

Post a Comment

Popular posts from this blog

Ruling of the Week 2015.8: Old Jersey and Pitcairn Island

Image
For today's ROTW, I set out looking for a ruling dealing with some far off and preferably warm location. Turns out that, with the exception of coastwise transit issues, there are no Customs and Border Protection rulings involving Pitcairn Island or any of several Pacific Ocean microstates including Tuvalu , Niue , and Kiribati . Pitcairn Island What I did find is an interesting question about the country of origin marking for products of the Bailiwick of Jersey Island, Channel Islands. The ruling is HQ 561938 (Mar. 18, 2002). For those of you who may not know, Jersey is an island off the coast of Normandy, France. It is an independent international actor and not part of the U.K. although the U.K. is responsible for its defense and external relations. Also, the Queen is the Head of State in her capacity as "the Crown in Right of Jersey." It is, according to the U.S. Department of State, a " Crown Dependency " along with the Isle of Man and the Bailiwick o...
Read more

CAFC Decision in Double Invoicing Case

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl...
Read more

Ninestar and UFLPA Exhaustion

Image
Exhaustion is a key doctrine in administrative law. When applicable, it requires that a party unhappy with an agency’s determination complete the administrative appeal process before turning to the courts for judicial review. Requiring exhaustion typically promotes judicial efficiency by ensuring that disputes are resolved at the agency and, if they are not, that there is a complete record of the agency process. Exhaustion also ensures that the judiciary respects the executive agencies and their expertise.  There are, on the other hand, times when the courts will find that exhaustion is not necessary or appropriate. Such is the case in  Ninestar Corporation et al. v. United States  et al., a decision of the U.S. Court of International Trade.  Ninestar is also interesting because it is one of the first cases in the CIT involving the Uyghur Forced Labor Prevention Act, known as UFLPA. In my hiatus from active blogging, I missed the rise of UFLPA as a major compliance t...
Read more