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Modular Storage Unit Components Not Classified as Furniture Parts, Court Says

Monday, January 25, 2016
Sandler, Travis & Rosenberg Trade Report

The U.S. Court of International Trade ruled Jan. 21 in The Container Store v. U.S. that two storage unit components are classifiable as steel mountings, fittings and similar articles suitable for furniture under HTSUS 8302.42.30 (3.9 percent duty). U.S. Customs and Border Protection had originally classified these items as base metal mountings suitable for buildings under HTSUS 8302.41.60 (3.9 percent duty) and the plaintiff argued that they should be classified as parts of furniture under HTSUS 9403.90.80 (duty-free).

The products at issue are top tracks and hanging standards made of steel, two components of a patented system that consumers can assemble in a variety of configurations to create customized modular storage units for homes and offices. Both are elongated rectangular strips of hardware made of epoxy-bonded steel. The hanging standards suspend from the top track and additional components such as drawers, baskets and shelves can then be attached to the standards. However, the court notes, the top tracks and hanging standards do not organize or store anything on their own.

The plaintiff argued that this case is controlled by previous court decisions in which articles that were identical except for being plastic instead of metal were classified as parts of furniture. The plaintiff asserted that CBP is compelled by 19 CFR 152.16(e) to follow controlling judicial precedent, but the CIT said this regulation does not apply because the CBP protest denials being contested predate the previous court decisions. The court further stated that it is not bound by the earlier decisions because there are factual and legal distinctions between them and this case and CIT judges are not bound by the decisions of other CIT judges.

Turning to the classification of the items, the CIT stated that they are classifiable under both headings 8302 and 9403 but that heading 8302 is more specific. Further, the court said, the interplay between the relevant section and chapter notes dictates that if an item fits the definition of a part of general use it stays in heading 8302 even if it is designed for use in a particular furniture system.

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