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Appeals Court Upholds Classification of LED-Powered Candles as Electric Lamps

Thursday, August 09, 2018
Sandler, Travis & Rosenberg Trade Report

The U.S. Court of Appeals for the Federal Circuit on Aug. 6 upheld an August 2017 ruling by the Court of International Trade that candle-like goods powered by light-emitting diodes are properly classified as other electric lamps under HTSUS 9405.40.80 (3.9 percent duty). The plaintiff had sought classification as electric luminescent lamps under HTSUS 8543.70.70 (2 percent duty), other electrical machines under HTSUS 8543.70.96 (2.6 percent duty), LEDs under HTSUS 8541.40.20 (duty-free), or other semiconductor devices under HTSUS 8541.50.00 (duty-free).

The articles at issue are principally composed of translucent wax or plastic and are made to resemble styles of ordinary candles, such as votives, pillars, tapers, or tea lights. They provide illumination by means of a light-emitting diode powered by an internal battery. These goods provide decoration as well as illumination and some have holiday themes.

The CAFC states that if one were to read heading 8543 as covering the candles in question, that heading would then cover every electric lamp because all such lamps use electricity to generate light. Additionally, by operation of Note 1(f) such lamps could not be classified under heading 9405, thereby constraining that heading to only non-electric lamps. That reading, as the CIT noted, “would impose a specific, and drastic, limitation on the scope of heading 9405, HTSUS that the article description for that heading does not express or suggest.”

In response to the argument that subheading 8543.70.70 provides specifically for “electric luminescent lamps,” the appeals court asserts that classification under the General Rules of Interpretation must take a “top-down” approach, beginning with the language of the headings and ending with the language of the subheadings. The court therefore agreed with the CIT’s ruling that the subject candles fall within heading 9405, which covers lamps not covered by any other HTSUS heading.

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