The Court of International Trade has reversed a previous decision and found that child safety seats for bicycles are properly classified as seats under HTSUS 9401.80.40 (duty-free) rather than as bicycle accessories under HTSUS 8714.99.80 (10 percent duty).
After CBP issued a ruling to the plaintiff in 2005 classifying the subject goods under heading 8714, the plaintiff submitted multiple protests and post-entry amendments arguing for classification under heading 9401. CBP approved some of these but rejected others. The plaintiff argued that CBP established a treatment of classifying the seats under heading 9401 by approving some of the protests and PEAs and thus violated 19 USC 1625(c) by modifying that treatment without notice and comment.
The CIT found that all three prongs of the regulatory test to establish when a treatment has been previously accorded by CBP to substantially identical transactions were met in this case. First, there was an actual determination by a CBP officer regarding the facts and issues involved in the claimed treatment, and second, that officer was responsible for the subject matter on which the determination was made. The plaintiff had argued that CBP’s approvals of its protests and PEAs were the only actual determinations the agency made on the classification of the subject goods and that no other CBP decisions or actions were taken anywhere in the country regarding those goods, nor were any other interpretive rulings or decisions made with respect to those goods.
Third, the CIT found that there were substantially identical transactions for which there was a claimed treatment on a national basis over a two-year period immediately preceding the claimed treatment. The court said the “national basis” criterion was met even though only CBP’s Newark office made determinations or took actions on the subject goods, stating that while some entries of the subject goods were liquidated in Long Beach through the bypass procedure this does not represent a contrary position or action taken by another CBP port or office.
The CIT also ruled that the claim of treatment occurred over a two-year period immediately preceding the claim, as required by the regulations, stating that “the basis for treatment in this matter arises from CBP’s grant of [the plaintiff’s] protests rather than how the entries were initially classified.” However, the CIT said that only the plaintiff’s entries that were protested after the establishment of that two-year period qualify for relief.
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