The Court of International Trade ruled Nov. 1 on the classification of certain luxury watches.
Each of the 35 watch models at issue in this case has three parts made of 18-karat gold – the bezel (also known as the front), middle case, and case back. On the front and back of each watch, the case contains a transparent synthetic sapphire crystal that serves a protective function.
The plaintiff argued that because the principal parts of the watch cases are made of 18-karat gold, the watches are properly classified as having cases of precious metal under HTSUS 9101. While a substantial part of the back of the cases is composed of the crystals, the plaintiff contended that these crystals are not part of the cases because they are functionally and materially the same as the watch glasses on the front of the watches, which are not part of the case.
The CIT determined that the back crystals are watch glasses and that watch glasses covering watch faces are not part of the cases (because otherwise a watch would have to have either no watch glass covering its face, or a watch glass wholly of precious metal (which would make the face unreadable), to be classified in heading 9101). However, the CIT further determined that a watch glass on the back is part of the case because requiring it to be of precious metal “does not impede the essential function of the watch.”
As a result, the CIT agreed with the government that because the watch cases at issue include parts not made of precious metals, the watches are properly classified as other watches under HTSUS 9102.
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