CIT Rules Trial is Needed to Resolve CBP/UPS Issue Regarding Alleged Misclassification
In U.S. v. UPS Customhouse Brokerage, Inc.,the Court of International Trade agreed with UPS that the facts presented by Customs were not sufficient to grant summary judgment with respect to penalties imposed concerning certain alleged tariff misclassifications by UPS. As a result, the case must go to trial.
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UPS, an express consignment carrier and a licensed customs broker, had been identified by Customs as having a record of misclassifying merchandise in HTS 8473.30.90. This classification provides for parts and accessories containing a cathode ray tube(CRT) for use in automatic data processing (ADP) machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data.
According to Customs, it provided instructional materials as well as training in classifying this type of merchandise to UPS. Despite these efforts, Customs alleged that UPS continued to misclassify merchandise, thus demonstrating "a failure to exercise responsible supervision and control over Customs [sic] business that it conducts, thus warranting monetary penalties."
UPS contended that Customs provided vague and unsupported evidence as to the absence of a CRT in the merchandise classified by UPS in HTS 8473.30.90. UPS further argued that it had not had an opportunity to examine and challenge allegations contained in the statement, which had not been presented by Customs until after the close of discovery. In summary, UPS argued that Customs had failed to establish that any misclassification had occurred.
The CIT ruled that Customs had not provided any specific information to demonstrate the imported merchandise in dispute lacked CRTs. Without such information, the correct classification of this merchandise could not be determined, and summary judgment could not be granted.
CIT Slip Op. 07-104 (dated 07/02/07) available at http://www.cit.uscourts.gov/slip_op/Slip_op07/07-104.pdf