CIT Rules Binders with Rigid Paperboard Core are Classified under HTS 4820
In Global Scouring Group, Inc. v. U.S., the Court of International Trade ruled that certain binders made with a rigid paperboard core are properly classified under Harmonized Tariff Schedule 4820.30.001, which covers binders (other than book covers), folders and file covers, a duty free provision.
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The binders differed somewhat in size and shape, but they were all made of a rigid paperboard core (i.e., spine, as well as front and back components), with one or more layers of foam padding, and an outer covering of either vinyl or textile fabric.
The binders, although dedicated to the organization of stationery items (i.e., sheets of paper, calendars, diaries, etc.), were also designed to hold non-paper products such as pens, pencils, plastic page finders, business cards, credit cards, calculators and other small objects.
In this ruling, the CIT overturned the classifications that were used by Customs, which in accordance with its standard practice and past rulings, had used the outer material of the binder to determine the classification. To wit: Vinyl-covered binders were classified under HTS 3926 at a duty rate of 5.3%, and the textile-covered binders were under HTS 6307 at 7%.
The CIT acknowledged classification rulings issued by Customs are presumed to be correct, and the Court may afford deference to such classifications. However, in this case, the CIT declined to give deference based on the two rulings that Customs used for justification, because it found the rulings, themselves, were riddled with erroneous assumptions, inconsistent statements, and seemingly contradictory conclusions.
Instead, the CIT was guided by the decision in Avenues in Leather, a decision by the U.S. Court of Appeals, concerning the classification of goods substantially similar to the subject merchandise, in which the CAFC ruled the merchandise at issue was properly classified based on GRI 1 of the General Rules of interpretation.
In reaching its decision, the CIT initially considered the common definition of the term "binder" in the dictionary, which defined a binder as "a notebook cover with rings or clamps for holding paper." Based on the common meaning of the term "binder" and GRI 1 ("classification shall be determined according to the terms of the headings"), the CIT ruled that these binders are classified under HTS 4820.30.00, which covers Binders (other than book covers), folders, and file covers.
1HTS Chapter 48 covers paper and paperboard, and articles of paper pulp, of paper, or of paperboard.
Slip Op. 09-33 (dated 04/23/09) available at http://www.cit.uscourts.gov/slip_op/Slip_op09/09-33.pdf