CAFC Agrees with Importer on Classification of Laminated Floor Panels
In Faus Group, Inc., v U.S., the Court of Appeals for the Federal Circuit reversed the Court of International Trade, ruling that the proper classification of certain laminated flooring panels is under HTS heading 4418, and more specifically, under subheading 4418.90.40 at 3.2 percent ad valorem.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The laminated flooring panels are made with a core of fiberboard that has a density between 0.85 and 0.95 grams per cubic centimeter and a tongue-and-groove joint on its edge to facilitate assembly with similar flooring panels. The panels are non-structural, finished articles designed to be installed by end users over a structural subfloor.
The issue in this classification case was whether the proper classification is as "fiberboard" under HTS heading 4411 of the HTS as Customs classified the imported goods, and the CIT sustained, or as "builders' joinery" under heading 4418, as argued by the importer.
The CAFC determined that the laminated panels can be classified under both heading 4418 and heading 4411. Accordingly, the CAFC applied General Rule of Interpretation GRI 3(a), to determine the heading that provided the most specific description, which would be therefore the correct heading.
The CAFC stated that in order for a product to be classified under heading 4418, it is necessary that the raw material (fiberboard or other wood-based material) be processed so that there can be a joining of pieces, or so that the products which are created are capable of being joined. In contrast, while fiberboard that has undergone some processing may still come within heading 4411, processing is not a requirement for classification in that heading.
In addition, the CAFC stated that while 4418 may embrace a number of different products, the uses of those products are rather limited, and by contrast, heading 4411 is not limited at all by use.
In summary, the CAFC stated that heading 4411 covers a large variety of unprocessed and processed fiberboard products, whereas heading 4418 covers only processed products (made from fiberboard or other wood-based material) that are used as non-structural elements in the construction of buildings. Because heading 4418 encompasses a narrower range of items and uses, it is the more specific of the two headings.
The CAFC reversed the CIT's decision ruling that the imported flooring panels should be classified within subheading 4418.90.40, the residual category for "builders' joinery," subject to a duty of 3.2 percent ad valorem.
CAFC Faus decision 08-1605 (dated 09/25/09) available athttp://www.cafc.uscourts.gov/opinions/08-1605.pdf
BP Notes
- All tariff numbers are based on the 2001 version of the HTS
- The CAFC also ruled on a "companion" case, Witex, U.S.A. Inc. and Mannington Mills, Inc. v U.S. based on its Faus Group decision, the CAFC similarly reversed the classification decision of the CIT, ruling that the proper classification of certain laminated flooring panels is under heading 4418, and more specifically, under subheading 4418.90.40 at 3.2 percent ad valorem. (See ITT's Online Archives or 09/23/08 news: 08092340, for BP summary of CIT's Witex decision.)
CAFC Witex decision 08-1604 (dated 09/25/09) available at http://www.cafc.uscourts.gov/opinions/08-1604.pdf