CIT Rules Shipping Container Does Not Need Walls/Doors to be Duty-Free

In Pacific Northwest Equipment, Inc., v. U.S., the Court of International Trade ruled that platform containers are free of duty under Harmonized Tariff Schedule subheading 8609.00.00, as containers specially designed and equipped for carriage by one or more modes of transport, and not under subheading 7326.90.85 as an article of iron or steel at 2.9% ad valorem.

Between March 2005 and February 2006, Pacific Norwest imported what it identified as “platform containers,” which it described as special-purpose shipping containers without “doors, walls, or a roof”, designed for use intermodal transportation, typically by road, rail or ocean transport.

Customs and Border Protection classified the items under heading 7326, and not under 8609, stating that without a measureable internal volume, they were simply platforms. Customs argued that classification under heading 8609 was not appropriate, because the items were not “containers” as the term is ordinarily used.

The CIT stated that the case hinged on the meaning of “container,” and that when a term is not defined in the HTS, its meaning is presumed to be same as its common or dictionary meaning. The court noted that the dictionary definition of the term “container” is simply “one that contains,” and to contain means “to keep within limits, to hold back or hold down.”

The CIT determined that the subject merchandise was used to keep various objects within limits by holding down such objects. Accordingly, the Court found them to be “containers” and in addition, that they were specially designed and equipped for carriage by one or more modes of transport, and thus properly classified under subheading 8609.00.00.

Slip Op. 10-67 (dated 06/15/10)