CIT Affirms CBP Classification of Decorative Punches; Throws Out Agreement on Some Merchandise

The Court of International Trade affirmed CBP’s customs classification of “Stampin’ Up!” decorative punches, imported by plaintiff Wilton Industries from Taiwan. Wilton wanted the punches classified as cutting machines under Harmonized Tariff Schedule subheading 8441.10.00, which enter duty free, but CIT said CBP was correct in classifying them as “other perforating punches and similar handtools” under subheading 8203.40.60, dutiable at 3.3 percent. Although Wilton and CBP stipulated that 23 of the models of punches were classified as cutting machines, leaving only 16 of the models in contention, CIT said it had to look at all of the subject merchandise and applied its ruling to all 39 models.

The products at issue are “Stampin’ Up!” brand punches that cut shapes or designs out of or in paper and that come in a variety of shapes and sizes. Each of the punches is capable of making a hole of an intended shape or trimming the edge or corner of the paper with a decorative design. The punches are used in scrap booking and craft projects involving the creation or decoration of invitations, cards, and other decorative items. The merchandise was imported in 12 entries into the Port of Los Angeles between July and October 2008.

Arguing for classification under HTS subheading 8441.10.00 (“Other machinery for making up paper pulp, paper or paperboard, including cutting machines of all kinds, and parts thereof: Cutting machines”), Wilton introduced the testimony of a mechanical engineer that said the punches were cutting machines. CIT said the testimony was inappropriate, however, because the punches analyzed by the engineer were not models at issue in this case, and the engineer also said that a punch itself is a simple machine. CIT said the language of heading 8441, when read together, includes not all cutting machines, but only those for use in paper production.

HTS heading 8203, on the other hand, expressly includes perforating punches, CIT said. “Read together, the common meaning for perforating punch is a hand-operated device for cutting or making holes in or through paper or cardboard,” it said. “The Court finds that the subject punches fall squarely under this common definition of perforating punch. Even if the merchandise could be classified under heading 8441, Note 1(k) to Section XVI, under which heading 8441 falls, says that items classifiable under chapter 82 or 83 of the HTS cannot be classified under Section XVI. So CBP correctly classified the punches under subheading 8203.40.60, CIT said.

While the parties had entered a stipulation that only the classification of 16 models of punches should be considered by the court, CIT said that it is bound by precedent set in the court of appeals’ 1984 ruling in Jarvis Clark Co. v. U.S. to consider all of the merchandise, “reluctantly” disregarding the agreed classification for 23 of the subject punches. CIT ruled that all 39 models are correctly classified under 8203.40.60.

(Wilton Industries, Inc. v. United States, CIT Slip Op. 12-125, dated 09/27/12, Judge Carman)

(Attorneys: Maria Celis of Neville Peterson for plaintiff Wilson; Beverley Farrell for defendant U.S. Government)