CBP Ignoring End Use of Hydraulic Connectors, Reclassification Petitioner Says
The determining factor for classifying hydraulic connectors should be based on the specific use of the connector, Brennan Industries said in comments to CBP on April 11 (here). Brennan's comments were in response to a CBP request for public comment on a reclassification petition filed by the same company (see 1602080030). CBP's reliance on a previous ruling to classify the hydraulic connectors "wholly ignores the end use of the products," said Brennan. CBP regulations allow for domestic manufacturers to challenge CBP decisions on imports of merchandise similar to that sold by the domestic party.
The company's petition for reclassification from HTS heading 7307 to HTS heading 8412 followed a slew of rejected protests after Brennan discovered a competitor's use of heading 8412 for hydraulic connector imports. Brennan's dispute is over CBP's "adopted" rule that that only hydraulic connectors that attach to flexible hose," not rigid pipe or tubes, "will be classified as parts of hydraulic systems" under HTS 8412.90.9005. Instead, all hydraulic connectors should be classified under that subheading, said Brennan. According to the explanatory notes for machinery parts in Chapter 84, "the use determination supersedes and includes both hose and pipe/tube fittings and should be the determining factor," said Brennan. As of April 14, Brennan was the only commenter on the issue.
The agency was mistaken in its classification analysis included in the request for comments that said "the hydraulic systems fittings and adapters in question must fall under 7307 because they can be used to connect pipes, tubes, or hoses and 7307 names pipe and tube fittings as covered items, while 8412 does not," said the company. This "ignores that the [principal] distinction between 7307 and 8412 is not whether the product is a pipe, tube, or hose fitting, but whether the product has general use as a fitting, or is instead a fitting that is specialized as a 'part' of a hydraulic engine or motor system.”
CBP's cited rulings also provide for a faulty classification basis, said Brennan. The rulings mentioned by CBP "place the cart before the horse" by relying "on the unnecessary hose v. pipe/tube distinction," Brennan said. That distinction "only applies when choosing between subheadings within Chapter 73, HTSUS, and which has no bearing on the more important threshold determination: whether a product is a 'specific use' part better classified within Chapter 84, HTSUS," it said.
CBP should "closely examine its prior rulings and submit that the distinction between 'hose' and 'tube or pipe' fitting" doesn't apply "when deciding between headings 8412, and 7307," the company said. "At a minimum," CBP should classify Brennan’s connectors, fittings and adapters that connect to flexible hydraulic hoses under 8412 and "review all other importers of such products to ensure that only their hose fittings are entering the United States under the duty-free 8412," it said.