Importer Argues that CAFC Should Overturn CBP's Method for Weighing Tobacco Wraps

Tobacco wraps importer New Image Global argued at the U.S. Court of Appeals for the Federal Circuit that the Court of International Trade should not have allowed the results of a flawed customs test into evidence. The importer is fighting for a lower excise tax on its tobacco wraps, which were classified by the government as roll-your-own tobacco, subjecting them to the excise tax. The wraps are made with ethanol, which "gasses off" when the package is opened and the wrap is exposed to air. New Image has argued that this process will shed between 10% and 13% of the wraps' weight by the time they reach the final consumer and notes that "any lab test that finds that sealed wraps gain weight in storage and transit from the Mexican factory to the United States is inherently unreliable" (New Image Global v. United States, Fed. Cir. #19-2444).

In a reply brief filed Feb. 17, New Image argued "the CIT committed reversible error" when it ruled that a lab test was "reliable and valid" even though "the methodology ignored a Customs regulation." The brief is in response to the Jan. 27 motion by the Department of Justice arguing that the Federal Circuit should uphold the earlier CIT decision that CBP's "indirect method" for weighing importer New Image's tobacco wraps that included the weight of additives was legally and scientifically valid (see 2201280052).

New Image cites a 1978 legislative rule covering allowances when assessing duties on items "diminished or reduced by natural forces, such as evaporation or by leakage." That regulation, 19 C.F.R. § 158.71, makes relief a requirement when assessing duties and taxes on products that undergo evaporation, the brief argues. It goes on to say that throughout the case, the Government has repeatedly failed to recognize the significance of the regulation and its specific mandate "that allowances shall be made for evaporation when weighing this product."