DOJ Argues for Summary Judgment at CIT in Agricultural Net Wrap Case

Net wraps used to bind agricultural products in round bales can't be classified as agricultural machinery, and are more akin to thread in a sewing machine or paper in a printer, DOJ said in a brief filed May 10 at the Court of International Trade. The motion for summary judgment asks CIT Judge Mark Barnett to rule against a motion for summary judgement filed by importer RKW Klerks (see 2203150049), and find the net wraps are knit fabrics rather than agricultural machine parts (RKW Klerks Inc. v. United States, CIT #20-00001).

The case stems from a single entry RKW Klerks filed at the Port of Charleston in 2018 that liquidated in 2019. CBP liquidated the entry under subheading 6005.39.00, which covers “[w]arp knit fabrics (including those made on galloon knitting machines), other than those of headings 6001 to 6004: Of synthetic fibers: other, printed,” with a duty rate of 10%. CBP denied RKW Klerk's protest later that year.

In its January 2020 complaint to CIT, RKW Klerks sought reliquidation of the merchandise under subheading 8433.90.50, duty free, as “harvesting or threshing machinery, including straw or fodder balers; grass or hay mowers; machines for cleaning, sorting or grading eggs, fruit or other agricutural produce, other than machinery of heading 8437; parts thereof: Parts: Other: Of haying machines and balers” or under 8436.99.00 as “Other agricultural, horticultural, forestry, poultry-keeping or beekeeping machinery, including germination plant fitted with mechanical or thermal equipment; poultry incubators and brooders; parts thereof: Parts: Other.”

The government argues the net wraps are specifically described in subheading 6005.39.00 as a warp knit fabric made of synthetic fibers and therefore should be "precluded from classification as 'parts,'" as proposed by RKW. "The parties do not materially dispute what the imported goods are, how they are manufactured, and how they are primarily used ... the only dispute is the legal interpretation of headings 6005, 8433, and 8436," the brief said. The government argues that the classification of the net wraps under heading 6005 is consistent with prior CBP rulings on similar merchandise. The cross-motion further argues that "[CIT] and [the] Federal Circuit have held that inputs on which a machine operates are not parts of those machines."