Mini Excavators Are Backhoes, DOJ Argues in Counterweight Classification Case

Counterweights for mini excavators should be subject to Section 301 tariffs because they qualify as parts for "backhoes," the government argued in a Jan. 23 brief at the Court of International Trade. DOJ asked the court to deny plaintiff Norca Engineered Products' Nov. 3 motion for summary judgment and to find that the counterweights are backhoe parts and therefore not subject to a Section 301 exclusion (Norca Engineered Products v. U.S., CIT #21-00305).

The dispute concerns the correct 10-digit statistical classification for counterweights used on construction vehicles. Norca says the counterweights are properly classified under subheading 8431.49.9095, a residual category for parts of certain machinery, while the government asserts the items are properly classified under subheading 8431.49.9044 as parts of backhoes, shovels, clamshells and draglines. Both subheadings are duty-free, but Norca's preferred classification would exclude the counterweights from Section 301 tariffs.

CBP liquidated the entries in December 2019 under subheadings 8431.49.9044 and 9903.88.01, which made the items subject to additional 25% duties under Section 301. Norca protested CBP’s classifications and liquidation and filed another 15 protests over the following year, all of which were denied by January 2021.

In its Nov. 3 motion for summary judgment, Norca argued that because the counterweights are exclusively installed on Doosan Bobcat mini or compact excavators, which fall under heading 8429, the counterweights do not fall under CBP's preferred classification, which is limited to parts for “backhoes, shovels, clamshells and draglines" and does not include "excavators." In addition, Norca says that the common meaning of the term “backhoe” also excludes “excavators" (see 2211030062).

DOJ argued that mini-excavators indeed meet the common definition of "backhoe" and that Norca's preferred classification under U.S. Note 20(q)(90) requires the item be "counterweights for use of excavators and wheel loaders described in statistical reporting number 8431.49.9095." The mini-excavators for which the counterweights are a part "is a type of excavator that is described by the term 'backhoe' under subheading 8429.52.10." Because the mini-excavators are classifiable under subheading 8429.52.10, DOJ argued, "the counterweights at issue undisputedly fall within subheading 8431.49.90 as 'parts' of these machines, and the statistical suffix that provides for “Parts of backhoes.”