CIT Sides With Government in 'Backhoe' Parts Dispute

The government correctly classified counterweights for mini-excavators as "backhoe" parts, rendering them ineligible for a Section 301 tariff exclusion, CIT Judge Jane Restani ruled in a July 21 opinion.

The case centered around what constitutes a "backhoe" has been at the center of the case since it began in November. Norca Engineered Products has argued that the Doosan Bobcat mini-excavators, for which Norca exclusively imports its counterweights, are commercially understood to be "excavators" rather than "backhoes," meaning that parts for them are correctly classified under Harmonized Tariff Schedule subheading 8431.49.9095, a residual category for parts of certain machinery. Norca pointed to various marketing materials from machine manufacturers and rental companies as evidence that "mini excavators" and "backhoes" are commercially distinct (see 2303310003).

In contrast, the government's position has been that the mini-excavators are "backhoes," whose parts are classified under 10-digit HTS subheading 8431.49.9044. Both subheadings are duty-free, but Norca's preferred classification would exclude the counterweights from Section 301 tariffs by adding 9903.88.14 as a secondary subheading. DOJ argued the common understanding should prevail and offered dictionary definitions (see 2303310003).

Restani noted that "HTSUS terms are construed according to their common and commercial meanings which are presumed to be the same absent contrary legislative intent.” A commercial meaning can prevail over a common meaning only if it is consistent with the HTSUS, Restani said.

"The machine at issue has an articulated arm that digs towards the vehicle, which is the dictionary definition of a backhoe," the court said. "For HTSUS purposes, a backhoe does not have the narrow definition that Norca contends."

Restani said CIT cannot accept a commercial meaning that is at odds with the HTSUS itself. Even if Norca’s argument about the commercial understanding is correct, "Norca cannot overcome legislative intent."

Both parties agreed that the counterweights weighing between 400kg and 600kg were eligible for an exclusion regardless of their classification.

(Norca Engineered Products v. U.S., Slip Op. 23-108, CIT # 21-00305, dated 7/21/23; Judge: Jane Restan; Attorneys: Christopher Clark of Squire Patton for plaintiff Norca Engineered Products; Edward Kenny for defendant U.S. government)