Importer Says CBP Changed HTS Classification Post-Liquidation to Deny Tariff Refund

An importer of tubing for perforating guns said June 21 that its refund request was wrongly denied after CBP initially accepted its 2020 request for exclusion from Section 232 tariffs. The denial occurred because CBP claimed that the products’ Harmonized Tariff Schedule classification was wrong, even though the agency had said otherwise on three separate occasions, including at liquidation, it said (G&H Diversified Manufacturing v. U.S., CIT # 22-00130).

Importer G&H Diversified Manufacturing said that CBP confirmed its tubing had been classified correctly on entry when it posted the exclusion request for the tubing in 2020; when it approved their classification in connection with the initial exclusion determination in 2020; and when it posted the products’ liquidation notice in 2021.

G&H had been required to pay Section 232 tariffs because it entered its tubes before its exclusion request was approved, the importer said. It had to file a protest to get its refund because by the time it “could submit new information related to the matching of the Exclusion to the Entry,” the tubes were already being liquidated, it said.

“The notion that CBP can, at a whim, unilaterally change the HTSUS classification of a liquidated entry without reliquidation after having approved the classification on multiple instances creates an untenable situation where importers will be unable to predict the cost of importation in any meaningful way,” it said.

Even if the tariff classification had been incorrect, G&H said, CBP can’t “second-guess itself” in a protest resulting from an accepted exclusion request. It said all parties “are entitled to rely on the determinations by Customs concerning the correct classification” upon entry and liquidation.