CIT Rules in Favor of Express Consignment Carrier Regarding Alleged Misclassifications
In U.S. v. UPS Customhouse Brokerage, Inc,the CIT agreed with UPS that the facts presented by Customs were not sufficient to grant summary judgment with respect to penalties imposed concerning alleged misclassifications by UPS.
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UPS, an express consignment carrier and a licensed customs broker, had been identified by Customs as having a record of misclassifying merchandise in HTS 8473.30.90. This classification provides for parts and accessories containing a cathode ray tube(CRT) for use in automatic data processing machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data.
Customs attempted to improve UPS' compliance by providing instructional materials as well as training in classifying this type of merchandise.
Despite these efforts, Customs alleged that UPS continued to misclassify merchandise, thus demonstrating a failure to exercise responsible supervision and control over the customs business that it conducts, thus warranting monetary penalties.
In requesting summary judgment, Customs presented a declaration by a single Customs employee that stated UPS had misclassified merchandise under HTS 8473.30.90 on sixty entries. In addition, Customs proffered a general statement that in determining the classification, Customs would perform a physical inspection of the merchandise, a review of the entry documentation, or both.
UPS argued that Customs did not provide the Court with samples or descriptions of the allegedly misclassified merchandise, or evidence concerning the methods Customs undertook to verify that the specific merchandise in question did not contain a CRT.
The CIT agreed with UPS and ruled that Customs had not provided any specific information to demonstrate the imported merchandise in dispute actually lacked CRTs. Without such information, the correct classification of this merchandise could not be determined, and summary judgment could not be granted. As a result, the case will go to trial.
(Note that the National Customs Brokers and Forwarders Association of America (NCBFAA) was Amicus for this decision.)
CIT Slip Op. 07-104 (dated 07/02/07) available at http://www.cit.uscourts.gov/slip_op/Slip_op07/07-104.pdf