Importer's Motion for Judgment Should Be Dismissed for Lack of Proof, US Says
In a Swiss watch classification case ongoing since 2018, the U.S. argued May 30 that the motion for judgment filed by the watches’ importer should be dismissed for lack of proof. Alternatively, it asked its own cross-motion for judgment be granted because the importer’s watches with gold alloy cases don’t fit under its preferred heading, as that heading, which covers watches with cases made of precious metals, specifically excludes gold (Ildico Inc. v. U.S., CIT #s 18-00136, -00076).
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Importer Ildico argues that its Richard Mille watches should be classified under Harmonized Tariff Schedule heading 9101 as watches with cases made wholly from precious metals (see 2403130063). CBP, however, liquidated the watches under heading 9102, a basket provision, after determining that the crystals attached to the back of the watches were synthetic. The case has been slowly ticking on, seeing a drawn-out, controversial discovery process only conclude at the end of last year (see 2401120059).
The importer hasn’t provided enough evidence for the record to prove that all its watches have cases made of precious metals, the U.S. argued in its reply. The government sought a sample of each of the 35 watch styles the importer entered, but only received three “highly stylized” samples that weren’t representative of all the others, it said. Ildico also didn’t submit purchase orders, bills of materials or specifications for all of the watches when asked.
However, if the trade court did accept those three samples as adequate evidence, the samples still show that the importer’s watches didn't have precious metal cases and had to be classified under heading 9102, the U.S. said.
Ildico argued in its own motion for judgment, filed March 12, that the “principal parts” of the watch cases are made up of 18 karat gold. Citing several horological authorities, it said that the crystals are “watch crystals” -- which aren’t considered parts of cases by the HTS -- mounted to the case backs.
But, first, the cases are made of gold alloy, which isn't considered a “precious metal” under heading 9101, the U.S. said.
Alloys are mixtures of multiple substances and include nonprecious metals, it said. It said that the context of that particular HTS chapter gold alloy is not “wholly of precious metal.”
It also said that the heading isn’t a principal use provision, but an eo nomine one. Ildico’s interpretation of heading 9101 “is also flawed because it improperly reads out the term ‘cases’ from the statute and replaces it with the term ‘principal parts,’” it said.
The chapter notes also define “cases” to mean “inner and outer cases, containers and housing for movements, together with parts or pieces, such as, but not limited to rings, feet, posts, bases and outer frames, and any auxiliary or incidental features,” the U.S. said. It called that definition “unambiguous and broad,” and said that watch crystals, which are not made of precious metals, are included in it. Therefore, again, the cases are not made “wholly of precious metal,” it said.