Jewelry Boxes With Coating Have 'Plastic Sheeting' Exterior for Classification Purposes, CIT Says

Jewelry boxes imported by The Kalencom Corporation have an “outer surface of sheeting of plastics,” and carry a higher duty rate than paper jewelry boxes, the Court of International Trade said in a May 18 decision. Though the boxes are made of paper, the plastic films applied to that paper form the outer surface, and constitute “sheeting” despite their thinness, CIT said, over Kalencom’s objections.

Kalencom had imported the jewelry boxes in 2013. Each of the 16 styles it imported were coated in one of three types of coverings -- Skivertex, MetalX or Pellaq -- which provide durability as well as an appealing visual effect. The coatings are also used on books, menus and photo albums. The coatings are applied through a three-step process, each of which involves the use of acrylic-based products, some mixed with additives like defoamers and surfactants.

CBP had liquidated the entries under subheading 4202.92.90 as jewelry boxes with an outer surface of sheeting of plastics, dutiable at 17.6%. Kalencom protested, arguing they should have been classified in subheading 4202.99.10 as jewelry boxes “wholly or mainly covered with paper,” which carries a 3.4% duty rate.

Kalencom contended that the coatings should not be considered sheeting of plastics because they are not a continuous sheet of plastic. It also said sheeting must generally have a thickness of at least 0.25 mm, which is thicker than the coating on its jewelry boxes. Finally, the coating is not “of plastics” because of the presence of non-plastic materials in the form of additives, Kalencom said. Taken as a whole, the boxes are articles of paper, Kalencom said.

CIT disagreed. First, according to dictionary definitions, the “outer surface” of an article consists of those ingredients that are outward facing or constituting the exterior of the article, CIT said. The outer surface of Kalencom’s jewelry boxes is the Skivertex, MetalX or Pellaq coating, it said.

Those coatings are made of plastics, CIT said. Heading 3906 of the tariff schedule specifically covers acrylic polymers in primary forms, and the explanatory notes specifically say that plastics of chapter 39 may contain additives such as plasticizers, stabilizers, fillers and colorants. “Based on the high concentration of plastics in the coating layers, the court, therefore, determines that the outer surface is comprised of plastics, and this conclusion is consistent with subheading 4202.92.90, notwithstanding that the dispersions used contain non-plastic additives such as defoamers, surfactants and colorants,” CIT said.

Finally, CIT declined to apply Kalencom’s ”selective conception” of sheeting. Dictionaries define “sheeting” as a continuous film of some material, “which is thin, but not limited to a specific thickness in absolute terms.” Sheeting must be “thin, continuous and wide enough to cover a surface. The outer surface of all three types of covering materials … meet these requirements,” it said. Since the outer surface of the jewelry box is a sheeting of plastics, it is excluded from classification in subheading 4202.99.10 as “wholly or mainly covered with paper,” CIT said.

(The Kalencom Corp. v. U.S., Slip Op. 20-68, CIT # 15-00011, dated 05/18/20, Judge Reif)

(Attorneys: Peter Fitch of Fitch, King for plaintiff The Kalencom Corporation; Monica Triana for defendant U.S. government)