LONDON The U.S. Court of International Trade (CIT) has ruled that the U.S. government should be able to seek lost duties from an importer of iron pipe fittings from China, but said it could not demand penalties for negligence.
The U.S. Customs and Border Protection issued a letter to Nitek Electronics Inc. in 2004 claiming that the company owed duties on gas meter swivels and nuts imported between June 14, 2001, and March 22, 2004, because the merchandise was misclassified under the U.S. Harmonized Tariff Schedule.
Customs later said that Dallas-based Nitek had failed to classify the merchandise as subject to a 2003 anti-dumping order, adding that the company "entered or attempted to enter pipe fittings into the commerce of the United States by means of material false statements and documents and/or omissions," and in February last year issued a final penalty claim for negligence.
Nitek said in March 2011 that its method of classifying merchandise was done carefully, but that it would pay all duties owed to settle the matter although it contested the penalty.
Senior Judge Judith M. Barzilay ruled that while the U.S. governments attempt to receive duties was reasonable, she dismissed the penalty claim because the government did not notify Nitek of the change in the penalty claim from the administrative claim.