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Keywords

tariff

Related Cases

Lonza, Inc. v. U.S., 18 C.I.T. 230, 849 F.Supp. 51, 16 ITRD 1346

Facts

Lonza, Inc. imported ADC-6, which is used in the production of the antibiotic Imipenem, and contested its classification by Customs as an 'other oxygen-function amino-compound' under HTS. Lonza argued that ADC-6 should be classified as an antibiotic under HTS, citing its therapeutic properties and its role as an ingredient in the production of Imipenem. The court examined the historical context of the tariff definitions and the specific characteristics of ADC-6 in relation to the definitions provided in the HTS.

The subject merchandise was entered into the United States at JFK International Airport on April 2, 1989. Customs liquidated the entry on July 21, 1989, and Lonza filed its protest on September 27, 1989. Customs denied this protest on March 16, 1990, and Lonza commenced this action contesting that denial on March 22, 1990.

Issue

Whether ADC-6 can be classified as an antibiotic under the Harmonized Tariff Schedule of the United States (HTS) or if it should be classified as an 'other oxygen-function amino-compound.'

The issues before the court, then, are: (1) whether and to what extent this definition has survived enactment of the HTS; (2) if it does remain applicable, whether this definition impacts the classification of antibiotics under the HTS; and (3) if it does apply to the classification of antibiotics under the HTS, whether ADC–6 meets this definition.

Rule

The court determined that the definition of 'drugs' from the previous Tariff Schedules of the United States (TSUS) does not apply under the HTS, and that classification under the HTS requires independent satisfaction of the criteria for antibiotics.

The court finds that the TSUS definition of 'drugs' does not apply to the classification of antibiotics under the HTS, Customs' classification of ADC–6 is affirmed.

Analysis

The court analyzed the definitions of 'drugs' and 'antibiotics' under the HTS and concluded that ADC-6 does not meet the criteria for classification as an antibiotic. The court noted that while ADC-6 contributes to the synthesis of Imipenem, it does not possess the ability to kill or inhibit the growth of bacteria, which is a defining characteristic of antibiotics. The court emphasized that the HTS treats antibiotics as an independent category, separate from the broader category of drugs.

The court concludes that although ADC–6 itself may not be used as an antibacterial agent, the curative qualities it imparts to Imipenem are of such import that ADC–6 is properly regarded as exhibiting therapeutic properties.

Conclusion

The court affirmed the classification of ADC-6 as an 'other oxygen-function amino-compound' under HTS, concluding that it does not qualify as an antibiotic.

Because the court finds that the TSUS definition of 'drugs' does not apply to the classification of antibiotics under the HTS, Customs' classification of ADC–6 is affirmed.

Who won?

The United States Customs Service prevailed in the case, as the court upheld its classification of ADC-6, determining that it did not meet the criteria for antibiotics under the HTS.

The government urges that ADC–6 is not susceptible to dual classification, and that therefore Customs' classification should be affirmed.

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