Pleasure-Way Industries, Inc. v. United States

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Pleasure-Way, manufactures and sells Class B motorhomes. In 2008-2009, having bought 144 DaimlerChrysler AG “Sprinter” vans in the U.S., Pleasure-Way exported them to its facility in Canada, where it converted them into its Plateau TS and Ascent TS motorhomes, by installing fully-plumbed kitchen and bathroom fixtures with freshwater and sewage tanks, water heaters, sleeping quarters, countertops with propane burners, microwave ovens, wall-mounted televisions, refrigerators, large picture windows and porch lights, awnings, running boards, and exterior showers. When Pleasure-Way imported the resulting motorhomes into the U.S., it sought to avoid their being classified under the Harmonized Tariff Schedule of the United States (HTSUS), 8703.33.00, arguing that the motorhomes should be classified under subheading 9802.00.50, as “[g]oods re-entered after repair or alteration in Canada or Mexico.” Customs rejected the argument and assessed a 2.5% ad valorem import duty. The Federal Circuit affirmed summary judgment against Pleasure-Way. Pleasure-Way gave the converted motorhomes new names and sold them at a price double to triple the market price for Sprinter vans. It marketed them as upscale leisure vehicles for vacationing and recreation, while the Sprinter vans were marketed primarily as cargo vans. The likely use and consumer base for the vans as exported were broadly different from those for the motorhomes imported after conversion. View "Pleasure-Way Industries, Inc. v. United States" on Justia Law