UNITED STATES COURT OF INTERNATIONAL TRADE

Slip Op. 25-139

On October 21, 2025, in Slip Op. 25-139, Judge Timothy Reif, on behalf of the Court of International Trade (CIT), considered a Rule 55(b) motion of plaintiff United States for a default judgment against defendant corporation E-Dong. The dispute arose from the plaintiff’s claim against the defendant for unpaid federal excise taxes (FET).

During the years of 2017 to 2020, the defendant imported Korean distilled beverage soju to California and Illinois, classifying the imported goods as rice wine products under Harmonized Tariff Schedule of the United States (HTSUS) subheading 2206.00.4500. However, Customs determined that the defendant’s imported goods were distilled soju products. Distilled soju products are classified under HTSUS subheading 2208.90.7500.

Although both HTSUS classifications are duty-free, “rice wine carries an FET of $18 per barrel, whereas merchandise classified as distilled spirits is subject to an FET of $13.50 per proof gallon.” By improperly classifying its goods as rice wine products, the defendant corporation paid substantially fewer taxes than it would have owed had it properly classified its products as distilled spirits.

Judge Reif held in favor of the plaintiff United States, ordering the payment of unpaid FET on the defendant’s goods, along with the payment of pre- and post-judgment interest. Judge Reif explained that the improper classification under the HTSUS was a material misstatement under 19 USC § 1952(a), which prohibits the entry of merchandise into the commerce of the United States by means of ‘any document or electronically transmitted data or information, written or oral statement, or act which is material and false.’” 19 USC § 1592(a)(1)(A)(i).

Judge Reif affirmed Customs’s requirement that the defendant corporation pay its unpaid taxes. Finally, citing principles of equity and 28 USC § 1961, Judge Reif awarded the plaintiff pre- and post-judgment interest. Through his holding in Slip Op. 25-139, Judge Reif emphasized the importance of proper classification of goods under the HTSUS and demonstrated the consequences of failing to answer a complaint, respond to a motion, or appear in a case.