Court Opinion

ID: 4545854
Source: CourtListenerOpinion
Date Created: 2020-07-02 15:02:42.355314+00
Date Added: 2024-06-11T12:49:15.423384
License: Public Domain

Case: 19-1869    Document: 46     Page: 1   Filed: 07/02/2020

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                      APPLE INC.,
                    Plaintiff-Appellant

                             v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2019-1869
                  ______________________

    Appeal from the United States Court of International
 Trade in No. 1:13-cv-00239-CRK, Judge Claire R. Kelly.
                  ______________________

                   Decided: July 2, 2020
                  ______________________

    CATHERINE EMILY STETSON, Hogan Lovells US LLP,
 Washington, DC, for plaintiff-appellant. Also represented
 by CRAIG A. LEWIS, MICHAEL WEST; JAMES EDWARD
 RANSDELL, IV, DAVID PHILLIPS SANDERS, Cassidy Levy
 Kent USA LLP, Washington, DC.

     BEVERLY A. FARRELL, International Trade Field Office,
 Commercial Litigation Branch, Civil Division, United
 States Department of Justice, New York, NY, for defend-
 ant-appellee.  Also represented by JUSTIN REINHART
 MILLER; JOSEPH H. HUNT, JEANNE DAVIDSON, Washington,
 DC; PAULA S. SMITH, Office of the Assistant Chief Counsel,
 United States Bureau of Customs and Border Protection,
Case: 19-1869    Document: 46      Page: 2     Filed: 07/02/2020

 2                                APPLE INC.   v. UNITED STATES

 United States Department of Homeland Security, New
 York, NY.
                ______________________

     Before NEWMAN, DYK, and WALLACH, Circuit Judges.
 WALLACH, Circuit Judge.
     Appellant Apple Inc. (“Apple”) filed suit against Appel-
 lee United States (“the Government”) in the U.S. Court of
 International Trade (“CIT”), challenging U.S. Customs and
 Border Protection’s (“Customs”) classification of Apple’s
 iPad 2 Smart Cover (“Smart Cover”), model number
 MC939LL/A, under Harmonized Tariff Schedule of the
 United States (“HTSUS”) Subheading 6307.90.98. 1 Apple
 and the Government filed cross-motions for summary judg-
 ment, with Apple contending that its subject merchandise
 is properly classified under HTSUS Subheading
 8473.30.51, duty free, and the Government contending that
 Apple’s subject merchandise is properly classified under
 HTSUS Subheading 3926.90.99, at a duty rate of 5.3 per-
 cent ad valorem. The CIT denied Apple’s Cross-Motion and
 granted the Government’s, concluding, inter alia, that the
 subject merchandise was properly classified under HTSUS
 Subheading 3926.90.99. Apple Inc. v. United States, 375 F.
 Supp. 3d 1288, 1305 (Ct. Int’l Trade 2019); see J.A. 1 (Judg-
 ment).
    Apple appeals. We have jurisdiction pursuant to 28
 U.S.C. § 1295(a)(5). We affirm.

     1   “All citations to the HTSUS refer to the 20[11] ver-
 sion, as determined by the date of importation of the mer-
 chandise.” LeMans Corp. v. United States, 660 F.3d 1311,
 1314 n.2 (Fed. Cir. 2011).
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 APPLE INC.   v. UNITED STATES                                 3

                          BACKGROUND
                   I. The Subject Merchandise
     This appeal involves a single entry of merchandise,
 made by Apple “at the port of San Francisco International
 Airport, San Francisco, California on January 28, 2011.”
 Apple, 375 F. Supp. 3d at 1295 (citation omitted). 2 The en-
 try consisted of two models of the Smart Cover, which “dif-
 fer[ed] as to their outer layer,” with one made of leather
 and the other “composed of plastic.” Id. (citation omitted).
 Only the classification of the Smart Cover with plastic
 outer layer, model number MC939LL/A, remains at issue
 on appeal. See Appellant’s Br. 4; Appellee’s Br. 2. 3
       The Smart Cover is a “thin, durable cover” designed for
 exclusive use with the iPad 2. J.A. 164; see J.A. 306–07
 (Apple stipulating that the Smart Cover is described as a
 “computer cover” in commercial invoices); see also Apple,
 375 F. Supp. 3d at 1295 (providing that the Smart Cover is
 “sized to fit directly and precisely over the screen of an iPad
 2”). 4 The Smart Cover is “rectangular in shape” and “is

     2   Because the parties do not dispute the material
 facts, we cite to CIT’s recitation of the facts for ease of ref-
 erence. See Apple, 254 F. Supp. 3d at 1295–96.
      3  The CIT held that Apple did “not have standing to
 challenge Customs’ classification of the leather Smart Co-
 vers” because Customs had liquefied the leather Smart Co-
 vers duty-free, such that Apple “ha[d] not suffered an
 injury or harm that the [CIT’s] order [could] redress.” Ap-
 ple, 375 F. Supp. 3d at 1297. Apple does not challenge this
 on appeal. See Appellant’s Br. 4.
      4  The iPad 2 is a “portable,” “automatic data pro-
 cessing machine classifiable under [HTSUS] [H]eading
 8471.” Apple, 375 F. Supp. 3d at 1295; see HTSUS Head-
 ing 8471 (covering “automatic data processing machines”);
 HTSUS Ch. 84 Note 5(A) (explaining that, “[f]or the
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 4                                  APPLE INC.   v. UNITED STATES

 constructed of [four] rectangular panels” that may be
 “fold[ed] . . . into a [triangular] ‘stand’ position” for viewing
 the iPad’s screen. Apple, 375 F. Supp. 3d at 1295–96; see
 J.A. 71 (Apple expert declaration, explaining that the
 Smart Cover consists of “four panels” that may be folded to
 function as both a cover and a stand), 78–79 (advertising
 materials with images of the Smart Cover “fold[ed] into . . .
 [a] stand”), 164 (advertising materials, explaining that the
 “Smart Cover does double duty as a . . . stand”). Its exte-
 rior “is composed of plastic,” Apple, 375 F. Supp. 3d at 1295
 n.8; see id. (noting that Apple avers that the exterior is,
 more specifically, “comprised of polyethylene and polyure-
 thane”), with interior microfiber lining to clean the iPad 2’s
 screen, id. at 1296, and “an aluminum hinge” spine, id. at
 1295. “The Smart Cover aligns with” and “attache[s] to the
 iPad 2” by means of “magnets that are integrated into the
 edge of the iPad 2 and the Smart Cover’s spine.” Id.; see
 J.A. 80 (advertising materials, explaining that magnets
 within the iPad 2 “align . . . with the Smart Cover hinge”
 and that “magnets inside the Smart Cover help it stay
 put”). The iPad 2 contains a sensor such that, “when the
 Smart Cover is closed, the iPad 2 automatically enters
 sleep mode, and when it is open, the iPad 2 [automatically]
 turns on[.]” Apple, 375 F. Supp. 3d at 1296; see J.A. 80
 (similar).
                     II. Procedural History
     In July 2011, Customs liquidated the plastic Smart Co-
 vers under HTSUS Subheading 6307.90.98, at a duty rate
 of 7 percent ad valorem. Apple, 375 F. Supp. 3d at 1295;

 purposes of [HTSUS] [H]eading 8471, . . . ‘automatic data
 processing machines’ means machines capable of,” inter
 alia, “[s]toring the processing program or programs and at
 least the data immediately necessary for the execution of
 the program” and “[b]eing freely programmed in accord-
 ance with the requirements of the user”).
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 APPLE INC.   v. UNITED STATES                               5

 see HTSUS Subheading 6307.90.98 (covering “Other made
 up articles, including dress patterns: Other: Other”). Apple
 filed a protest of this action, asserting that the Smart Cover
 should have been classified under HTSUS Subhead-
 ing 8473.30.51, duty free. Apple, 375 F. Supp. 3d at 1294;
 see 19 U.S.C. § 1514 (providing that an importer may pro-
 test to Customs “the classification and rate and amount of
 duties chargeable” on an entry); HTSUS 8473.30.51 (cover-
 ing “Parts and accessories (other than covers, carrying
 cases and the like) suitable for use solely or principally
 with machines of headings 8469 to 8472: Parts and acces-
 sories of the machines of heading 8471: Other”). In Octo-
 ber 2012, Customs issued ruling HQ H216396,
 “address[ing] the proper classification” of two different
 Smart Cover models “materially similar” to, but not the
 same as that at issue here. Apple, 375 F. Supp. 3d at 1293–
 94; see J.A. 55 (HQ H216396) (addressing Smart Cover
 model nos. MS309/LLA and MD301/LLA, with plastic and
 leather exteriors, respectively). HQ H216396 “rejected
 [Apple’s] position” that Smart Covers “are classifiable un-
 der [HTSUS] [H]eading 8473” and “ruled that the plastic
 iPad Smart Cover is properly classified under [HTSUS]
 [S]ubheading 3926.90.99,” at a duty rate of 5.3 percent ad
 valorem. Apple, 375 F. Supp. 3d at 1294; see HTSUS Sub-
 heading 3926.90.99 (covering “Other articles of plastics
 and articles of other materials of headings 3901 to 3914:
 Other: Other”); see also J.A. 61 (HQ H216396). In January
 2013, Customs denied Apple’s protest. Apple, 375 F. Supp.
 3d at 1293; see 19 U.S.C. § 1515 (providing Customs with
 the authority to review protests made under 19 U.S.C.
 § 1514).
     In July 2013, Apple filed a summons and complaint be-
 fore the CIT, contesting Customs’ denial of Apple’s protest.
 Apple, 375 F. Supp. 3d at 1294; see 28 U.S.C. § 1581(a) (giv-
 ing the CIT “exclusive jurisdiction of any civil action com-
 menced to contest the denial of a protest, in whole or in
 part, under [19 U.S.C. § 1515]”). The parties cross-moved
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 6                                 APPLE INC.   v. UNITED STATES

 for summary judgment. Apple, 375 F. Supp. 3d at 1292.
 Apple continued to argue for classification of its merchan-
 dise under HTSUS Subheading 8473.30.51, duty free. Id.
 The Government sought classification of Apple’s merchan-
 dise under HTSUS Subheading 3926.90.99, in keeping
 with HQ H216396, rather than HTSUS Subheading
 6307.90.98, under which Customs had originally liquidated
 the plastic Smart Covers. Id. at 1292–93.
      The CIT concluded that the plastic Smart Covers “are
 properly classifiable within [HTSUS] [S]ubheading
 3926.90.99.” Id. at 1305. The CIT reasoned that, because
 HTSUS Subheading 8473.30.51 expressly excludes acces-
 sories that are “covers, carrying cases and the like,” id.
 at 1300, and Apple’s Smart Cover was, undisputedly, an
 accessory, but also a cover, the Smart Cover could not be
 properly classified under HTSUS Subheading 8473.30.51,
 id. at 1303. The CIT then concluded that, while the Smart
 Cover is a “composite good,” composed of, inter alia, a “plas-
 tic outer layer,” “a microfiber lining, an aluminum hinge,
 and magnets,” “[t]he plastic outer layer of the Smart Cover
 gives the merchandise its essential character,” such that
 the plastic Smart Cover is properly classifiable under
 HTSUS Subheading 3926.90.99. Id. at 1304.
                         DISCUSSION
        I. Standard of Review and Legal Framework
      The CIT “grant[s] summary judgment if the movant
 shows that there is no genuine dispute as to any material
 fact and the movant is entitled to judgment as a matter of
 law.” U.S. Ct. Int’l Trade R. 56(a). We review the CIT’s
 grant of summary judgment de novo, applying “the same
 standard employed by the [CIT] in assessing Customs’ clas-
 sification determinations.” Otter Prods., LLC v. United
 States, 834 F.3d 1369, 1374–75 (Fed. Cir. 2016) (internal
 citation omitted). “[W]e give great weight to the informed
 opinion of the CIT and it is nearly always the starting point
 of our analysis.” Schlumberger Tech. Corp. v. United
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 APPLE INC.   v. UNITED STATES                                 7

 States, 845 F.3d 1158, 1162 (Fed. Cir. 2017) (internal quo-
 tation marks, alterations, and citation omitted).
     “The classification of merchandise involves a two-step
 inquiry.” ADC Telecomms., Inc. v. United States, 916 F.3d
 1013, 1017 (Fed. Cir. 2019). First, we “determin[e] the
 proper meaning” of the terms within the relevant tariff pro-
 vision, “which is a question of law,” and, second, we deter-
 mine whether the subject merchandise “falls within” those
 terms, “which is a question of fact.” Sigma-Tau Health
 Sci., Inc. v. United States, 838 F.3d 1272, 1276 (Fed. Cir.
 2016). “The first step presents a question of law that we
 review de novo, whereas the second involves an issue of fact
 that we review for clear error.” Schlumberger, 845 F.3d at
 1162. “Where, as here, no genuine dispute exists as to the
 nature of the subject merchandise, the two-step inquiry col-
 lapses into a question of law we review de novo.” ADC, 916
 F.3d at 1017 (internal quotation marks and citation omit-
 ted).
      The HTSUS governs the classification of merchandise
 imported into the United States. See Wilton Indus., Inc. v.
 United States, 741 F.3d 1263, 1266 (Fed. Cir. 2013). The
 HTSUS is “considered . . . [a] statutory provision[] of law
 for all purposes.” 19 U.S.C. § 3004(c)(1); see Chemtall,
 Inc. v. United States, 878 F.3d 1012, 1026 (Fed. Cir. 2017)
 (explaining that “the tenth-digit statistical suffixes . . . are
 not statutory,” as those suffixes are not incorporated in the
 HTSUS’s legal text). “The HTSUS scheme is organized by
 headings, each of which has one or more subheadings; the
 headings set forth general categories of merchandise, and
 the subheadings provide a more particularized segregation
 of the goods within each category.” Wilton Indus., 741 F.3d
 at 1266. “The first four digits of an HTSUS provision con-
 stitute the heading, whereas the remaining digits reflect
 subheadings.” Schlumberger, 845 F.3d at 1163 n.4. “[T]he
 headings and subheadings . . . are enumerated in chapters
 1 through 99 of the HTSUS (each of which has its own sec-
 tion and chapter notes)[.]” R.T. Foods, Inc. v. United
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 8                                 APPLE INC.   v. UNITED STATES

 States, 757 F.3d 1349, 1353 (Fed. Cir. 2014). There are two
 types of HTSUS headings, “eo nomine [and] use provi-
 sions.” Schlumberger, 845 F.3d at 1164. “[A]n eo nomine
 provision . . . describes an article by a specific name.”
 CamelBak Prods., LLC v. United States, 649 F.3d 1361,
 1364 (Fed. Cir. 2011) (citation omitted). A use provision
 describes an article by its principal or actual use. See
 Aromont USA, Inc. v. United States, 671 F.3d 1310, 1313
 (Fed. Cir. 2012).
     The HTSUS “contains the ‘General Notes,’ the ‘General
 Rules of Interpretation’ (‘GRI’), the ‘Additional [U.S.] Rules
 of Interpretation’ (‘ARI’), and various appendices for par-
 ticular categories of goods.” R.T. Foods, 757 F.3d at 1353
 (footnote omitted). The GRI and ARI govern the classifica-
 tion of goods within the HTSUS. See Otter Prods., 834 F.3d
 at 1375. The GRI “govern the proper classification of all
 merchandise[.]” Carl Zeiss, Inc. v. United States, 195 F.3d
 1375, 1379 (Fed. Cir. 1999). The ARI are specific to use
 provisions. See Schlumberger, 845 F.3d at 1163 n.5 (ex-
 plaining that the ARI do not apply to eo nomine provisions).
     The GRI “apply in numerical order, meaning that sub-
 sequent rules are inapplicable if a preceding rule provides
 proper classification.” Id. at 1163. GRI 1 provides, in rel-
 evant part, that “classification shall be determined accord-
 ing to the terms of the headings and any relative section or
 chapter notes.” GRI 1. “Under GRI 1, [we] first construe[]
 the language of the heading, and any section or chapter
 notes in question, to determine whether the product at is-
 sue is classifiable under the heading.” Schlumberger, 845
 F.3d at 1163 (internal quotation marks and citation omit-
 ted). “[T]he possible headings are to be evaluated without
 reference to their subheadings, which cannot be used to ex-
 pand the scope of their respective headings.” R.T. Foods,
 757 F.3d at 1353 (citations omitted). “Absent contrary leg-
 islative intent, HTSUS terms are to be construed according
 to their common and commercial meanings, which are pre-
 sumed to be the same.” Well Luck Co. v. United States, 887
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 APPLE INC.   v. UNITED STATES                                9

 F.3d 1106, 1111 (Fed. Cir. 2018) (internal quotation marks
 and citation omitted). “To discern the common meaning of
 a tariff term, we may consult dictionaries, scientific author-
 ities, and other reliable information sources.” Kahrs Int’l,
 Inc. v. United States, 713 F.3d 640, 644 (Fed. Cir. 2013) (ci-
 tation omitted). We may also consider the relevant Explan-
 atory Notes (“EN”). See Fuji Am. Corp. v. United States,
 519 F.3d 1355, 1357 (Fed. Cir. 2008). “The [E]xplanatory
 [N]otes provide persuasive guidance and are generally in-
 dicative of the proper interpretation, though they do not
 constitute binding authority.” Chemtall, 878 F.3d at 1019
 (internal quotation marks and citation omitted).
     GRI 3 provides guidance when “goods are, prima facie,
 classifiable under two or more headings.” GRI 3. 5 In such
 cases “[t]he heading which provides the most specific de-
 scription shall be preferred to headings providing a more
 general description.” GRI 3(a). “Under this rule of relative
 specificity, we look to the provision with requirements that
 are more difficult to satisfy and that describe the article
 with the greatest degree of accuracy and certainty.” Carl
 Zeiss, 195 F.3d at 1380 (internal quotation marks and cita-
 tion omitted). “[C]omposite goods” that “cannot be classi-
 fied by reference to [GRI] 3(a), shall be classified as if they
 consisted of the material or component which gives them
 their essential character[.]” GRI 3(b). The essential char-
 acter inquiry “var[ies] as between different kinds of goods,”
 and “may, for example, be determined by the nature of the
 material or component, its bulk, quantity, weight or value,
 or by the role of a constituent material in relation to the
 use of the goods.” Home Depot U.S.A., Inc. v. United States,
 491 F.3d 1334, 1336–37 (Fed. Cir. 2007) (quoting EN (VIII)
 to GRI 3(b)). “[T]he essential character of the subject

     5    GRI 2 applies to “incomplete or unfinished arti-
 cle[s],” GRI 2(a), and “mixtures or combinations of [a] ma-
 terial or substance,” GRI 2(b), and is not relevant here.
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 10                                APPLE INC.   v. UNITED STATES

 articles is a question of fact.” CamelBak, 649 F.3d at 1369.
 Once we determine the appropriate heading, we apply
 GRI 6 to determine the appropriate subheading. GRI 6
 (providing that “the classification of goods” by subheadings
 “shall be determined according to the terms of those sub-
 headings and any related subheading notes and, mutatis
 mutandis, to the above [GRI], on the understanding that
 only subheadings at the same level are comparable”).
     The ARI contain specific rules for interpreting use pro-
 visions in the HTSUS. See ARI 1(a)–(d). ARI 1(a) provides
 that, when a tariff provision is “controlled by use (other
 than actual use),” then classification “is to be determined
 in accordance with the use in the United States at, or im-
 mediately prior to, the date of importation, of goods of that
 class or kind to which the imported goods belong, and the
 controlling use is the principal use[.]” ARI 1(b) governs
 classification by “actual use.” “[A]ctual use” considers only
 the “[a]ctual use of the imported goods”; “principal use”
 considers a variety of factors, including actual use, “to clas-
 sify particular merchandise according to the ordinary use
 of such merchandise, even though particular imported
 goods may be put to some atypical use.” Aromont, 671 F.3d
 at 1313–14 (internal quotation marks and citation omit-
 ted).
  II. The CIT Did Not Err in Granting Summary Judgment
                    to the Government
  A. HTSUS Heading 8473 Excludes “Covers” Including Ap-
                   ple’s Smart Cover
     The CIT concluded that, because HTSUS Heading 8473
 expressly excludes accessories that are “covers, carrying
 cases and the like,” Apple’s Smart Cover, as a cover, could
 not be properly classified under HTSUS Heading 8473. Ap-
 ple, 375 F. Supp. 3d at 1301–02. Apple argues the CIT
 erred in its interpretation of HTSUS Heading 8473, be-
 cause, while Heading 8473 excludes accessories that are
 “covers,” the Explanatory Note to HTSUS Heading 8473
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 APPLE INC.   v. UNITED STATES                               11

 “creates an exception” to this exclusion, for “covers that
 also act as stands for certain machines.” Appellant’s Br. 16
 (capitalization normalized). Apple argues that because the
 “Smart Cover is an ‘accessory’ and a ‘cover’ that is also a
 ‘stand,’ it is properly classified within [HTSUS] Heading
 8473.” Id. at 31 (capitalization normalized). We disagree
 with Apple.
     The CIT did not err in concluding that HTSUS Head-
 ing 8473 expressly excludes “covers,” including the Smart
 Cover. Tariff classification “shall be determined according
 to the terms of the headings and any relevant section or
 chapter notes.” GRI 1. HTSUS Heading 8473 encompasses
 “accessories” except for “covers, carrying cases and the
 like[.]” HTSUS Heading 8473 (covering “[p]arts and acces-
 sories (other than covers, carrying cases and the like) suit-
 able for use solely or principally with [certain] machines”).
 The section and chapter notes for HTSUS Heading 8473
 provide no additional relevant guidance. See generally
 HTSUS Sect. XVI Notes; HTSUS Ch. 84 Notes. It is un-
 contested that the Smart Cover is an “accessory” within the
 meaning of HTSUS Heading 8473. Appellant’s Br. 34; Ap-
 pellee’s Br. 14; see Apple, 375 F. Supp. 3d at 1300 (“An ‘ac-
 cessory’ is therefore something that relates directly to and
 serves a secondary or subordinate function to the item ac-
 cessorized.”). It is uncontested that the Smart Cover is a
 “cover” within the meaning of HTSUS Heading 8473. Ap-
 pellant’s Br. 34; Appellee’s Br. 14; see Apple, 375 F. Supp.
 3d at 1301 (“A ‘cover’ is therefore something that goes over
 or encompasses a specific object and offers protection.”).
 Accordingly, Apple’s Smart Cover is expressly excluded
 from the scope of HTSUS Heading 8473. See Schlum-
 berger, 845 F.3d at 1163 (providing that the GRI “apply in
 numerical order,” such that “subsequent rules are inappli-
 cable if a preceding rule provides proper classification”); see
 also Conn. Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992)
 (providing that “[w]hen the words of a statute are unam-
 biguous, then, this first canon [of statutory interpretation]
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 12                                 APPLE INC.   v. UNITED STATES

 is also the last: ‘judicial inquiry is complete’” (quoting Ru-
 bin v. United States, 449 U.S. 424, 430 (1981))).
      Apple’s counterarguments are unpersuasive. Apple ar-
 gues that, because the Explanatory Note to HTSUS Head-
 ing 8473 “creates an exception to [HTSUS] [H]eading 8473
 for covers that also act as stands for certain machines,” Ap-
 pellant’s Br. 16 (capitalization normalized), “[HTSUS]
 Heading 8473 captures hybrid stand-covers like the Smart
 Cover,” id. at 15. First, this argument misunderstands the
 purpose of Explanatory Notes. Explanatory Notes cannot
 create an exception to an HTSUS heading. Explanatory
 Notes are “generally useful as guides to the scope of unclear
 HTSUS headings, but they are not legally binding.”
 Sigma-Tau, 838 F.3d at 1280 (internal quotation marks,
 alterations, and citation omitted); see H.R. REP. No. 100–
 576, at 549 (1988) (Conf. Rep.), as reprinted in 1988
 U.S.C.C.A.N. 1547, 1582 (“Although generally indicative of
 proper interpretation of the various provisions of the
 [HTSUS], the Explanatory Notes . . . are not legally bind-
 ing,” and, therefore “should not be treated as dispositive.”).
 They cannot be used to “narrow” or amend or create ambi-
 guity in “the language of [a] [HTSUS] heading[.]” Rubie’s
 Costume Co. v. United States, 337 F.3d 1350, 1359 (Fed.
 Cir. 2003).
     Second, Apple’s argument is premised on a faulty read-
 ing of Explanatory Note 84.73. The plain language of Ex-
 planatory Note 84.73 does not support the conclusion that
 HTSUS Heading 8473 encompasses hybrid cover-stands.
 Explanatory Note 84.73 provides, in full:
      [HTSUS Heading 8473] excludes covers, carrying
      cases and felt pads; these are classified in their ap-
      propriate headings. It also excludes articles of fur-
      niture (e.g., cupboards and tables) whether or not
      specially designed for office use (heading 94.03).
      However, stands for machines of headings 84.69 to
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 APPLE INC.   v. UNITED STATES                                13

     84.72 not normally usable except with the ma-
     chines in question, remain in this heading.
 EN 84.73. Apple argues that we should read the first and
 second sentence of the Explanatory Note as a continuous
 “general list” of exclusions, Appellant’s Br. 20; see id. at 17–
 18 (arguing that the “covers and furniture exclusions are
 united by parallel language” and are “grammatically inter-
 dependent”), with the third sentence, “[t]he stands pro-
 viso[,] craft[ing] an exception” from both preceding
 exclusions, id. at 20. Apple’s reading is incorrect. It is con-
 trary to “the [rule] of the last antecedent and its corollary,
 the rule of punctuation[.]” Finisar Corp. v. DirecTV Grp.,
 Inc., 523 F.3d 1323, 1336 (Fed. Cir. 2008). It is also directly
 controverted by the drafting history of Explanatory Note
 84.73. See WestRock Va. Corp. v. United States, 941 F.3d
 1315, 1320 (Fed. Cir. 2019) (“[S]tatements from the legis-
 lative history illuminate [the drafter’s] intent[.]”).
     The “rule of the last antecedent” provides that, absent
 “other,” contrary “indicia of meaning,” “a limiting clause or
 phrase . . . should ordinarily be read as modifying only the
 noun or phrase that it immediately follows.” Lockhart v.
 United States, 136 S. Ct. 958, 962–63 (2016) (quoting Barn-
 hart v. Thomas, 540 U.S. 20, 26 (2003)). The first two sen-
 tences of Explanatory Note 84.73 are not a continuous list.
 They are two discrete sentences that provide two distinct
 exclusions. See U.S. Nat’l Bank of Or. v. Indep. Ins. Agents
 of Am., Inc., 508 U.S. 439, 454 (1993) (“[T]he meaning of a
 statute will typically heed the commands of its punctua-
 tion.”). The first sentence consists of two independent
 clauses separated by a semicolon: It mirrors the language
 of HTSUS Heading 8473 to exclude “covers, carrying
 cases[,] and felt pads”; it indicates those goods should be
 “classified in their appropriate headings,” whatever those
 are. EN 84.73; see HTSUS Heading 8473 (excluding “co-
 vers, carrying cases[,] and the like”). The second sentence
 adds a new category of excluded goods, using parentheti-
 cals to better define and explain its application: HTSUS
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 14                                APPLE INC.   v. UNITED STATES

 Heading 8473 also excludes “articles of furniture (e.g., cup-
 boards and tables) whether or not specially designed for of-
 fice use”—those are already covered by another HTSUS
 Heading “([HTSUS] [H]eading 9403).” EN 84.73; see
 HTSUS Heading 9403 (covering “Other furniture and parts
 thereof,” including “[m]etal furniture” like “racks, display
 cases, shelves, partitions and other similar fixtures,” and
 “wooden furniture”). They are not “one collective point,” as
 Apple believes. Appellant’s Br. 21. Rather, “[e]ach clause,”
 each sentence, “is distinct and ends with a period, strongly
 suggesting that each may be understood completely with-
 out reading any further.” Jama v. Immigration & Customs
 Enf’t, 543 U.S. 335, 344 (2005). With their “varied syntax”
 and dissimilar goods, the two exclusions make—at best—a
 discontinuous list. See Lockhart, 136 S. Ct. at 963 (explain-
 ing that when “a list of terms or phrases” has “varied syn-
 tax” or “items that readers are [not] used to seeing listed
 together,” that list should not be read as a “‘single, inte-
 grated list’” with a terminal qualifier modifying each item
 or phrase (quoting Jama, 543 U.S. at 344 n.4 )).
     The third and final sentence of Explanatory Note 84.73
 carves out an exception: “However, stands for machines of
 [HTSUS] [H]eadings 84.69 to 84.72 not normally usable ex-
 cept with the machines in question, remain in this head-
 ing.” EN 84.73. To the extent it relates to the preceding
 exclusions, it is governed by “the rule of the last anteced-
 ent.” Lockhart, 136 S. Ct. at 962 (explaining that, when
 presented with “a list of terms or phrases followed by a lim-
 iting clause, we . . . typically appl[y] an interpretive strat-
 egy called the ‘rule of the last antecedent’”). This means
 that it only applies to the exclusion immediately preceding
 it—the “furniture” exclusion. See Barnhart, 540 U.S. at 26
 (“Referential and qualifying words and phrases, where no
 contrary intention appears, refer solely to the last anteced-
 ent” (quoting 2A N. Singer, Sutherland on Statutory Con-
 struction § 47.33, p. 369 (6th rev. ed. 2000))). Accordingly,
 Explanatory Note 84.73 indicates that HTSUS Heading
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 APPLE INC.   v. UNITED STATES                               15

 8473 excludes “covers, carrying cases[,] and felt pads” with-
 out exception. EN 84.73; see HTSUS Heading 8473 (simi-
 lar). It further indicates that HTSUS Heading 8473
 excludes “furniture,” such as “cupboards and tables,” un-
 less that furniture is a “stand[] normally usable” only with
 certain, specified machinery. EN 84.73; see HTSUS Head-
 ing 8473 (enumerating relevant machinery).
      If any doubt still remained, the drafting history of
 HTSUS Heading 8473 and EN 84.73 confirms our reading.
 Specifically, the subcommittee responsible for drafting
 both HTSUS Heading 8473 and EN 84.73 drafted the ex-
 clusions separately, with the “stands” exception connected
 to the “furniture exclusion.” J.A. 297–99. The subcommit-
 tee first amended HTSUS Heading 8473 so that, rather
 than cover only “[p]arts . . . of [certain] machinery,” it cov-
 ered “[p]arts and accessories (other than covers, carrying
 cases[,] and the like) of [certain] machine[s][.]” J.A. 299.
 The subcommittee explained that this amendment “would
 make it clear that the heading includes certain auxiliary
 devices (e.g., copy holders and automatic spacing devices
 for typewriters) which, because they are detachable and of
 optional use, were not really parts of office appliances.”
 J.A. 297. The subcommittee elected to “exclude ‘covers,
 carrying cases and the like,’” from HTSUS Heading 8473,
 in keeping with “earlier decisions regarding [other] ma-
 chines[.]” J.A. 297–98. The subcommittee amended Ex-
 planatory Note 84.73 to reflect the “[e]xclu[sion] [of]
 carrying cases, covers, felt pads, etc.” J.A. 298. The sub-
 committee only then turned to the question of “[s]pecial ar-
 ticles of furniture supporting office appliances” and
 “decided to add a paragraph [to Explanatory Note 84.73]
 stating that the present heading covers stands for office
 machines, not normally usable except with those ma-
 chines.” J.A. 298. This shows that, when drafting Explan-
 atory Note 84.73, the subcommittee considered the
 exempted “stands” to be “[s]pecial articles of furniture,” un-
 related to any “[e]xclusions” for “carrying cases, covers,
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 16                                APPLE INC.   v. UNITED STATES

 [and] felt pads.” J.A. 298. This confirms, as the language
 of Explanatory Note 84.73 suggests, that Explanatory Note
 84.73’s “covers” exclusion and “furniture” exclusion are dis-
 tinct, and that the “stand” exception applies only to the im-
 mediately preceding “furniture” exclusion. EN 84.73.
 Explanatory Note 84.73, therefore, does not suggest, much
 less create, an exception to HTSUS Heading 8473’s exclu-
 sion of “covers” for hybrid cover-stands.
      Apple further argues that, because HTSUS Heading
 8473 is a “principal-use provision,” Appellant’s Br. 33, the
 CIT erred by failing to consider the Smart Cover’s principal
 use as a stand, id. at 34. Apple argues that “because the
 Smart Cover is not just a cover, it does not fall within”
 HTSUS Heading 8473’s “exclusion” of covers. Id. (empha-
 sis omitted). This argument is without merit. It is predi-
 cated on the assumption that Explanatory Note 84.73
 creates an exception for hybrid cover-stands to HTSUS
 Heading 8473’s exclusion of covers. See Appellant’s Br. 34
 (arguing that “[t]he Smart Cover” is classifiable under
 HTSUS Heading 8473 “because it is a ‘stand’ according to
 the . . . requirements of the Explanatory Notes proviso”
 (citing EN 84.73)). As discussed above, it does not. Fur-
 ther, while HTSUS Heading 8473 is a principle-use provi-
 sion, this does not alter our reading of “cover.” HTSUS
 Heading 8473 requires that an accessory be “suitable for
 use solely or principally with [certain] machines.” HTSUS
 Heading 8473. It is uncontested that Apple’s Smart Cover
 is “solely or principally” for use with the iPad 2. Apple, 375
 F. Supp. 3d at 1295–96. This does not obviate the need to
 apply GRI 1 to the remaining terms of HTSUS Heading
 8473. See Carl Zeiss, 195 F.3d at 1379 (explaining that the
 GRI “govern the proper classification of all merchandise”).
 Nor does it compel us to give the terms of HTSUS Heading
 8473 a meaning other than their “common and commercial
 meaning.” Well Luck, 887 F.3d at 1111 (internal quotation
 marks and citation omitted). Accordingly, the CIT properly
 concluded that HTSUS Heading 8473 expressly excludes
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 APPLE INC.   v. UNITED STATES                               17

 covers, and, as such, does not encompass Apple’s Smart
 Cover.
    B. Apple’s Smart Cover Is Properly Classified Under
                  HTSUS Heading 3926
     Having concluded that “the Smart Cover,” as “a cover,”
 was “excluded from [HTSUS] [H]eading 8473,” Apple, 375
 F. Supp. 3d at 1303, the CIT turned to HTSUS Headings
 3926 and 6307, id. at 1304. The CIT considered both head-
 ings, and concluded that, while “[t]he Smart Cover is . . . a
 composite good,” made of plastic and fabric and therefore
 “prima facie classifiable under either” HTSUS Heading
 3926 or 6307, because “[t]he plastic outer layer of the
 Smart Cover gives the merchandise its essential charac-
 ter,” it was properly classified under HTSUS Heading
 3926. Id. at 1304. Apple argues that the CIT “erred in
 applying [GRI 3(b)’s essential character analysis] to clas-
 sify the Smart Cover under [HTSUS] Heading 3926,” be-
 cause, “[h]ad the [CIT] read Explanatory Note 84.73
 correctly, it would have classified the Smart Cover under
 [HTSUS] Heading 8473[.]” Appellant’s Br. 40 (capitaliza-
 tion normalized). The Government argues that the CIT
 correctly classified Apple’s Smart Cover under HTSUS
 Heading 3926, rather than, as Customs had, under HTSUS
 Heading 6307, because “[t]he plastic Smart Cover is a com-
 posite good whose plastic outer layer provides its essential
 character[.]” Appellee’s Br. 28 (capitalization normalized).
 We agree with the Government.
    The CIT did not err in concluding that Apple’s Smart
 Cover is properly classified under HTSUS Heading 3926.
 HTSUS Heading 6307 covers “[o]ther made up articles,” of
 any textile material, “including dress patterns.” HTSUS
 Heading 6307; see HTSUS Ch. 63 Note 1. HTSUS Heading
 3926 covers “[o]ther articles of plastics and articles of other
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 18                                APPLE INC.   v. UNITED STATES

 materials of [HTSUS] [H]eading[s] 3901 to 3914.” 6 Apple’s
 Smart Cover is composed of various materials including
 “microfiber lining” and a “plastic outer layer.” Apple, 375
 F. Supp. 3d at 1304. It is, therefore, a composite good, see
 GRI 3(b) (providing that a “composite good” is one “consist-
 ing of different materials or made up of different compo-
 nents”), and “prima facie[]classifiable under” either
 HTSUS Heading, GRI 3. Because neither HTSUS Heading
 3926 nor 6307 is more specific, see HTSUS Headings 3926
 (providing a catch-all provision for “[o]ther articles of plas-
 tics”), 6307 (providing a catch all provision for “[o]ther
 made up [textile] articles”), we proceed to GRI 3(b). GRI
 3(b) provides that otherwise unclassifiable composite goods
 must be “classified as if they consisted of the material or
 component which gives them their essential character[.]”
 GRI 3(b). Neither party challenges the CIT’s finding that
 the Smart Cover’s “plastic outer layer . . . [provides] its es-
 sential character.” Apple, 375 F. Supp. at 1304–05; see Ap-
 pellant’s Br. 40–41 (arguing that the CIT “erred” in its
 essential character analysis based on “the [CIT’s] mistaken
 reading of Explanatory Note 84.73”); Appellee’s Br. 28–31
 (arguing that the Smart Cover’s plastic outer layer gives it
 its essential character). The Smart Cover therefore, is
 properly classified under HTSUS Heading 3926. Accord-
 ingly, the CIT did not err in classifying Apple’s Smart
 Cover under HTSUS Subheading 3926.90.99.

      6   “Plastics” for the purposes of HTSUS Heading 3926
 are “materials . . . which are or have been capable, either
 at the moment of polymerization or at some subsequent
 stage, of being formed under external influence (usually
 heat and pressure, if necessary with a solvent or plasti-
 ciser) by molding, casting, extruding, rolling[,] or other pro-
 cess into shapes which are retained on the removal of the
 external influence.” HTSUS Ch. 39 Note 1.
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 APPLE INC.   v. UNITED STATES                           19

                          CONCLUSION
     We have considered Apple’s remaining arguments and
 find them unpersuasive. Accordingly, the Judgment of the
 U.S. Court of International Trade is
                          AFFIRMED