CLA-2 CO:R:C:G 087835 RFC
Ms. Barbara Matarese
Acting Chief, CIE
U.S. Customs Service
6 World Trade Center
New York, New York 10048
RE: Difference of Opinion on Customs Form 6431; brick veneer
panels or modular panels
Dear Ms. Matarese:
This is in response to your memorandum dated August 22, 1990
and concerning a difference of opinion on Customs Form 6431. The
form originated in the district of Champlain, New York. It is
dated January 26, 1990, and concerns Entry No. 551-12091240. The
entry date is January 9, 1990. In your memorandum, you have
requested that we resolve a difference of opinion existing
between Customs officials in the district of Champlain and in the
New York office concerning the tariff classification under the
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA).
FACTS:
The merchandise may be described as brick veneer panels or
modular panels. The panels consist of 1/2 inch thick slices of
modular fired unglazed clay bricks (i.e., thin veneer bricks) set
on a 3/8 inch thick piece of exterior grade plywood with a 1-1/8
inch layer of rigid polyurethane insulation between the brick
slices and plywood. Each ply of the plywood is less than 6 mm in
thickness and is made of coniferous (Douglas fir) wood. The
panels are intended for attachment to the exterior or outside
walls of buildings.
Customs officials in the district of Champlain believe that
the instant product is properly classified under heading 6907
whereas Customs officials in the New York office believe that it
is properly classified under heading 4412.
ISSUE:
What is the proper tariff classification under the HTSUSA of
paneling for use on the exterior or outside walls of buildings
that consists of 1/2 inch thick slices of unglazed clay bricks
set on a 3/8 inch thick piece of plywood (each ply being less
than 6 mm in thickness and made of coniferous wood) with a 1-1/8
inch layer of rigid polyurethane insulation between the brick
slices and plywood?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is governed
by the General Rules of Interpretation (GRIs). GRI 1 states, in
part, that "for legal purposes, classification shall be
determined according to the terms of the headings and any
relative section or chapter notes and..., [unless otherwise
required, then according to the remaining GRIs, taken in
numerical order]." When goods are, prima facie, classifiable
under two or more headings, classification is to be effected
pursuant to the provisions of GRI 3. GRI 3(b) states, in part,
that "[m]ixtures [and] composite goods consisting of different
materials or made up of different components...which cannot be
classified by reference to 3(a)...[(i.e., there exists no
heading that provides the most specific description among
headings providing a more general description)], shall be
classified as if they consisted of the material or component
which gives them their essential character...." Explanatory Note
Rule 3(b)(VIII) states, in part, that "[t]he factor which
determines essential character will vary as between different
kinds of goods. It may, for example, be determined by the nature
of the material or component, its bulk, quantity, weight or
value, or the role of a constituent material in relation to the
use of the goods."
In the instant classification analysis, there exist two
headings under which the product may be potentially classified:
4412 and 6907. Heading 4412 provides for plywood, veneered
panels and similar laminated wood. Guidance concerning the
characteristics and properties of the articles provided for under
this heading can be found in the Explanatory Notes to heading
4412:
Panels of any...[of the articles provided for under heading
4412]...may be covered with other materials such as base
metal or plastics. In addition, the products of this
heading may be worked to form the shapes provided for in
heading [4409], curved, corrugated, perforated, cut or
formed to shapes other than square or rectangular or
submitted to any operation provided it does not give them
the character of articles of other headings.
In view of the above, it is clear, then, that panels containing
plywood and covered with materials of various types are to be
classified under heading 4412.
The alternate heading under which the goods may be
potentially classified is heading 6907. This heading provides
for "unglazed ceramic flags and paving, hearth or wall tiles;
unglazed ceramic mosaic cubes and the like, whether or not on a
backing." The phrase "on a backing," however, only applies to
and only modifies the terminology "unglazed ceramic mosaic cubes
and the like" because of the semicolon immediately following the
term "wall tiles" (i.e., the semicolon signals the end of one
article description and the beginning of another article
description within the provisions for heading 6907).
Accordingly, as the instant product consists of, among other
things, unglazed ceramic wall tiles (which is the article
description determined to be appropriate for unglazed thin veneer
bricks in Headquarters Ruling Letter 085566), it is only these
terms of heading 6907 that are to be compared and contrasted
against the terms of heading 4412 in the instant classification
analysis.
As indicated above, both headings 4412 and 6907 provide for
articles of which the instant product is composed. Therefore,
the product is, prima facie, classifiable under both of these
headings. (With respect to the polyurethane found between the
thin bricks and plywood, this is merely a material used in making
the panels. Heading 3909 provides for polyurethane. This
heading, however, is not a competing heading because it only
provides for a material found in the panels and not for the more
specific description of articles made of a material found in the
panels--as headings 4412 and 6907 so provide.)
The instant product is described as and is used as a panel
for covering the exterior or outer surface of a building. The
product would retain the characteristics and properties of a
panel if a material other than thin veneer bricks covered the
outer surface of the plywood because the product could function
as a panel with any number of other coverings (e.g., aluminum,
vinyl, rock). It is the plywood, however, that imparts the
shape, structure and underlying support to the panel. As such, it
is the plywood that gives the instant panel its characteristics
and properties as a surface covering for buildings. Therefore,
the role of the plywood in relation to the use of the panel gives
the panel its essential character. The instant product,
therefore, must be classified as if consisting of the plywood,
pursuant to GRI 3(b).
HOLDING:
The above-identified product is classified under subheading
4412.19.5010, HTSUSA, which provides for, among other things,
plywood, plywood consisting solely of sheets of woods, each ply
not exceeding 6 mm in thickness, with both outer plies of
coniferous wood, other, with at least on outer ply of Douglas fir
(Pseudotsuga menziesii).
Goods classified under subheading 4412.19.5010 and
qualifying for special tariff treatment under the United States-
Canada Free-Trade Agreement (FTA) receive a rate of duty during
1991 of 5.6 percent ad valorem. The general rate of duty is 8
percent ad valorem. Certain goods classified under subheading
4412.19, however, may also qualify for special tariff treatment
under subheading 9905.00.20 and the FTA. Within this subheading
are classified "[a]rticles provided for in subheadings 4412.19 or
4412.99, if tongued, grooved or rabbetted continuously along any
edge and of a type used in the construction of walls, ceilings or
other parts of buildings." Goods classified under subheading
9905.00.20 and qualifying for special tariff treatment under the
FTA during 1991 receive a rate of duty of 2 cents per kilogram
plus 1.6 percent ad valorem. This latter rate under the FTA set
forth in chapter 99 is in lieu of the former rate under the FTA
set forth in chapter 44.
Sincerely,
John Durant, Director
Commercial Rulings Division