CLA-2 RR:CR:GC 962756 MGM
Port Director
Port of New York
c/o Chief , Residual Liquidation and Protest Branch
6 World Trade Center, Room 761
New York, NY 10048-0945
Re: Protest 1001-98-105267; “Hakuenka CC” and “Viscolite SV” calcium carbonate-containing products
Dear Port Director:
This is our decision regarding protest 1001-98-105267, concerning your classification of “Hakuenka CC” and “Viscolite SV” calcium carbonate-containing products, under the Harmonized Tariff Schedule of the United States (HTSUS). In reaching this decision, consideration was given to protestant’s Memorandum in Support and to protestant’s supplementary submission dated April 3, 2000.
FACTS:
The merchandise at issue is a powder consisting of calcium carbonate with fatty acids bound to the exterior of the powder. The protestant states that the fine calcium carbonate (CaCO3) particles are formed by reacting calcium hydroxide (Ca(OH)2) with carbon dioxide (CO2). The protestant further states that the calcium carbonate is subjected to a “surface treatment” where fatty acid radical anions (RCOO-) are fixed to the surface of the calcium carbonate particles. The carboxyl group of the fatty acid is bound to the calcium of the calcium carbonate such that the hydrophilic carboxyl group is connected to the surface of the calcium carbonate particle while the hydrophobic hydrocarbon tail is at the opposite end of the fatty acid. This lends water-repellency to the particles and prevents them from agglomerating.
“Hakuenka CC” and “Viscolite SV” are used to improve viscosity and thixotrophy (the property of various gels of becoming fluid when disturbed) control in sealants and coatings.
Customs Laboratory Report 3-97-30023-001, dated December 6, 1996, states in part “[t]he sample, a fine white powder, consists of calcium carbonate coated with a fatty acid substance.”
The instant merchandise was entered under subheading 2836.50.00, HTSUS. The entries were liquidated under subheading 3824.90.9050 HTSUS (Annotated), on September 10, 1998, and timely protested on December 8, 1998.
ISSUE:
Are “Hakuenka CC” and “Viscolite SV” powder classified in subheading 2836.50.00, HTSUS?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs. Further, only those subheadings at the same level of indentation are comparable. In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The protestant argues in favor of classification within Chapter 28 of the HTSUS. Chapter 28, with few exceptions, is limited to separately defined chemical compounds. Note 1(a), Chapter 28, HTSUS. Here, the merchandise is not a separately defined chemical compound. Rather, it is a mixture of calcium carbonate and calcium carbonate bound to fatty acids. Those calcium carbonates which are on the exterior of the particles may be bound to fatty acids but those on the interior are not. Thus the product contains more than one compound. Protestant observes that Note 1(d), Chapter 28, permits the presence of added stabilisers necessary for preservation or transport without exclusion from Chapter 28. The ENs to Chapter 28 discuss what additives may be considered stabilisers. If an additive is considered a stabiliser, the product may be classified in Chapter 28 despite the presence of such additive. The EN states as follows:
[p]roducts added to certain chemicals to keep them in their original physical state are also to be regarded as stabilisers, provided that the quantity added in no case exceeds that necessary to achieve the desired result and that the addition does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use. By application of these provisions anti-caking agents may be added to the products of this Chapter. Such products with added water-repellents are, on the other hand, excluded since such agents modify the original characteristics of the products.
General EN (A), Chapter 28 at 239 (emphasis in original). Here, the hydrocarbon chains of the fatty acids bound to the exterior of the calcium carbonate impart water-repellency to the product. See Exhibit 2 to Memorandum in Support of Protest at p. 3. Therefore, the additive modifies the original characteristics of the product and cannot be considered a mere stabiliser.
Further, organo-inorganic compounds, with certain specific exceptions, are excluded from Chapter 28. Note 3, Chapter 28, HTSUS. The fatty acids bound to the exterior of the calcium carbonate particles are organic in nature while the calcium carbonate itself is considered inorganic. Thus, “Hakuenka CC” and “Viscolite SV” powder consist partly of organo-inorganic compounds. Such compounds are excluded from Chapter 28 unless specifically excepted from the general exclusion. There is an exception for “carbonates and peroxocarbonates of inorganic bases (heading 2836).” Note 2, Chapter 28, HTSUS. This exception allows carbonate (CO32-) itself to remain in Chapter 28 despite the presence of carbon. However, it does not expand the scope of Chapter 28 to include organic compounds which contain a carbonate moiety. For example, toluidine carbonate is included eo nomine in Chapter 29 (subheading 2922.50.10, HTSUS) rather than Chapter 28. Compounds which contain carbonate moities bound to organic structures, such as the instant merchandise, are excluded from Chapter 28 by virtue of Note 3(b), Chapter 28, HTSUS.
Protestant further argues that certain exclusionary language in EN (A)(4) to heading 2836, which reads “[t]he heading excludes…calcium carbonate in powder form, the particles of which are coated with a water-repellent film of fatty acids (e.g. stearic acid) (heading 38.24),” is not applicable to the instant products and that they are therefore included within heading 2836, HTSUS. Protestant differentiates the instant product from that described in the EN on two grounds: the fatty acids are not connected to one another and therefore don’t form a “film,” and the instant product is derived from vegetable fatty acid rather than stearic acid. See Protestant’s Memorandum in Support of Protest, p. 6. However the EN merely lists a certain type of product as one example known to the drafters of the ENs, that is specifically excluded from heading 2836. The protestant’s argument that merchandise which is very similar to the excluded product must be included because it is not specifically excluded is erroneous. Exclusionary language has no inclusionary effect. The EN does not seek to, nor could it, expand the scope of the heading so as to include mixtures of calcium carbonate with organo-inorganic compounds. Rather, the enumerated exclusion is just one application of Note 1, Chapter 28, HTSUS, which excludes mixtures. The legal text controls and resolves classification at the GRI 1 level.
Thus, “Hakuenka CC” and “Viscolite SV” are excluded from heading 2836, HTSUS. Neither do they fall within the scope of any of the more descriptive provisions of the tariff. Accordingly, they fall to heading 3824, HTSUS, which provides for, among other things, “Chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included.” Within this heading, the merchandise falls to the ultimate residual provision, 3824.90.9050, HTSUS (Annotated).
HOLDING:
“Hakuenka CC” and “Viscolite SV” are classified in subheading 3824.90.9050, HTSUS (Annotated). Since classification of the merchandise as indicated above will result in a higher rate of duty than claimed you should DENY the protest in full.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division