CLA-2 RR:CR:TE 964222 RH
Port Director
U.S. Customs Service
9901 Pacific Highway
Blaine, WA 98230
RE: Protest number 3004-00-100085; Dog-eared fence pickets; Heading 4421;
Heading 4407
Dear Sir:
This is in reply to the Application for Further Review of Protest (AFR) number 3004-00-100085, that you forwarded to our office for review. Norman G. Jensen, Inc., filed the AFR on behalf of Canarc Forest Products, Ltd.
The protest is against Customs liquidation of six entries of merchandise under subheading 4407.10.0015 of the Harmonized Tariff Schedule of the United States (HTSUS), as general sawn lumber. The protestant entered the merchandise under subheading 4421.90.7040, HTSUS, as fence pickets.
The protest was timely filed on April 27, 2000. Review of the AFR is warranted under 19 CFR §§174.23 and 174.25.
FACTS:
The protestant claims that the merchandise at issue is dog-eared fencing made of mixed spruce-pine-fir (“S-P-F”). The merchandise is two inches in thickness by four inches in width and in lengths of 60 inches, 84 inches, 87¾ inches, 88½ inches and 88¾ inches. One end of each imported board is square cut and the other end is dog-eared.
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The protestant states that prior to importation of the subject merchandise it contracted with several Canadian truss manufacturing plants to make the precision dog-eared cuts at a 45-degree angle for a minimum length of one inch, but not exceeding two inches. The protestant further contends that the
merchandise may be used in its condition as imported as a heavy duty 2” x 4” fence picket, or may be sawed horizontally to create a number of thinner dog-eared slats, which could be used as thinner fence pickets. Further, the protestant states that it ordered, cut and shipped the precision cut dog-eared fence stock pursuant to specific orders received by Canarc from its various customers in the United States.
Three primary arguments are made in the protest that merchandise should be classified under heading 4421, HTSUS:
At the time the merchandise was imported, Customs had mandated classification of dog-eared fence pickets in subheading 4421.90.7040, HTSUS, without regard to dimension;
Proof of actual use of the merchandise in fences, or lack thereof, should have no effect on classification of the merchandise;
Reclassification should not have applied to fence pickets at or under six feet in length.
ISSUE:
What is the correct classification of the subject merchandise?
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRIs will be applied.
Chapter 44, HTSUS, provides for, among other things, wood and articles of wood. This chapter is structured so that less processed wood appears at the beginning of the chapter followed by more advanced wood in later headings within the same chapter. Thus, for example, heading 4403, HTSUS, is a general provision for wood in the rough, whether or not stripped of bark or sapwood or roughly squared, and heading 4421, HTSUS, is a basket provision for more advanced articles of wood that cannot be classified elsewhere in the chapter.
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Heading 4407, HTSUS, provides for wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding 6 mm. Heading 4421, HTSUS, provides for other articles of wood, including pickets, palings, posts and rails.
The protestant’s first argument is that at the time of importation of the merchandise Customs had issued a number of rulings classifying dog-eared pickets under subheading 4421.90.7040, HTSUS, without regard to their specific length. In it’s argument, the protestant cites New York Ruling Letter (NY) B80196, dated January 3, 1997, NY C83165, dated December 19, 1997, and
NY D83522, dated October 19, 1999.
In NY B80196, Customs classified eight different pickets, posts and rails, all worked on one end in some manner, under subheading 4421.90.7040, HTSUS. We note that the facts in that ruling do not address the length of the boards because they were all no longer than 6 feet and thus length was not at issue. In fact, we are unaware of any NY or HQ ruling in which Customs classified dog-eared boards over 6 feet as fence pickets under heading 4421, HTSUS.
Moreover, if the facts stated in a third-party ruling letter do not cover or address all the facts pertinent to another importer’s merchandise, the importer cannot rely on that ruling as precedent for classifying it’s merchandise or claiming that it’s merchandise is substantially similar to the merchandise in the ruling letter. Therefore, the protestant’s first argument has no merit.
Next, the protestant argues that subheading 4421.90.7040, HTSUS, is not a use provision and that Canarc should not bear responsibility to Customs beyond
its delivery of dog-eared fence stock to its U.S. customers that order the merchandise in that condition. Additionally, the protestant states that even if it had gone to the expense and trouble of hiring other companies to perform precision cuts to its merchandise solely for the purpose of favorable Customs treatment, it would not have violated U.S. law because an importer has the right to “tariff engineer.”
In another ruling cited by the protestant, NY D83522, dated October 19, 1999, Customs held that unfinished 2” x 4” x 72” and finished 1” x 4” x 72” dog-eared boards were recognizable as fence pickets and were of the class or kind of merchandise principally used as fence pickets in the United States. Accordingly, those boards were classified in subheading 4421.90.7040, HTSUS. However, in that ruling we also found that there was insufficient information to conclude that dog-eared pickets in lengths of 96 inches were principally used as fence pickets and those boards were classified in subheading 4407.10.0015, HTSUS.
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We are aware of the precedent that an importer has the right to fashion merchandise to obtain the lowest rate of duty or to avoid quota restrictions, provided no deceit is practiced, goods are truly invoiced and freely and honestly exposed to Customs for their examination. However, in this case the protestant has not submitted any persuasive evidence that its boards are fence pickets in their condition as imported. The file contains a memorandum to the protestant from Norman G. Jensen stating that “there are several cities and states that by law require that a pool have an 8’ high fence around it” and that they have “requests for dog-eared fencing that is long enough to bury a foot or more in the ground to prevent animals from digging under the fence.” Even if the protestant had submitted evidence to substantiate these claims, which it did not, the use of the boards for those limited purposes, is not the principal use of that class or kind of merchandise, as stated in NY D83522, supra.
We further find that cutting a dog-ear on all the boards at issue, regardless of length, is not a genuine step in manufacturing or producing fence pickets and is not legitimate tariff engineering but rather a disguise or artifice intended to escape quota restrictions under the 1996 U.S.-Canada Softwood Lumber Agreement. See, Heartland By-Products, Inc. v. United States, 264 F.3d 1126 (Fed. Cir. 2001). The overall characteristics of the boards are those of lumber. Precision length 2 x 4 boards of stud or 3 and better grade, and with a mill grade stamp are not characteristics of fence pickets. Moreover, the boards are sold to customers for the manufacture of trusses or finger-jointed studs. Accordingly, we find that the importer has failed to provide Customs with the information necessary to recognize the boards as fence pickets.
HOLDING:
The protest is DENIED.
The subject angle cut lumber is classified in subheading 4407.10.0015, HTSUS, which provides for “Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding 6 mm: coniferous: other: not treated: mixtures of spruce, pine and fir (“S-P-F”).” The applicable general column one rate of duty is “Free.”
At the time of importation of the merchandise, articles classifiable under subheading 4407.10.0015, HTSUS, which were products of Canada, were subject to entry requirements based on the U.S.-Canada Softwood Lumber Agreement of 1996. All invoices of such articles must be annotated with the
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Canadian province of manufacture. If manufactured in Ontario, Quebec, British Columbia or Alberta, a permit is required. We note that the protestant submitted appropriate softwood lumber export permits from the Canadian Government and supplied revised entry documentation to Customs.
In accordance with Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, section 3 A. (11) (b), you are to mail this decision and the Protest (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 this decision must be accomplished prior to mailing the decision.
The Office of Regulations & Rulings will make this decision available to Customs personnel and to the public on the Customs Service Home Page on the World Wide Web, www.customs.gov, by means of the Freedom of Information Act and by other methods of public distribution sixty days from the date of this decision.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division