• HQ 966462
• Jan 23, 2004

• Type : Classification • HTSUS : 3204.17.90
•  Revokes:   F83432     Related:   F83432; I86471; 953655; 956158; 956976; 965614; 965615; 966063   

CLA-2 RR: CR: GC 966462 DBS

Mr. John Pelligrini
McGuire Woods, LLP
Park Avenue Tower
65 East 55th Street
New York, NY 10022-3219

RE: Revocation of NY F83432; Flushed pigment color preparations; "Blue Flush"

Dear Mr. Pelligrini:

On March 27, 2000, the Director, U.S. Customs and Border Protection National Commodity Specialist Division, New York, issued to you on behalf of your client, Micro Inks, Inc. (“Micro Inks”), New York Ruling Letter (NY) F83432, classifying “Blue Flush” in subheading 3215.19.00, Harmonized Tariff Schedule of the United States (HTSUS), as a printing ink. In light of NY I86471, dated February 14, 2003, which classified substantially similar products in the provision for preparations based on pigments, subheading 3204.17.90, HTSUS, we have reviewed NY F83432 for correctness. Consideration was given to the supplemental information and arguments provided in your letters of May 1, June 19, June 24, and July 14, 2003, as well as telephonic discussions with this office and the comments submitted by you in response to the proposed notice of revocation. We have found NY F83432 to be incorrect. This ruling sets forth the correct classification.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of the above identified ruling was published on September 24, 2003, in the Customs Bulletin, Volume 37, Number 39. Six comments were received in response to the notice. Four were in favor of the proposed action. Two were opposed to it.

FACTS: NY F83432 stated that the product consists of six components: pigment blue 15:3, resin, gellant, antioxidant, vegetable oil and ink oil. In your ruling request of March 7, 2000, to the National Commodity Specialist Division, you state that “Blue Flush” is a “concentrated ink in liquid form…used in engineered printing ink formulations.” No sample was provided for analysis by the Customs laboratory. You have since stated that the product does not fall within the meaning of concentrated printing inks for purposes of heading 3215, HTSUS.

Additional information submitted to this office indicates that the instant flush is used in heat-set and sheet-fed printing applications. You state that the product is technically useable in its condition as imported as a printing ink but that it is not actually used as a printing ink because it is not press-ready. You maintain that “Blue Flush” should be classified as a printing ink because it is considered ink in the industry. However, industry sources indicate that flushes are the color ingredient in ink, the most common form in which organic pigments consumed in ink. They are generally used in the manufacture of heat-set inks, sheet-fed inks and newsprint ink. See SRI International's Chemical Economics Handbook (2001); The Printing Ink Manual (Fifth ed., 1993) (hereinafter “Ink Manual”). The Department of Paper Engineering, Chemical Engineering and Imaging at Western Michigan University provides in its website that flushes are:

… prepared as dyes in aqueous solutions, converted to pigments, precipitated, filtered and washed. The filter cake is mixed with a viscous varnish in a large dough mixer, a process known as flushing. The varnish eventually replaces the water adsorbed on the particles. Some water separates and is poured off. The remainder is removed by heating under vacuum. The flushed pigment is sold to the ink manufacturer….

http://www.wmich.edu/ppse/inks/ visited on Aug. 18, 2003. See also Ink Manual, 709 and 814; National Association of Printing Ink Manufacturer's (NAPIM) Printing Ink Handbook, 100 (Fifth ed.); What is an Ink?, Technical Library, Sun Chemical Latin America (hereinafter "Sun Chem."), http://www.tintas.com/tech_ info/what_is_ink.html; How is Ink Manufactured?, Sun Chem., http://www.tintas.com/tech_info/manufactured.html, both visited on Dec. 12, 2003.

Once sold to a manufacturer, there are several methods to convert a flush into ink. Commonly, the flush is further processed by adding additional oil, varnish, extender, additives and the like, which are mixed under specific conditions to attain desired functional properties. The ink mixture is then tested for specific physical requirements and put through a series of filtration steps before it becomes finished ink. See How is Ink Manufactured?, Sun Chem., supra.

Additionally, testimony given by expert witnesses and officers of Micro Inks and its parent company, Hindustan Inks and Resins, Ltd., before the U.S. International Trade Commission during a preliminary investigation into a claim by competitors for the imposition of countervailing and antidumping duties continually refers to “flush” and “ink” as distinct products. For example, it is stated that Micro Inks formulates its own inks, and that only a very small percentage of the flushes it imports are sold in the merchant market, as the remainder is used by Micro Inks in formulating its inks. The President and CEO of Micro Inks also describes certain Micro Ink flushes as having a lower percentage by weight of pigment than its competitors' flushes, whose pigment percentages are similar to that of the “Blue Flush” (provided to Customs as part of the March 7, 2000 ruling request). See Transcript, Preliminary Investigation, In the Matter of Certain Colored Synthetic Organic Oleoresinous Pigment Dispersions from India, United States International Trade Commission ("USITC"), June 27, 2003, transcribed by Heritage Reporting Corporation, Official Reporters.

ISSUE:

Whether "Blue Flush" is classified in heading 3204, HTSUS, as a preparation based on pigments or in heading 3215, HTSUS, as a printing ink.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The HTSUS provisions under consideration are as follows:

3204 Synthetic organic coloring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic coloring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined:

Synthetic organic coloring matter and preparations based thereon as specified in note 3 to this chapter:

3204.17 Pigments and preparations based thereon: Other:

3204.17.90 Other

* * * 3215 Printing ink, writing or drawing ink and other inks, whether or not concentrated or solid: Printing ink:

3215.19.00 Other * * *

You contend that Blue Flush is properly classified in heading 3215, HTSUS. Note 3 to Chapter 32, HTSUS, provides, in pertinent part, that “[h]eadin[g] 3204…appl[ies] also to preparations based on coloring matter …of a kind …used as ingredients in the manufacture of coloring preparations. The headings do not apply, however…to other preparations of heading 3207, 3208, 3209, 3210, 3212, 3213 or 3215.” EN 32.04(I)(E) states that the heading includes “[o]ther preparations based on synthetic organic colouring matter of a kind used for colouring any material or used as ingredients in the manufacture of colouring preparations. However, the preparations referred to in the last sentence of Note 3 to this Chapter are excluded.”

Since preparations of heading 3215, HTSUS, are excluded from classification in heading 3204, HTSUS, we will first address heading 3215, HTSUS. There are no relevant section or chapter notes for printing ink of heading 3215, HTSUS. EN 32.15 describes printing ink as follows:

(A) Printing inks (or colours) are pastes of varying consistency, obtained by mixing a finely divided black or coloured pigment with a vehicle. The pigment is usually carbon black for black inks and may be organic or inorganic for coloured inks. The vehicle consists of either natural resins or synthetic polymers, dispersed in oils or dissolved in solvents, and contains a small quantity of additives to impart desired functional properties. …

These products are generally in the form of liquids or pastes, but they are also included in this heading when concentrated or solid (i.e., powders, tablets, sticks, etc.) to be used as inks after simple dilution or dispersion.

Additionally, the Court of International Trade stated that inks contain colorants, binders and solvents. See BASF Wyandotte Corp. v. United States, 11 C.I.T. 652, 656 F. Supp. 1477, 1480 (1987), aff’d 855 F.2d 852 (CAFC 1988) (hereinafer BASF), citing Corporation Sublistatica, SA v. United States, 1 C.I.T. 120, 511 F. Supp. 805 (1981) (hereinafter Sublistatica). In Sublistatica, decided under the HTSUS predecessor, the Tariff Schedules of the United States (TSUS), the court addressed the classification of an ink product in powder form that was used in gravure printing. The court described that, “after the importation…of the powder…ethanol is added thereto causing the powder to liquefy. This substance is thereupon used [in a printing press]…." Sublistatica, 1 CIT at 122. That is, the powder required simple dilution by ethanol to be a finished ink. Thus, the court found it was more advanced than a dye. However, the court concluded that finished inks required solvent, and therefore held the product was not classifiable as finished ink. See id. at 124. It also could not be classified as unfinished ink in the ink provision because there was a provision for ink powder in the TSUS. General Interpretative Rule 10(h) required that it be classified as ink powder. See id.

The BASF decision also involved inks versus dyes. In BASF, the products at issue, called Baxifans, were used in the textile industry for print transfer paper that is later used to color textiles by a heat transfer process. The court was persuaded by expert testimony that the products at issue contained sufficient amounts of the necessary components specific to this type of product other than requisite water to make it press-ready. See 11 C.I.T. at 655-56. Testimony indicated that for ordinary printing purposes, water need only be added by the "simple process of stirring or shaking." Id. at 1481. As in Sublistatica, evidence supported that the product was more advanced than a dispersed dye. Thus, relying on Sublistatica, the BASF court held that Baxifans could not be classified as dyes. The court concluded that while the product “did not easily fit into ordinary notions of either dyes or inks, the testimony clearly establishes that [it] fit the relevant industry definition and performed as ink.” 11 C.I.T. at 656. While prior TSUS cases may be instructive in interpreting identical language in the HTSUS, they are not dispositive. H.R. Conf. Rep. No. 100-576, at 549-50 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1582-83. As explained in the House Conference Report accompanying the Omnibus Trade and Competitiveness Act of 1988, which enacted the HTSUS: In light of the significant number and nature of changes in nomenclature from the TSUS to the HTSUS, decisions by the Customs Service and the courts interpreting the nomenclature under the TSUS are not to be deemed dispositive in interpreting the HTSUS. Nevertheless, on a case-by-case basis prior decisions should be considered instructive in interpreting the HTSUS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. The TSUS provisions at issue in Subslistatica and BASF are not identical to those in the HTSUS. For example, ink powder is now subsumed into heading 3215, HTSUS. In addition, the court concluded that the products in both cases were not classifiable in the dye provision because they were more advanced than disperse dyes, but heading 3204, HTSUS, clearly covers products more advanced than disperse dyes, as it specifically provides for preparations based on disperse dyes. Moreover, the court decisions relied heavily on facts adduced at trial. As such, these decisions are instructive, but not dispositive. While these cases provide guidance regarding the main components of ink, the mere presence of some colorant, binder and solvent is not sufficient to demonstrate that a preparation is a printing ink. It is also clear from EN 32.15 and from industry sources that inks do not contain only these three ingredients. Therefore, your reliance on the Sublistatica and BASF decisions for the proposition that products lacking solvent are classified in heading 3215, HTSUS, is misplaced. Further, while the CIT has maintained that goods of heading 3215, HTSUS, contain certain ingredients, it has also held that goods classified in heading 3204, HTSUS, may contain several ingredients in addition to dispersed dyes or pigments. In Ciba-Geigy Corporation v. United States, 178 F. Supp. 2d 1336 (CIT 2001), the court supported a broad interpretation of the HTSUS Chemical Appendix to include preparations based on coloring matter, thus upholding Customs classification of Irgalite® preparations in heading 3204, HTSUS. We also note that although the terms "colorant," "binder" and "solvent" may be ambiguous. Colorant, for example, usually refers to the portion of finished ink that imparts the color, but it may sometimes refer complete inks or paints. See, e.g., National Paint and Coatings Association website, www.paint.org/ind_info/terms. htm; Paintideas.com,http://www.paintideas.com/glossary. asp?wordid=384; and The American Heritage Dictionary of the English Language (Fourth Edition, 2000). Therefore, the scope of headings 3204 and 3215, HTSUS, cannot be interpreted solely on the basis of the court's decisions. It is for these reasons we believe the two headings before us are complementary, and must be read in pari materia. The plain language of Note 3 to Chapter 32, HTSUS, provides that preparations of heading 3204, HTSUS, are "of a kind …used as ingredients in the manufacture of coloring preparations." The Note is specific and inclusive of all preparations that are ingredients. On the other hand, the description of printing ink found in EN 32.15 includes the additives which "impart desired functional properties," denoting that printing ink is complete product, as these properties are not present in, for example, a flush. See FACTS section, supra. Therefore, the scope of heading 3215, HTSUS, necessarily covers "coloring preparations" which are complete (press-ready) or those that “when concentrated or solid… [are] to be used as inks after simple dilution or dispersion.” EN 32.15. Thus, heading 3204, HTSUS, covers preparations which are not as advanced as those of heading 3215, HTSUS.

Consistent with this interpretation, as well as with the relevant notes and case law, Customs has classified color preparations used as ingredients in various ink applications, many of which contain ingredients other than just the chemical color compound, in heading 3204, HTSUS. See HQ 953655, dated March 3, 1995; HQ 956158, dated July 27, 1995; HQ 956976, dated March 7, 1995; HQ 965614, dated September 30, 2002; HQ 965615, dated September 30, 2002; NY I86471, dated February 14, 2003; and HQ 966063, dated June 4, 2003. Specifically, in NY I86471 we classified products described as "flushed colors" in heading 3204, HTSUS. These products are based on synthetic organic coloring matter imported for resale to manufacturers of printing inks or to printers who manufacture their own inks. They are intended for use in heat-set, sheet-fed and letterpress printing applications. The Customs Laboratory analyzed samples of these flushes and determined a flush is a preparation based on synthetic organic coloring material.

Our position is also supported by the ink industry, whose representatives describe flushes as being used in the “manufacture” or “engineering” of ink. Comments received in favor of the proposed action from organizations that represent a large majority of the printing ink industry, such as NAPIM and the Color Pigments Manufacturer's Association (CPMA), as well as individual ink and color manufacturers, provided descriptions of printing ink and flushes that demonstrate that flushes are ingredients used in ink production, but are not printing ink. NAPIM stated that converting flush to ink requires the addition of chemical materials some of which may already be in the flush, but stressed that it is the ratio of the ingredients that creates the specific physical properties necessary for printing ink. These properties are not present in flushes. In addition to its comments, Sun Chemical's website explains that the conversion requires ingredients to be added at specific temperatures to create specific properties before enduring additional filtration and other processes. This distinction between flushes and ink is further supported by the published testimonies made before the USITC by the President and CEO of Micro Inks and a Hindustan Inks and Resins, Ltd. board member who both refer to them as separate products. See FACTS, supra.

Based on the plain language of Note 3 to Chapter 32, HTSUS, the guidance from the relevant case law and commercial reality, including input from members of the ink industry, Customs concludes that a flush is akin to the colorant portion of ink. As such, flushes are not printing inks, they are ingredients, and therefore fall within the scope of a preparation of heading 3204, HTSUS. As the description of “Blue Flush” is similar in composition to those flushes classified in NY I86471, and it is used in the same manner as other flushes in manufacture of heat-set and sheet-fed printing ink, it is likewise an ingredient and is not classified as a printing ink. As with other flushes, it is classified in heading 3204, HTSUS. You contend, as an alternative to classification in heading 3215, HTSUS, according to GRI 1, that “Blue Flush” is an unfinished ink, classified in heading 3215, HTSUS, according to GRI 2(a). You provide lexicographic definitions of ink to support the contention that "Blue Flush" satisfies the common and commercial meaning of ink, notwithstanding that some in the trade do not refer to it as ink. You also claim that because heading 3204, HTSUS, is a principal use provision, classification in that heading is limited to use as "coloring matter," or that which imparts color. Since you state that "Blue Flush" does not impart color to another product, but is itself a color product, you claim it is outside the scope of heading 3204, HTSUS. GRI 2(a) provides in part for an incomplete or unfinished good to be classified as the good itself if it imparts the essential character of the complete good. As discussed above, flushes are covered by heading 3204, HTSUS. A product that is fully described in one heading at GRI 1 is not classified in another heading as an unfinished good. The product at issue in Sublistatica was not classified as unfinished ink because a provision existed at that time that completely covered the product (i.e., ink powder; see 511 F. Supp. at 808-9), just as heading 3204, HTSUS covers the instant product. In fact, if Customs had before it today the product at issue in Sublistatica, we would still classify it according to GRI 1, not GRI 2(a), because ink powder now falls within the scope of heading 3215, HTSUS. See EN 32.15. As we stated in HQ 966063, “it would be counterintuitive to classify an ingredient used to make a preparation of 3215, HTSUS (specifically provided for in the legal note), as a preparation of heading 3215, HTSUS.” Accordingly, GRI 2(a) does not apply.

Comments submitted in opposition to the proposed action asserted that Customs analysis in HQ 966063 is flawed because the ink jet preparations (classified therein) need not be limited to a specific ink jet application to be classified as printing ink. In HQ 966063 we went to great lengths to show that different ink-jet applications required substantially different types of ingredients. As stated above, ingredients fall to be classified outside of heading 3215, HTSUS. Since the colorants that were before us could be used in several ink-jet applications, we could not identify with certainty that the products were anything more than ingredients. We believe that the commentors misinterpreted the context of this statement to constitute a requirement of dedicated use. On the contrary, we simply must be able to identify with certainty a product is a printing ink and not merely an ingredient in printing ink.

For the foregoing reasons, we find NY F83432 to be in error. “Blue Flush” is described by Note 3 to Chapter 32, and is classified at GRI 1 in heading 3204, HTSUS.

We further note the procedures set forth in 19 U.S.C. §516 and 19 C.F.R. §175, regarding petitions by "domestic interested parties," are not at issue here. Customs awareness of a possible inconsistency in the rulings on flushed pigments was not raised in a petition by a domestic interested party. Customs received a request under 19 C.F.R. §177.9(c) for information as to whether a previously issued ruling letter has been modified or revoked. Based on our review of the rulings pursuant to that request, Customs determined that an action to revoke NY F83432 in accordance with 19 U.S.C. 1625(c) was appropriate.

HOLDING:

“Blue Flush” is classified in subheading 3204.17.90, HTSUS, which provides for, “Synthetic organic coloring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic coloring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined: Synthetic organic coloring matter and preparations based thereon as specified in note 3 to this chapter: Pigments and preparations based thereon: Other: Other.” EFFECT ON OTHER RULINGS:

NY F83432, dated March 27, 2000, is hereby REVOKED. In accordance with 19 U.S.C 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.


Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division