CLA-2 OT:RR:CTF:TCM H102847 JER/JPJ
Ms. Joyce Ray
Norman G. Jensen, Inc.; UPS Brokers of Choice
P.O. Box 164
Sweetgrass, MT 59484
RE: Revocation of New York Ruling Letter C83105; Classification of a Tube Charge Holder
Dear Ms. Ray:
On January 16, 1998, U.S. Customs and Border Protection (“CBP”) issued New York Ruling Letter (“NY”) C83105 to you on behalf of Lasertech, classifying a tube charge holder under heading 9305 of the Harmonized Tariff Schedule of the United States (“HTSUS”). CBP has recently received additional information regarding perforating guns assemblies. Accordingly, we have reviewed NY C83105 and found it to be incorrect for the reasons set forth below.
On May 16, 2012, pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI, notice of the proposed action was published in the Customs Bulletin, Vol. 46, No. 21. One comment was received in support of the notice. However, the commenter suggests that while heading 7326 may indeed be the most appropriate heading, headings 7304, 7305 and 7306 should also be given consideration. The suggested headings are discussed in the Law and Analysis Section herein.
FACTS:
The subject merchandise, referred to as a “tube charge holder”, was described in NY C83105 as follows:
The imported article consists of a tube-like device called a charge holder which is a specialized component of a perforating gun. The charge holder is basically a long tube, up to 20 feet in length, with holes cut out of it. The design of the tube and the placement of the holes are made to exact specifications. The tube charge holder
is fitted with directional, sealed, powdered charges and then combined with a perforating gun. The perforating gun is placed in an oil well and detonated, blowing holes in the casing and rock strata.
According to our research, a perforating gun assembly is a single-use device “used to perforate existing oil and gas wells in preparation for production. Containing several shaped explosive charges, perforating guns are available in a range of sizes and configurations. The diameter of the gun used is typically determined by the presence of wellbore restrictions or limitations imposed by the surface equipment.” Perforating guns are lowered into the well hole to a desired depth and fired by the detonation of explosive charges which are set inside the tube charge holder. The charges are fired through the perforating holes thus perforating the oil well casing and rock strata in several directions. The device at issue is not imported with a detonator.
ISSUE:
Whether the subject tube charge holder is classified (1) under headings 7304, 7305, or 7306, HTSUS, as tubes, pipes and hollow profiles, other tubes and pipes, or other tubes, pipes and hollow profiles, (2) under heading 7326, HTSUS, as an other article of iron or steel, or (3) under heading 9303, HTSUS, as a firearm or similar device which operates by the firing of an explosive charge, or under heading 9305, HTSUS, as a part or accessory of articles of headings 9301 to 9304, HTSUS.
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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
7304 Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel.
7305 Other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross-sections, the external diameter of which exceeds 406.4 mm, of iron or steel.
7306 Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel.
7326 Other articles of iron or steel:
9303 Other firearms and similar devices which operate by the firing of an explosive charge (for example, sporting shot-guns and rifles, muzzle-loading firearms, Very pistols and other devices designed to project only signal flares, pistols and revolvers for firing blank ammunition, captive-bolt humane killers, line-throwing guns):
9305 Parts and accessories of headings 9301 to 9304:
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The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 73.04 provides, in pertinent part, that:
The heading excludes:
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(f) Tubes, pipes and hollow profiles made up into specific identifiable articles. . .
EN 73.05 provides, in pertinent part, that:
The heading does not cover:
* * *
Tubes or pipes made up into specific identifiable articles.
EN 73.06 provides, in pertinent part, that:
The heading excludes:
* * *
(f) Tubes, pipes and hollow profiles made up into specific identifiable articles. . .
EN 93.03, HTSUS, provides in pertinent part, that:
This heading includes all firearms not covered by headings 93.01 and 93.02; it includes some devices which are not weapons but which operate by the firing of an explosive charge.
* * *
In order to classify the subject merchandise under heading 9303, HTSUS, it must be a firearm or ejusdem generis, (of the same class or kind) with those devices enumerated in the heading. The Court has held that, “As applicable to classification cases, ejusdem generis requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms.” Nissho-Iwai American Corp. v. United States (Nissho), 10 Court of Int’l Trade 154, 157 (1986). The exemplars named in heading 9303, HTSUS, share several characteristics which include: multiple usage, operating by the firing of an explosive charge activated by an internal triggering mechanism which sends a projectile through a barrel, and being hand-held.
A “firearm” is defined as “a weapon from which a shot is discharged.” Merriam-Webster’s Collegiate Dictionary, 10th ed., 437 (2001). It is also defined as being “a weapon, especially a pistol or rifle, capable of firing a projectile and using an explosive charge as a propellant.” www.thefreedictionary.com/firearm. Further, a weapon is defined as “an instrument of attack or defense in combat, as a gun, missile or sword. The American Heritage Dictionary of the English Language, 3rd ed., 100, 222 (1992).
The subject charge holder (perforating device) consists of one long tube-like device with multiple perforations along its length from which multiple explosive charges exit in multiple directions. Further, the tube itself is not the explosive device. Therefore, under the canon of construction known as ejusdem generis, the subject perforation device can not be said to be similar in function, essential character or purpose to the enumerated examples of heading 9303, HTSUS. Moreover, the subject merchandise is used in connection with oil drilling and production rather than as a weapon. Accordingly, it is not described by the term “firearm.” Based on the foregoing, the subject charge holder cannot be classified in heading 9303, HTSUS, because it is not described by the heading.
A part is either (1) an integral, constituent, or component part, without which the
article to which it is to be joined, could not function as such article, or (2) dedicated solely for use with an article. [internal quotation marks omitted]. ABB, Inc. v. United States, 28 Ct of Int’l Trade 1444, 1452; 346 F. Supp. 2d 1357, 1364; 26 Int'l Trade Rep. (BNA) 2327 (2004), citing Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997). Based on the aforementioned analysis and description of the subject merchandise, we find that the subject charge holder is not designed to be a part of any of the articles of heading 9303, HTSUS and is therefore not classifiable in heading 9305, HTSUS, as a “part” of a firearm or similar devices of heading 9303, HTSUS.
The subject perforating gun is not classifiable in headings 7304, 7305, or 7306, HTSUS. The commenter states that, based on the description of the subject merchandise, in relevant part, as a “long tube” with “holes cut out of it”, the product may be “drilled” pipe. The commenter cites HQ 951010, dated May 7, 1992, to argue that CBP has classified “drilled” pipe in heading 7304, HTSUS. However, the merchandise in HQ 951010 was described as “hot finished seamless steel tubes”. The protestant argued that the merchandise was “truck parts”. The ruling found that the merchandise was not “something other than heading 7304, tubes or pipes or that they are made up into specific identifiable articles which would be excluded from heading 7304”. Although the subject perforating gun may be tube-like in form, it is not ordinary tube or pipe. It is advanced beyond the ordinary tube or pipe stage, and made up into a specific identifiable article. The ENs for headings 7304, 7305, and 7306, HTSUS, specifically exclude tubes, pipes and hollow profiles made into specific identifiable articles.
The subject merchandise is a hollow tube-like container which relies on a detonator and other articles in order to function. We find that the subject charge holder is properly classified in heading 7326, HTSUS, as an article of steel because it is not specifically provided for elsewhere in the HTSUS. .
HOLDING:
By application of GRI 1, the subject charge holder used with perforating gun assemblies is classified under heading 7326, HTSUS. It is specifically classified in subheading 7326.90.85, HTSUS, which provides for: “Other articles of iron or steel: Other: Other.” The 2012 column one, general rate of duty is 2.9% ad valorem.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY C83105, dated January 16, 1998, 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 and Trade Facilitation Division