CLA-2 CO:R:C:T 087058 KWM
Mr. David O. Elliott
Barnes, Richardson & Colburn
475 Park Avenue South
New York, New York 10016
RE: Reconsideration of Headquarters Ruling Letter 082675;
Affirmed; Sausage casings; Fibrous sausage casings;
Cellulosic plastic; Tubes, pipes, hoses and fittings;
Artificial guts; Paper; Articles of paper.
Dear Mr. Elliott:
This letter is in response to your request that we
reconsider our decision in Headquarters Ruling Letter (HRL)
082675. After careful consideration, we find that HRL 082675
should not be revoked or modified.
FACTS:
History
By letter dated August 15, 1988, you requested a
classification ruling under the Harmonized Tariff Schedule of
the United States (HTSUSA) for "certain fibrous sausage
casings." Your request was made on behalf of two domestic
importers of such products, Brechteen Company (Brechteen) and
Vista International Packaging Co. (Vista). In a follow-up
letter dated November 15, 1988, you provided additional
information and samples of the merchandise. As summarized in
the November 15th correspondence, your position at that time
was that "fibrous sausage casings are properly classifiable
either under HTS 3917.10.50 or alternatively under HTS
4823.90.85." You argued several points in support of your
position, emphasizing that the essential character of the
fibrous sausage casings was imparted by the paper constituent.
In HRL 082675, dated January 6, 1989, Customs held that
the sausage casings at issue were classified in subheading
3917.10.10, HTSUSA, contrary to your position. Our ruling was
based on a finding that the essential character of the sausage
casings was imparted by the cellulosic plastics material.
On January 26, 1989, you requested reconsideration of HRL
082675, asserting several grounds for revoking that decision.
At that time Customs requested that you provide additional
information regarding the product at issue. The file was
later closed administratively, without response.
By letter dated April 20, 1990, you renewed your request
for reconsideration, providing the information request by
Customs. Another meeting was held to discuss Customs' prior
rulings.
Merchandise
Your submission of August 15, 1988, states that the
casings are made of paper, regenerated cellulose and glycerin,
in the relative quantities described in prior Customs Service
ruling letters (See, HRLs 061462 and 073604). Although a
precise description of the manufacturing process was not
provided, we presume that it is similar to those described in
prior rulings. Essentially, the process consists of creating
a viscose solution through chemical means, and then extruding
the viscose solution onto a continuous paper tube. A tube is
formed by twisting a long strip of paper fed through the
center of the extruder. The viscose coated/covered paper tube
passes through a series of acid baths wherein the cellulose
regenerates and the casing solidifies. Purifying baths remove
the acid and other materials. Lastly, the casings are bathed
in glycerin. The two principal components of the completed
casings are the paper and the regenerated cellulosic plastics.
ISSUE:
Is Headquarters Ruling Letter 082675 correct in
classifying the merchandise classified in heading 3917,
HTSUSA?
If not, how should the merchandise be classified for
tariff purposes? Specifically, is the merchandise
classifiable under heading 4823, HTSUSA?
LAW AND ANALYSIS:
Your letter of January 26, 1989, lists several reasons
you believe warrant our reconsideration of HRL 082675. Please
be assured that we have considered all arguments made in
behalf of Brechteen and Vista, in both the original and
reconsideration request. Your reasoning is twofold: First,
you argue in the August 15, 1988 letter that the TSUS-to-
HTSUSA cross reference leads to subheading 3917.10.50, HTSUSA,
based on the classification of identical merchandise under the
TSUS. The cross reference to which you refer is not a legally
binding document, nor was it intended to provide a direct
correlation between TSUS and HTSUSA headings for
classification purposes. We do not consider the cross
reference indicative of any classification under the HTSUSA.
Second, you assert that GRI 3 is applicable to this
merchandise and that the essential character of the fibrous
sausage casings is imparted by the paper component. Your
later correspondence emphasizes the essential character
analysis, and it was on that basis that we issued HRL 082675.
In your letter dated January 26, 1989, you again emphasize the
essential character analysis. Therefore, we have considered
below your assertion that the essential character of the
sausage casing is imparted by the paper component.
As you know, classification under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is made in
accordance with the General Rules of Interpretation (GRI's).
The systematic detail of the harmonized system is such that
virtually all goods are classified by application of GRI 1,
that is, according to the terms of the headings of the tariff
schedule and any relevant Section or Chapter Notes. Before we
resort to GRI 3 for the classification of this merchandise, we
must first apply GRI's 1 and 2.
Neither the importer or Customs disputes that the
regenerated cellulose material is considered a plastic under
the HTSUSA. Heading 3917, HTSUSA, provides for:
3917 Tubes, pipes and hoses and fittings therefor
(for example joints, elbows, flanges) of
plastics:
3917.10 Artificial guts (sausage casings) of
hardened protein or of cellulosic plastics
materials:
3917.10.50 Of cellulosic plastics materials:
We find no general exclusion from Chapter 39, HTSUSA, which
would apply to this product. We note, however, that legal
note 8 to chapter 39, HTSUSA, indicates that the expression
"tubes, pipes and hoses" includes "sausage casings and lay-
flat tubing."
You assert that heading 4823, HTSUSA, also provides for
this merchandise:
4823 Other paper, paperboard, cellulose wadding and
webs of cellulose fibres, cut to size or shape;
Other articles of paper pulp, paper,
paperboard, cellulose wadding or webs of
cellulose fibers.
We note that legal note 1(f) to Chapter 48 may be applicable
to the instant merchandise:
1. This Chapter does not cover:
(f) Paper-reinforced stratified sheeting of
plastics, or one layer of paper or paperboard
coated or covered with a layer of plastics, the
latter constituting more than half the total
thickness, or articles of such materials, other
than wall coverings of heading 48.14 (Chapter
39).
Emphasis added. The instant merchandise is composed of a
layer of paper coated or covered with a layer of plastics. It
would appear to fall within the exclusion of note 1(f). To
verify that conclusion, we consulted the Explanatory Notes to
the HTSUSA. The Explanatory Notes are not legally binding on
the Customs Service, but this office consults them in almost
every instance. As your submission points out, the
Explanatory Notes to Chapter 48 indicates that "sausage
casings" are included in heading 4823. We note however, that
the Chapter 48 Explanatory Note language is subject to the
note 1(f) exclusion above.
The Explanatory Notes to Chapter 39 address the
classification of articles made of plastics in combination
with other materials:
This Chapter also covers the following products,
whether they have been obtained by a single operation or
by a number of successive operations provided that they
retain the essential character of an article of plastics:
(a) Plates, sheets, etc. incorporating a reinforcement
or a supporting mesh of another material (wire,
glass,fibres, etc.) embedded in the body of the
plastics.
* * *
(c) Paper reinforced stratified plastic sheeting, and
products consisting of one layer of paper or
paperboard coated or covered with a layer of
plastics, the latter constituting more than half the
total thickness, other than wall coverings of
heading 48.14.
* * *
The provisions of the preceding paragraph also apply
mutatis mutandis, to monofilaments, rods, sticks, profile
shapes, tubes, pipes and hoses, and articles.
The above language parallels that found in legal note 1(f) to
Chapter 48, HTSUSA. These notes, taken together, indicate an
intent to classify articles (including tubes, pipes and hoses)
of plastics and other materials as articles of plastics,
provided that the plastics constituent comprises more than
half the thickness. The Customs laboratory has determined
that over half the thickness of the sample casings is that of
the cellulosic plastics material. The above notes also
indicate that the article must retain the "essential
character" of an articles of plastics. Therefore, although we
look to heading 3917 for eo nomine classification of the
sausage casings under GRI 1, essential character is a factor
for our consideration.
The basis for your reconsideration request is that the
essential character of the articles at issue are imparted by
the paper component, and that HRL 082675 failed to adequately
consider the contribution of the paper. We do not agree.
The Explanatory Notes to GRI 3(b) state that "[t]he
factor which determines essential character will vary as
between different kinds of goods." We consider each essential
character determination on it's own merits; taking into
account the varying factors which present themselves. The
Explanatory Notes further state that: "[essential character]
may, for example, be determined by the nature of the material
or component, its bulk, quantity, weight or value, or by the
role of a constituent material in relation to the use of the
goods." These factors are not all inclusive; they are
examples of types of considerations which contribute to an
essential character determination.
In this case, paper is combined with regenerated
cellulose to form the sausage casing. You argue that the
paper promotes size uniformity, a critical characteristic for
certain uses. However, similar statements could be made about
the porosity of the casing attributable to the type of viscose
present. Both of these features are noted with equal
distinction in the Vista literature you provided. You state
that the "principal strength of the casing derives from the
paper." You also admit, however, that the cellulose material
"binds and reinforces the paper." We are not comparing
fibrous casings to purely cellulosic casings; the two are
distinct products. However, in examining the respective roles
of the component materials, we do not find that the paper, by
its nature or its role in the use of the product is so
predominant as to dictate that the character of the casings is
essentially that of the paper.
Other factors which influence an essential character
determination include the cost, weight and bulk of the
constituent materials. Your letter of April 21, 1990,
includes both cost and weight breakdowns for the paper,
cellulose and glycerine components. While the paper is the
material of greatest expense, the regenerated cellulose is
higher in weight. In your letter you assert that the paper
represents the greatest bulk. Customs, through our own
laboratory tests, has determined that the cellulosic plastic
constitutes between 63 and 68 percent (%) of the sausage
casings' total thickness. Bulk is a measure of size or mass.
We are uncertain of the basis for your claim that the paper
represents the greatest bulk, since measurements of both
weight and thickness indicate to the contrary.
As noted, the holding of HRL 082675 was based on a
finding that the essential character of the sausage casings
was imparted by the paper component. We find no reason to
revoke or modify that finding. A review of the facts
indicates to us that both materials play a role in the use of
the product, and while the paper may have higher cost, the
weight and bulk of the plastics are predominant. These
factors, taken together, weigh in favor of the cellulosic
plastics component.
Combining our essential character analysis with the
language of the relevant legal and explanatory notes, we find
that the sausage casings were properly classified in
subheading 3917.10.10, HTSUSA. The essential character of the
casings, in our opinion is imparted by the plastics component.
Further, the regenerated cellulose comprises more than half of
the total thickness of the sample casings. That fact applied
to the language of the notes, mutatis mutandis, indicates an
intent to classify sausage casings such as those at issue in
subheading 3917.10.10, HTSUSA.
Other issues
Your letter of January 26, 1989, indicates that you were
unaware of a prior ruling letter, HRL 081006. That ruling
letter may be found through the Legal Precedent Retrieval
System (LPRS) under the keywords "fiber-reinforced cellulosic-
plastic sausage casing." The LPRS is available to the public
at any Customs reading room, and the ruling letter is
available upon written request.
Your January 26, 1991 letter also suggests that this
office did not accurately consider the tariff headings which
you advocated as the correct tariff classification. We regret
that the ruling letter did not present an analysis detailed to
your satisfaction. However, please be assured that all of the
information you submitted was considered. The correspondence
contained in the file indicates a refinement of the issues
from your perspective over a period of time, and our response
was directed to that issue which was considered dispositive.
HOLDING:
Headquarters Ruling Letter 082675 is affirmed. The
sausage casings at issue, described as "fibrous sausage
casings" and consisting of paper reinforced sausage casings of
regenerated cellulosic plastic are classified in subheading
3917.10.10, HTSUSA, as tubes, pipes or hoses of plastics,
including artificial guts (sausage casings) of cellulosic
plastics material. This classification is based on an
interpretation of the relevant notes and our finding that the
essential character of the casings is imparted by the
cellulosic plastics material. The duty rate applicable to
this classification is 6.6 percent ad valorem.
Sincerely,
John A. Durant, Director
Commercial Rulings Division