CLA-2 CO:R:C:M 087557 DWS
Mr. Gerald B. Horn
Soller, Shayne & Horn
46 Trinity Place
New York, NY 10006
RE: Paper Calendering Machines, On-Line and Off-Line;
Reconsideration of NY 843361; NY 065477; NY 833074
Dear Mr. Horn:
As requested by your letter of February 12, 1990, to Ms.
Jean F. McGuire, Area Director of the New York Seaport, we have
reconsidered NY 843361, dated July 27, 1989, concerning the
classification of on-line and off-line paper calendering machines
under the Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
The subject merchandise consists of both on-line and off-
line calendering machines, used in the paper making process.
Calenders finish paper products and give them the ability to
absorb ink better. They also can give the paper product a glossy
or textured look. The on-line calendering machines are connected
to paper making machines so that, to be finished, the paper
product moves directly from the previous section of the paper
making machine into the calender. Off-line calendering machines
stand away from the paper making machine. The paper product must
be wound onto a roll at the end of the paper making machine and
then moved to the off-line calendering machine. The paper
product must be unwound and run through the calendering machine,
then rewound into a roll off the machine. There are several
reasons why an off-line calendering machine would be preferred,
such as available floor space, efficiency of the paper machine,
preference of an individual paper maker, and technical
suitability.
ISSUE:
What is the proper classification of the subject on-line and
off-line calendering machines under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1 provides that classification is determined
according to the terms of the headings and any relative section
or chapter notes.
NY 843361 held the on-line calendering machines to be
classifiable under subheading 8420.10.20, HTSUS, which provides
for: "[c]alendering or similar rolling machines for making paper
pulp, paper or paperboard." However, the off-line calendering
machines were held to be classifiable under subheading
8420.10.90, HTSUS, which provides for: "[c]alendering or other
rolling machines: [o]ther: [o]ther." You claim that the on-line
and off-line machines are, for practical purposes, the same
machine and, therefore, both should be classifiable under
subheading 8420.10.20, HTSUS. We do not agree.
Under the Tariff Schedules of the United States (TSUS), on-
line and off-line calendering machines were classified under
different provisions because on-line calendering machines were
determined to be a direct part of the paper making process. Off-
line calendering machines were considered to be part of the paper
finishing process. See NY 065477, dated January 13, 1982. Your
argument is that, due to the application of modern technology,
there is no reason for the two machines to be classified
separately.
We do not doubt your claims that all calendering machines
have things in common. Indeed, at the six-digit international
level under the HTSUS, there is no distinction made between
different types of calendering machines. However, it is our
position that, although on-line and off-line machines operate and
finish paper similarly, there are still differences that preclude
their classification under one tariff provision.
Off-line calendering machines require components for
unwinding and rewinding paper rolls that on-line calendering
machines do not. With an on-line machine, as noted, the paper
product moves directly from the previous section of the paper
making machine into the calender to be finished. With an off-
line calendering machine, the paper product must be wound onto a
spool at the end of the paper making machine and then moved to
the calender. It is a wholly separate operation. Also, an off-
line machine cannot be interchanged with an on-line machine
within a paper making machine.
It is true that, as you claim, the basic components of off-
line and on-line machines are the same. However, it is also true
that off-line machines can be configured to meet an individual
manufacturer's specifications. Factors involved in these
specifications could include those already noted: available floor
space, efficiency of the paper machine, preference of an
individual paper maker, and technical suitability. Therefore, it
is not true that off-line machines are identical to on-line
machines.
Under the HTSUS, on-line and off-line paper coating
machines have been similarly distinguished for tariff
classification purposes. In NY 833074, dated November 17, 1988,
it was ruled that on-line paper coating machines are classifiable
under subheading 8439.99.10, HTSUS, which provides for:
"[p]arts: [o]ther: [o]f machinery for making paper or
paperboard." Independent, off-line paper coating machines are
classifiable under subheading 8439.30.00, HTSUS, which provides
for: "[m]achinery for finishing paper or paperboard." It is our
position that this distinction for on-line and off-line paper
coating machines under the HTSUS equally applies to on-line and
off-line paper calendering machines.
HOLDING:
The subject on-line paper calendering machines are
classifiable under subheading 8420.10.20, HTSUS, which provides
for: "[c]alendering or similar rolling machines for making paper
pulp, paper or paperboard." The subject off-line calendering
machines are classifiable under subheading 8420.10.90, HTSUS,
which provides for: "[c]alendering or other rolling machines:
[o]ther: [o]ther." NY 843361 is affirmed in full.
Sincerely,
John Durant, Director
Commercial Rulings Division