CLA-2 CO:R:C:F 088342
Steven H. Becker, Esq.
Coudert Brothers
200 Park Ave
New York, N.Y. 10166
RE: Classification of High Aromatic Content Motor Fuel
Dear Mr. Becker:
Your letter of November 19, 1990, concerns the
classification under the Harmonized Tariff Schedules of the
United States (HTSUS) of a motor fuel in which the weight of
the aromatic constituents exceeds that of the nonaromatic.
FACTS:
You state that Vitol S.A., Inc., intends to import motor
fuel having aromatic constituent content which exceeds the weight
of the nonaromatic. Some shipments, it is stated, will contain
predominantly aromatic constituents obtained solely as a result
of the production at the refinery of a predominantly aromatic
gasoline. Other shipments will be of a gasoline which have
aromatic constituents added in the blending operation.
ISSUE:
Classification of a motor fuel which has a high aromatic
content, in the light of Note 2, Chapter 27, HTSUS.
LAW AND ANALYSIS:
It is acknowledged that the products meet the commercial
definition for motor fuel. However, it is contended that since
Note 2, Chapter 27, HTSUS, limits the aromatic content petroleum
oils may contain, this type of gasoline is not classifiable as a
motor fuel because of its high aromatic content, but rather as an
aromatic mixture in heading 2707, HTSUS. It is further contended
that this view is supported by the Explanatory Notes for heading
2710, where it states that petroleum oils consist predominantly
of non-aromatic hydrocarbons.
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Furthermore, this view is supported, it is claimed, by
two New York rulings--NYL 829932 (May 20, 1988) and NYL 831879
(October 11, 1988). In the former, it was concluded that the
weight of the aromatics in the platformate and the heavy aromatic
constituents exceeds the weight of the nonaromatic constituents.
Classification was stated to be in heading 2707.50.000, HTSUS, or
2707.99.5000, HTSUS, depending percentage of distillation. In
the second case, which dealt with the classification of a C-9
resin oil feed stock in view of the weight of the aromatic
constituents, the product was said to be classifiable in
2707.50.000, HTSUS. Both of these decisions, of course, were
issued before the HTSUS went into effect and reflect Customs
opinion at the time. Shortly after the HTSUS became law,
Customs had the opportunity to examine this issue, and, as a
result, set forth in Internal Advice 49/90 its present position
on the classification of motor fuel and motor fuel blendstock;
this decision had the effect of reversing NYL 829932. Since it
was not clear that the other ruling involved a blendstock, its
status would not necessarily be changed.
As you note, note 2, Chapter 27, HTSUS, states that
"petroleum oils and oils obtained from bituminous minerals"
include not only petroleum oils and oils obtained from bituminous
minerals, but also similar oils, as well as those consisting
mainly of mixed unsaturated hydrocarbons, obtained by any
process, provided that the weight of the nonaromatic constituents
exceeds that of the aromatic constituents."
It is your opinion that the language of this note, along
with the interpretive views expressed in the Explanatory Notes
to Chapter 27, mandates that a petroeum product containing a
predominance of aromatic constituents must be classified in
heading 2707.
We disagree. The Explanatory Notes divide heading 2710 into
three sections: (A) which includes not only crudes but also the
distilled products such as petroleum spirits, kerosene, gas oils,
lubricating oils, etc.; (B) Similar Oils, examples of which are
given as mixed alkylbenzenes (mixtures of unsaturated
hydrocarbons and saturated acyclic hydrocarbons); and (C) the
oils described in (A) and (B) to which various substances have
been added to render them suitable for for particular uses,
provided that the products contain 70% or more of petroleum oils
as a basis.
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Gasoline is a petroleum preparation described in (C),
containing by weight more than 70% or more of "petroleum oils"
(the basic constituents of the preparation); it is a preparation
to which a mixed blend of aromatics have been added, regardless
of amount, (as well as other additives) to make the finished
gasoline. Furthermore, it cannot be ignored that regardless
of what might have been the drafters' intention in the chapter
note, the language fails as a matter of grammatical construction
to establish that the limitation does, in fact, apply to
petroleum oils; rather it is concluded that the limitation
modifies only the nearest antecedent: "similar oils". Where the
arrangement and punctuation of a paragraph give rise to
conflicting constructions, one of which leads to an absurdity,
the other will be adopted. International Forwarding Co. v.
United States, 12 Cust. Ct. Appls. 539, T.D. 43264 (1929).
We are of the opinion that Congress had no intention of making
what is becoming the bulk of the motor fuel imports duty free,
and to so conclude, we feel, would be an absurd result.
HOLDING:
Gasoline which meets the requisite specifications for motor
fuel, following U.S. Note 3, Chapter 27, HTSUS, is classifiable
in Subheading 2710.00.15, HTSUS, regardless of aromatic content.
Sincerely,
John Durant, Director
Commercial Rulings Division
cc CIE N.Y.
hurley library/peh
088342