LIQ 4-01 RR:CR:DR 227562 CB
Port Director
U.S. Customs Service
423 Canal Street, Room 245
New Orleans, LA 70130-2341
RE: Protest and Application for Further Review No. 2002-97-100267; Classification of Pneumatic Hand Tools; 19 U.S.C. §1504(b) and (d); Deemed Liquidation; subheadings 8467.11.10 and 8467.11.50, HTSUS; HQ 226215 cited
Dear Sir/Madam:
The above-referenced protest was forwarded to this office for a determination. We have considered the points raised and a decision follows.
FACTS:
The subject protest covers twenty-seven (27) entries. The merchandise was entered between November 19, 1993 and April 10, 1996. Each entry (except entry 600-xxxx250-0) also included certain Japanese bearings subject to antidumping duties under case number A-588-201. Accordingly, liquidation of each entry was suspended. Three notices of removal of suspension under the applicable antidumping case were provided by the U.S. Commerce Department to Customs. See Customs Message 6081114, dated March 21, 1996; Message 6081116, dated March 21, 1996 and Message 6221112, dated August 8, 1996. Customs message 6081114 covered the period between May 1, 1993 and April 30, 1994. Customs message 6081116 covered the period between May 1, 1994 and April 30, 1995. Customs message 6221112 covered the period between May 1, 1995 and April 30, 1996.
As stated above, the entries were liquidated on November 8, 1996. Fifteen of these entries were covered by Customs messages 6081114 and 6081116. These entries were liquidated more than six months from the date the suspension of liquidation was lifted (March 21, 1996). The other eleven entries were liquidated within six months from the lifting of the suspension (August 8, 1996), and their liquidation is not being challenged under 19 U.S.C. §1504 as being liquidated by operation of law. It is protestant’s position that the fifteen (15) entries, made between November 19, 1993 and April 6, 1995, deemed liquidated by operation of law because liquidation occurred more than six months after the lifting of the suspension.
Additionally, protestant is challenging Customs classification of the imported merchandise covered by the other twelve (12) entries (i.e., the eleven entries that were liquidated within the 180-day period set by 19 U.S.C. §1504 and the one entry for which liquidation was extended). The merchandise under protest is pneumatic hand tools for use by repair personnel in garages, body shops, dealership service departments, and other establishments in the automotive repair aftermarket. The tools fall into seven (7) general product categories identified as air hammers, models MT1711, MT1714 and MT1715; impact wrenches, models MT1720, MT1722, MT1725, MT1751, MT1729, MT1758TH, MT1759TH, MT1731, MT1773 and MT1730; reversible, angle head and general purpose drills, models MT1727, MT1710, MT1789, and MT1785; cut-off tool, model MT1861; light, light mini, standard and heavy-duty ratchets and air ratchets, models MT1825B, MT1826, MT1825S, MT1828, MT1829, and MT1830; single body die grinder, model MT1865; and straight line and orbital sanders, models MT1768, MT1777, and MT1864.
The entries were liquidated under a provision of heading 8467, Harmonized Tariff Schedule of the United States (HTSUS), as rotary type pneumatic tools for working in the hand, suitable for metal working. Your office maintains that except for the impact wrenches, all of the pneumatic tools under protest employ a process by which the actual shape of the metal is changed, i.e., metal is “worked.” Counsel for the protestant maintains that these tools used in automotive repair applications are not “metal working” for tariff purposes and should be classified in the appropriate subheading of heading 8467 for other pneumatic tools.
The provisions under consideration are as follows:
8467 Tools for working in the hand; pneumatic, hydraulic or with self-contained nonelectric motor...:
Pneumatic:
8467.11 Rotary type (including combined rotary- percussion):
8467.11.10 Suitable for working metal
8467.11.50 Other
ISSUES:
1. Whether the fifteen entries liquidated more than six months from the date the suspension of liquidation was lifted are considered “deemed liquidated,” pursuant to 19 U.S.C. 1504(d).
2. Whether the pneumatic hand tools are “suitable for working metal” and, therefore, classifiable under subheading 8467.11.10, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the protest, with application for further review, was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. §1514 and 19 CFR Part
174) and that the decisions protested, the liquidation of the entries and classification of the merchandise, are protestable decisions (see 19 U.S.C. §1514(a)(5) and (2), respectively).
1. Deemed Liquidation
19 U.S.C. 1504(a)(1), as amended (see section 641, Public Law 103 182; 107 Stat. 2204), provides that an entry not liquidated within one year from the date of entry shall be deemed liquidated at the rate of duty, value, quantity and amount of duties asserted at the time of entry by the importer of record, unless liquidation is extended, as provided in that section, or suspended as required by statute or Court order. Under section 1504(d), “when a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry, unless liquidation is extended under subsection (b), within 6 months after receiving notice of the removal from the Department of Commerce, other agency, or a court with jurisdiction over the entry. Any entry (other than an entry with respect to which liquidation has been extended under subsection (b)) not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record.”
In HQ 226215, dated March 28, 1996, we held that section 1504(d), as amended, was applicable where liquidation of the subject entries occurs after its effective date (December 8, 1993; see section 692, Public Law 103 182). The fifteen entries under consideration were liquidated on November 8, 1996. Thus, Customs was required to liquidate the entry within 6 months after receiving the notice of removal of the suspension from Commerce, unless liquidation was extended under section 1504(b), as amended.
Section 1504(b) provides that “[t]he Secretary may extend the period in which to liquidate an entry if . . . the information needed for the proper appraisement or classification of the merchandise, or for insuring compliance with applicable law, is not available to the Customs Service.” You state that all of the entries “contained unresolved and common classification problems . . . which may have resulted in loss of revenue had liquidation taken place within the time constraints of [section] 1504(d).” However, section 1504(b) also provides that the Secretary shall provide notice of an extension to the importer of record and surety for the importer of record, and that such notice “shall be in such form and manner . . . as the Secretary shall by regulation prescribe.” That regulation, 19 CFR 159.12(b), provides that “[i]f the port director extends the time for liquidation, as provided in paragraph (a)(1) of this section, he promptly shall notify the importer or the consignee and his agent and surety on Customs Form 4333 A, appropriately modified, that the time has been extended and the reasons for doing so.” The ACS record for these entries does not show that liquidation was extended subsequent to the lifting of the suspension. Accordingly, the fifteen entries covered by Customs messages 6081114 and 6081116 which were liquidated more than six months after receiving notice of the removal of suspension from Commerce, were deemed liquidated pursuant to 19 U.S.C. 1504(d)
2. Classification
Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Counsel for the protestant cites judicial precedent for the proposition that tools which only incidentally work or otherwise affect metal do not “work” metal in a tariff sense. Lukas American, Inc. v. United States, 7 CIT 280 (1984), is a case decided under the Tariff Schedules of the United States (TSUS), the HTSUS predecessor tariff code, on emergency metal cutting apparatus for freeing victims from automobile accidents. The court held, among other things, that the term “metal working” means changing the size, form and shape of metal toward some useful end. Counsel concludes that true metal-working tools produce or finish a new metal product, and that the tools in issue here, used in automobile repair or service applications to replace a damaged or worn muffler, quarter panel, or similar body part, are not used to make or finish automobiles or their parts; thus, they do not “work” metal for tariff purposes. We agree that the TSUS provisions in Lukas are substantially similar to the HTSUS provisions here, so that, while not dispositive, judicial decisions under the TSUS may be instructive in classification cases under the HTSUS, assuming they are applicable.
Relevant heading 8467 ENs are not instructive as to the meaning of the term “metal working.” However, the ENs for heading 8462, machine-tools for working metal, at p. 1383, distinguish machine-tools of that heading from the hand tools of heading 8205 and from the tools for working in the hand of heading 8467 by how and where they are mounted. Thus, read in pari materia, the heading 8462 ENs are instructive as to the meaning of the term “metal-working” for purposes of heading 8467. But, the heading 8467 ENs only state that machine-tools of that heading “work by changing the shape or form” of metal or metal carbides. These ENs do not restrict or limit such tools to any particular service application.
While not dispositive as to classification under the HTSUS, protestant’s product literature has certain probative value as to how it views the merchandise. See THK America, Inc. v. United States, 17 CIT 1169 (1993). Submitted literature states that the air hammers “Handle a wide range of applications. Ideal for virtually all body work.” The drills are described as “Perfect for hole sawing cylinder honing, valve guide reaming and knurling, and drilling of frames and trailer bodies.” The cut-off tool is described, in part, as “...useful for quickly grinding down burrs and rough edges.” The die grinders are described as “versatile tools for tire scuffing, light weld grinding work and general purpose applications.” Finally, the sanders “provide maximum performance for paint and rust removal, body filler shaping, weld smoothing, as well as numerous other service applications.”
Subheading 8467.11.10 describes rotary pneumatic tools for working in the hand that are suitable for metal working. An article is “suitable” for a particular use if it is actually, practically and commercially fit for such use. Evidence of sole use or even principal use is not required. There must, however, be evidence of substantial actual use in the particular application described.
Assuming for purposes of argument that the pneumatic tools in issue do not work metal in a tariff sense when used in automotive repair applications which only incidentally work metal, the available information compels the conclusion that their wide range of uses, as illustrated by protestant’s own literature, makes them “suitable” for working metal. This conclusion is not inconsistent either with Lukas, supra, or the referenced ENs.
HOLDING:
The protest should be ALLOWED in part and DENIED in part. The fifteen entries made between November 19, 1993 and April 6, 1995, and covered by Customs messages 6081114 and 6081116, deemed liquidated by operation of law. Thus, the protest should be granted with respect to entries.
Regarding the other twelve entries, under the authority of GRI 1, the listed models of the air hammers, drills, cut-off tool, die grinder, and orbital sanders are provided for in heading 8467. They are classifiable in subheading 8467.11.10, HTSUS, as rotary type, pneumatic tools for working in the hand, suitable for metal working. As to the classification of these tools, the protest should be DENIED.
Neither the impact wrenches, which tighten and loosen bolts, nuts, screws and other threaded fasteners, nor the air ratchets, which grip the article to be turned, “work” metal. They are nonetheless pneumatic hand tools of heading 8467. They are classifiable in subheading 8467.11.50, HTSUS, as other rotary type, pneumatic tools for working in the hand. The impact wrenches and air ratchets should be reclassified as indicated, and the protest ALLOWED as to these articles.
The light, mini, standard and heavy-duty ratchets are not pneumatic tools for tariff purposes. They function as socket wrenches of the type described in heading 8204. Actual classification of these ratchets is in subheading 8204.20.00, HTSUS, socket wrenches, with or without handles, drives and extensions, and parts thereof. Since the rate of duty under this provision for each of the years in question is more than the liquidated rate, the protest should be DENIED as to these articles. If summons is filed, a counterclaim under 28 U.S.C. §1553 should be filed.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John A. Durant, Director
Commercial Rulings Division