CLA-2 RR:CR:GC 959762 EAB
Port Director
U.S. Customs Service
127 N. Water Street
Ogdensburg, New York 13669
Re: Protest 0712-96-100713; Pergopak® M3, urea formaldehyde resin
Dear Port Director:
This is our decision on protest 0712-96-100713, timely filed June 27, 1996, against your decision in the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of merchandise entered March 5 & 6, 1996.
FACTS:
Pergopak® M3, a urea formaldehyde resin in powder form, was entered in subheading 3909.10.1000, HTSUSA, the provision for amino-resins, phenolic resins and polyurethanes, in primary forms; urea resins/thiourea resins, dutiable at the column 1 General rate of 6.7 percent ad valorem.
The manufacturer identifies the product as white pigment for the paper and board industry and for the paint and varnish industry. Used in the production process, the finished product will exhibit “higher opacity, enhanced whiteness, a more homogenous structure, improved printability, less two-sidedness, increased bulk value and possible grammage reduction” to levels and degrees unattainable without Pergopak® M3.
Customs liquidated the entries in subheading 3204.17.6085, HTSUSA (1996), the provision for synthetic organic coloring matter and preparations based thereon as specified in note 3 to the chapter; pigments and preparations based thereon; other; other, bearing duty at the column 1 General rate of 13.3 percent ad valorem.
ISSUE:
Whether a plastic in primary form is classifiable as such in chapter 39, HTSUSA, or in chapter 32 thereof as a synthetic organic coloring pigment or preparation based thereon.
LAW AND ANALYSIS:
Merchandise imported into the U.S. is classified under the HTSUSA. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order.
The Explanatory Notes to the Harmonized Commodity Description and Coding System (Explanatory Notes or ENs), including the Subheading Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading and certain subheadings of the HTSUSA, and are generally indicative of the proper interpretation of such headings and subheadings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
According to the express terms of heading 3204 and the relevant legal notes of chapter 32, HTSUSA, commodities described by the heading include synthetic organic coloring matter, whether or not chemically defined; mixtures of stabilized diazonium salts and couplers for the production of azo dyes; preparations based on coloring matter, of a kind used for coloring any material or used as ingredients in the manufacture of coloring preparations. No less than fifteen types of synthetic organic coloring matter classifiable under heading 3204 are set forth in EN 32.04; amino-resins are not one of them. We find, therefore, that urea-formaldehyde resin is not a synthetic organic coloring matter of heading 3204.
Hawley’s Condensed Chemical Dictionary, 12th Ed., Van Nostrand Reinhold Company, at 1204, states the following on urea-formaldehyde resin:
An important class of amino resin. Urea and formaldehyde are united . . . to produce molding powders. These are converted to thermosetting resins . . . . These were the first plastics that could be made into white, pastel, and colored products.
Use: Scale housings, dinnerware, interior plywood, foundry core binder, flexible foams, insulation.
Thus, the principal use of urea-formaldehyde resin appears to be other than as a pigment or as an ingredient in the manufacture of pigment preparations. According to the manufacturer of Pergopak® M3, the product is not used to impart color, but as an opacifier to enhance the matting or delustering effect of the paints and clear varnishes to which it is added. We note at this point that the manufacturer has been forthcoming in identifying modified Pergopak® products that are actually used as a pigment in the paper industry, but this particular Pergopak® M3 urea-formaldehyde resin is not modified for such actual use. Furthermore, the scope of heading 3204 is limited with respect to considerations of the use of the product. EN 32.04 provides in part that “Substances which in practice are not used for their dyeing properties are excluded.”
We find that Pergopak® M3 is properly classifiable as a plastic in primary form, specifically, of heading 3909, HTSUSA.
HOLDING:
The protest should be ALLOWED.
Pergopak® M3, a urea-formaldehyde resin in powder form, is properly classifiable in subheading 3909.10.0000, HTSUSA, the provision for amino-resins in primary forms, urea resins or thiourea resins.
Merchandise entered in the foregoing subheading in 1996 was dutiable at the column 1 General rate of 6.7 percent ad valorem.
In accordance with § 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 this decision must be accomplished prior to mailing this decision to the protestant.
Sixty days from the date of this 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, pursuant to the Freedom of Information Act, and other methods of public distribution.
Sincerely,
[Marvin M. Amernick, for]
John A. Durant, Director
Commercial Rulings Division