CLA-2 RR:CR:GC 965894 AML
Mr. Lars-Erik Hjelm
Mr. Bernd G. Janzen
Akin, Gump, Strauss, Hauer & Feld LLP
Robert S. Strauss Building
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036-1564
RE: Reconsideration of NY I83432; laminated lumber veneer press line
Dear Messrs. Hjelm and Janzen:
The following is our decision regarding your request, dated September 10, 2002, on behalf of Boise Cascade Corporation, for reconsideration of New York Ruling Letter (“NY”) I83432, dated July 31, 2002. In NY I83432, we classified a series of machines comprising a laminated veneer lumber press line under subheading 8465.94.0035, Harmonized Tariff Schedule of the United States (HTSUS), which provides for machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: other: bending or assembling machines. Technical literature was provided for our consideration. In preparing this ruling, consideration was given to arguments presented by counsel for the protestant in a meeting held on November 21, 2002 as well as those made in a supplemental submission dated November 29, 2002.
FACTS:
The articles were described in NY I83432, and Customs replied to arguments made in your previous submission, as follows:
In the LVL press line, individual sheets of veneer are converted into
solid wood stock for further manufacturing into engineered wood products such
as I-beams. The sheets of veneer coated with wet glue are stacked one on top of
another in a stair-step fashion, mated together into a continuous billet which is
heated and compressed. The finished stock is then cut to a specified length and
width. You note that the LVL press line does not produce the veneer sheets or
apply the glue to them.
The unassembled continuous LVL line consists of five principal components which work in unison to produce laminated veneer lumber. They are: a three-level layup station, a microwave heating system, a press unit, a saw line, and a central electric/electronic control system.
The function of the lay-up station is to assemble, or “lay up” individual veneer sheets into laminated veneer packages. It has three levels in that it works through three parallel groups of conveyors.
The microwave heating system is an enclosed heating cell where the billet is heated by high-energy microwave power generated by eight or twelve microwave generators situated in an enclosed structure adjacent to the press line. The microwaves are transmitted to the heating cell via rectangular aluminum wave guides. The enclosed structure for the generators will not be imported. The heating cell is a four-sided tunnel with open ends facing the press. The tunnel contains 24 applicators (metal devices enabling precise control) to direct the dispersion of the microwave energy.
The principal component of the LVL press is the continuous press system (“CPS”) unit where the stacked and heated veneer panels are pressed into a continuous billet of LVL stock. The press unit has a width of eight feet and a length of 220 feet. The main elements of the CPS are the inlet system, press body, outlet system and circulation system plus all the hydraulic equipment.
The saw line has two cross billet saws which cut off the continuously pressed LVL into individual billet lengths and a double side trim saw to trim the billet to the specified width.
The central electric/electronic system provides and controls electric power to the layup station, microwave heating system, CPS unit, and saw line and is programmed to ensure proper and efficient interaction among the components.
You suggest that an unassembled continuous laminated veneer lumber (LVL) press is classifiable under HTS subheading 8479.30.00 which provides for presses for the manufacture of particle board or fiber building board of wood or other ligneous materials and other machinery for treating wood or cork.
You also suggest that this unassembled LVL press is a composite machine in accordance with section XVI, note 3, and if failing that it is a functional unit in
accordance with section XVI, note 4. As is evident from the information submitted,
the LVL is a line of machinery rather than a single multifunction machine. Note 3
does not apply since the machines of this LVL line are not fitted together to form a whole. Note 4 certainly would apply if the unassembled press is shipped in a single shipment.
The importer, BCC, anticipates that it will not be possible to import all components in a single shipment. However, BCC expects that it will obtain single entry status pursuant to 19 U.S.C. § 1484(j)(1) (for which Customs is currently promulgating regulations) and thus requests consideration of this ruling request on the assumption that single entry status will be accorded to the various shipments.
Regarding classification, you state on page 25 of your letter that scrutiny of the relevant Explanatory Notes (ENs) reveals that machines of this type are excluded from heading 8465, and specifically included in heading 8479, because they do not “work wood” as that term is employed in heading 8465. (You point out that subheading 8465.94, which provides for bending and assembling machines, includes statistical suffixes for laminating machines and presses however these suffixes are not legally binding. We agree that statistical suffixes have no legal significance.)
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You continue that the core functions of the LVL press line at issue are, in the ordinary meanings of those terms, to “agglomerate” individual veneer panels, and then to “compress” the resulting laminate to form LVL, thereby placing the press outside the scope of heading 8465. Furthermore, the LVL press does not work the individual veneer panels or their surfaces for the purposes of the EN. Any working (i.e., peeling, shaping, and glueing) occurs at points preceding the LVL press. You add that Customs practice and the ENs make clear that “working” wood or its surface denotes functions that shape the underlying substrate, such as planing, splitting, drilling or lathing.
You reiterate and expound upon these arguments in your September 2002 request for reconsideration of NY I83432.
At the meeting on November 21, 2002, you and representatives from BCC emphasized that articles contemplated by heading 8465, HTSUS, do not “work” wood. In your opinion, “working” of wood (cutting, chipping, grinding, peeling, or molding of the wood) would result in waste or scrap in various forms. The machines at issue yield no waste, excess or scrap, and therefore you argue that the articles are excluded from classification under heading 8465, HTSUS, and fall to be classified under heading 8479, HTSUS (both headings are set forth below).
In the supplemental submission dated November 29, 2002, you allege that the
term “fiber” has a significant commercial connotation that affects classification under heading 8465, HTSUS. As discussed below, the Explanatory Notes to heading 8465 exclude articles that, among other things, agglomerate of fibers of wood. Because of this exclusion, you allege that the articles at issue fall to be classified under heading 8479, HTSUS.
You provide definitions of the term “fiber” from several commercial and governmental sources that define the term as encompassing virtually all forms of wood and wood products from standing trees to pulp, paper products and recycled paper.
ISSUE:
Whether the unassembled, continuous laminated veneer lumber press system is classifiable as machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: other: bending or assembling machines under subheading 8465.94.0035, HTSUS; or as other machines and mechanical appliances having individual functions, not specified or included elsewhere (in Chapter 84), under heading 8479, HTSUS?
LAW and ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The HTSUS provisions under consideration are as follows:
8465 Machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials:
Other:
8465.94.00 Bending or assembling machines
For woodworking:
8465.94.0035 Laminating machines.
* * *
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Other machines and mechanical appliances:
8479.30.00 Presses for the manufacture of particle board or fiber building board of wood or other ligneous materials and other machinery for treating wood or cork.
Heading 8479, HTSUS, is a so-called "basket" provision within Chapter 84. As such, it is a heading in which classification "is appropriate only when there is no tariff
category that covers the merchandise more specifically." (Apex Universal, Inc., v.
United States, 22 CIT 465 (1998)). Therefore, we are first addressing the competing provision within Chapter 84, heading 8465, HTSUS, that merits consideration.
The Harmonized Commodity Description and Coding System Explanatory Notes
(“ENs”) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, 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. Customs believes the ENs should always be consulted. See T.D. 89 80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The unassembled, continuous laminated veneer lumber press systems are clearly classifiable in Chapter 84, which provides for, inter alia, machinery and mechanical equipment and parts thereof. Note 5 to Section XVI, HTSUS, provides that “for the purposes of these notes, the expression “machine” means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of chapter 84 or 85.”
The General ENs to Chapter 84 provide, at page 1394, in pertinent part, that:
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(3) Headings 84.25 to 84.78 cover machines and apparatus which, with certain exceptions, are classified there by reference to the field of industry in which they are used, regardless of their particular function in that field.
(4) Heading 84.79 covers machines and mechanical appliances not covered by any preceding heading of the Chapter.
* * *
The General ENs to Chapter 84 continue at page 1394, under subheading (D) “GOODS COVERED BY TWO OR MORE HEADINGS IN THE CHAPTER” and provide, in pertinent part, that:
Machines which fall in two or more headings, none of which is within headings 84.01 to 84.24, are classified in that heading which provides the most specific description of the goods, or according to the principal use of the machine. Multi-purpose machines which are used equally for a number of different purposes or industries (e.g., eyeletting machines used equally well in the paper, textile, leather, plastics, etc., industries) are classified in heading 84.79.
As noted above, 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.
The ENs to heading 8465 provide, at page 1560, in pertinent part, that:
This heading covers machine-tools for the shaping or surface-working (including cutting, forming and assembling) of wood (and materials derived from wood), cork, bone, hardened rubber, hard plastics and similar hard materials (horn, corozo, mother of pearl, ivory, etc.).
The heading excludes machines for working materials which although referred to in the heading do not possess the characteristics of hard materials at the time work commences on them. For this reason, machines for cutting or slicing supple plastics or unhardened rubber are excluded (heading 84.77). Furthermore, the heading does not cover machines for making articles from granules or powder, such as machines for moulding plastic materials (heading 84.77), machines for agglomerating or moulding particles or fibres of wood or other ligneous matter (heading 84.79) or other similar machines. Although they might be considered to be for the treatment of the materials mentioned in the heading, the heading also excludes, in general, machines and apparatus whose function is not to work the material or its surface, e.g., those for the drying of wood or the ageing of it by desiccation (heading 84.19), machines for the
expansion of cork (heading 84.19) or machines for compressing, agglomerating
or impregnating wood (heading 84.79).
* * *
(A) Machines not normally specialized for a particular industry.
This group includes:
* * *
(5) Bending machines which mechanically change the form or physical characteristics of the workpiece by action on its structure.
(6) Assembling machines.
These include:
(a) Machines which assemble two or more parts by means of binding agents, adhesives or gummed paper. This group includes veneer splicing machines, plank glueing machines, panel forming machines, frame clamps, carcase clamps, plywood and laminating wood presses, veneering presses. These machines may incorporate devices for spreading glue on the surface of the wood.
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You emphasize in your submission that, in your interpretation of the ENs, the articles at issue are excluded from classification under heading 8465, HTSUS, because the articles at issue “do not ‘work wood’ as that term is employed in [heading 8465,
HTSUS].” You suggest that the articles “agglomerate” the layers of veneer rather than “assemble” them. The entire EN referenced is set forth above. The ENs unambiguously state that “the heading excludes machines for working materials which although referred to in the heading do not possess the characteristics of hard materials at the time work commences on them.” The layers of veneer are “hard materials” as contemplated by the EN.
As detailed in the “Facts” section above, you contend that the term “fiber” as employed within the industry contemplates all wood and wood related products from timber fields to pulp. Several industry and governmental sources are cited and relied upon as detailed above. We have considered the sources and arguments and reach the following conclusions. We do not believe that the term “fiber” as employed in the HTSUS, specifically in heading 8479, HTSUS, contemplates all forms of wood and wood products. Otherwise, the relevant portion of text of heading 8465 and the related portions of EN 84.65 would have no meaning.
Although the Customs Service may consider the rules and regulations of other government agencies in assisting the Customs Service in determining classification decisions under the HTSUS, the Customs Service is not bound by such rules and regulations in making classification decisions under the HTSUS.
Your interpretation of the language of the EN to heading 8465, HTSUS, is unpersuasive and incorrect, especially given the fact that the heading and subheading contain explicit reference to “laminating machines” as those articles are defined within
EN 84.65(A), 6(a), above. Based on the facts presented, we find that the articles are “laminating wood”/”veneering” presses which assemble two or more parts by means of binding agents, adhesives or gummed paper. See the EN set forth above. The articles will be so classified.
For sake of thoroughness, we set forth the EN to heading 8479, HTSUS, in order to emphasize that articles must not be classifiable in any of the headings preceding the basket provision (see Apex Universal, above) in order to fall to be classified under heading 8479, HTSUS.
The ENs to heading 8479 provide, at page 1597, in pertinent part, that:
This heading is restricted to machinery having individual functions, which:
(a) Is not excluded from this Chapter by the operation of any Section or
Chapter Note.
and (b) Is not covered more specifically by a heading in any other Chapter of
the Nomenclature.
and (c) Cannot be classified in any other particular heading of this Chapter
since:
(i) No other heading covers it by reference to its method of
functioning, description or type.
and (ii) No other heading covers it by reference to its use or to the
industry in which it is employed.
or (iii) It could fall equally well into two (or more) other such headings
(general purpose machines) [bold in original].
The machinery of this heading is distinguished from the parts of machinery, etc., that fall to be classified in accordance with the general provisions concerning parts, by the fact that it has individual functions.
For this purpose the following are to be regarded as having “individual functions”:
(A) Mechanical devices, with or without motors or other driving force, whose function can be performed distinctly from and independently of any other
machine or appliance.
* * *
The articles at issue are not excluded from classification under heading 8465,
HTSUS, and therefore do not fall to be classified under heading 8479, HTSUS. This result is emphasized given the restrictive criteria that must be met in order for articles to be classified under heading 8479, HTSUS.
We are persuaded by and the conclusions reached herein comport with those made in the following rulings:
In HQ 089434, dated September 16, 1991, we classified “veneer welders” (machines used in splicing/joining veneer strip) under heading 8465, HTSUS. In HQ 958807, dated April 30, 1996, we held that parts of machines that “manufacture laminated veneer lumber” were classifiable under heading 8466, HTSUS, which provides for parts suitable for use solely or principally with machine tools of heading 8465, HTSUS. HQ 958807 also speaks to the GRI 2(a) issues you repeat in your
September 2002 submission.
NY I83432 addresses and correctly sets forth Customs determinations concerning your arguments concerning the applicability of Notes 3 and 4 to Chapter 84 and the prospective applicability of single entry status pursuant to 19 U.S.C. § 1484(j)(1).
HOLDING:
The unassembled continuous laminated veneer lumber press systems are classified under subheading 8465.94.0035, HTSUS, which provides for machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: other: bending or assembling machines.
EFFECT ON OTHER RULINGS:
NY I83432 is AFFIRMED.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division