CLA-2: RR:CR:TE 966944 KSH
Port Director
U.S. Customs and Border Protection
198 West Service Road
Champlain, NY 12919
RE: Application for Further Review of Protest 0712-03-100181
Dear Port Director: This is in reply to your correspondence, dated January 5, 2004, forwarding Application for Further Review of Protest (AFR) 0712-03-100181, filed by Barnes, Richardson & Colburn, on behalf of Winter-Wolff International Inc.
FACTS: The protest is against Customs and Border Protection’s (CBP) classification and assessment of duty on metallized capacitor film under subheading 3921.90.4090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other plates, sheets, film, foil and strip, of plastics: other: other: flexible: other, with a rate of duty of 4.2 percent ad valorem.
On September 3, 2002, protestant entered one entry of metallized capacitor film. The entry was liquidated on July 7, 2003 under subheading 3921.90.4090, HTSUS, with a rate of duty of 4.2 percent ad valorem. On October 3, 2003, protestant filed the instant protest and application for further review (AFR) protesting the classification and assessment of duty. Protestant’s AFR request was approved. The protest was timely filed pursuant to 19 U.S.C. 1514 (c)(3) and 19 C.F.R. 174.12 (e)(1).
In support of protestant’s application for further review, protestant alleges that although CBP has ruled on the classification of metallized capacitor films, it
has not analyzed the products in light of the exclusion in Note 10 to Chapter 39. Further review is warranted pursuant to 19 CFR §§174.24(c) and 174.25.
ISSUE: Whether the metallized capacitor film is classifiable in subheading 3921.90.4090, HTSUS, which provides for “other plates, sheets, film, foil and strip, of plastics: other: other: flexible: other” or in subheading 8532.90.0000, HTSUS, which provides for “electrical capacitors, …;parts thereof: parts.” LAW AND ANALYSIS: Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The subject merchandise was classified in subheading 3921.90.4090, HTSUS, as flexible sheets of plastics.
In a telephone conversation with a National Import Specialist, protestant identified the film as being of metallized polyethylene terephthalate. Film of metallized polyethylene terephthalate is classified in 3920.62.0010, HTSUS, which provides for “other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials: Of polycarbonates, alkyd resins, polyallyl esters or other polyesters: Of poly(ethylene terephthalate), Metallized PET film.”
Protestant argues that the metallized capacitor film has been further worked through the metallization, masking and slitting processes and is therefore excluded from classification as a plate, sheet, foil, film or strip of plastic. Protestant maintains that the metallized film is classifiable in subheading 8532.90.0000, HTSUS, which provides for “Electrical capacitors, …; parts thereof: Parts.”
Note 10 to Chapter 39, HTSUS, provides:
In headings 3920 and 3921, the expression “plates, sheets, film, foil and strip” applies only to plates, sheets, film, foil and strip (other than those of chapter 54) and to blocks of regular geometric shape, whether or not printed or otherwise surface-worked, uncut or cut into rectangles (including squares) but not further worked (even if when so cut they become articles ready for use).
Protestant cites to Winter-Wolff Inc. v. United States, 22 C.I.T. 70, 966 F. Supp. 1258 (1988) which defined “further worked” as “to form, fashion or shape an existing product to a greater extent.” Id. at 78. Applying the definition to the metallized capacitor film at issue, protestant asserts that the metallization is performed on merchandise that already exists as a commercial product, the metallization adds substantial value to the existing plastic substrate and the metallized capacitor film offers the consumer a better product than was available prior to processing. Protestant concludes that the film undergoing the metallization process qualifies as an existing product that has been formed, fashioned or shaped to a greater extent and is therefore further worked. Inasmuch as the metaliized capacitor film has been further worked, protestant contends that it should be classified as a part of a capacitor element.
Note 10 to Chapter 39, HTSUS, includes film whether or not surface worked but not further worked. Thus, before determining whether the metallization process constitutes further working it must first be excluded as surface working.
The E.N. to Heading 3920, HTSUS, provides in relevant part:
* * * Further, minor surface treatments such as coloration, printing (subject to Note 2 to Section VII), vacuum deposition of metal are not to be regarded as reinforcements or similar combinations for the purposes of this heading.
According to the express language of the E.N., vacuum deposition of metal is considered a surface treatment permissible under the terms of Note 10. As such, it cannot be considered further working.
Assuming arguendo, that the metallization process did constitute further working, the metallized capacitor film still could not be classified as a part of a capacitor.
An article may be classified as a part of another article when, in its imported condition, it has been so far advanced so as to be dedicated to and commercially fit for use with that article and incapable of being made into more than one article or class of articles. See Avin Industrial Products Co. v. United States, 72 Cust. Ct. 43, C.D. 4503, 376 F. Supp. 879, reh. denied, 72 Cust. Ct. 147, C.D. 4522 (1974). See also Haraeus-Amersil, Inc. v. United States, 640 F. Supp. 1331 (CIT 1986) (so advanced that nothing remained to be done except cut precious metal contact tape apart); EM Chemicals v. United States, 728 F. Supp. 723 (CIT 1989) (liquid crystal used in liquid crystal displays imported in advanced manufactured state such that the product as imported is ready to be a part of the LCD by being sandwiched between two plates), and Ludvig Svensson, Inc. v. United States, 62 F. Supp. 2d 1171 (CIT 1999), infra. Whether an item made into multiple parts after importation is classifiable as a part of other articles requires the determination of whether the article 1) is “dedicated solely or principally for use in those articles and must not have substantial other independent commercial uses” and 2) “if the item as imported can be made into multiple parts of articles, the item must identify and fix with certainty the individual parts to be made from it.” See Baxter Healthcare Corp. of Puerto Rico v. United States, 182 F.3d 1333 (CAFC 1999) (hereinafter Baxter). In Baxter, rolls of Oxyphan (used for making membrane oxygenators) failed the second part of the test because the individual parts cannot be discerned from the roll. The roll nowhere marked or otherwise identified the individual parts to be made from it. But see Ludvig Svensson, 62 F. Supp. 2d 171 (holding environmental screens were in an advanced state of manufacture, i.e., no longer materials, because the special properties of the screens for used as greenhouse roofs are fixed and not altered by minimal post-importation processing).
After importation, the metaliized film is rewound and cut to length for the capacitor for which it was intended. The film is unrolled and re-rolled with a second metallized film. In cases where the film has an edge margin, the margin edge of the first film is placed on the opposite side margin edge of the second film. When the two layers of metallized film are rolled together, they are sprayed on each end with a molten metal to provide an end connection contact to the film to complete the processing of the metallized capacitor film into a finished capacitor element. Without the post-importation processing, or any other identifying characteristic, the metallized film, like the rolls of Oxyphan in Baxter, supra, cannot be distinguished at importation as parts of a capacitor. The identity of the metallized film as parts of a capacitor is not fixed with certainty because the film must be rewound and cut to length and may be further processed before it can be used for the specific capacitor for which it was intended. Accordingly, the metallized capacitor film cannot be classified under subheading 8532.90.0000, HTSUS.
HOLDING:
The metallized capacitor film is classified in subheading 3920.62.0010, HTSUS, which provides for “other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials: Of polycarbonates, …:Of poly(ethylene terephthalate), Metallized PET film.” The rate of duty at the time of entry was 4.2 percent ad valorem. Since the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to deny the protest in full.
In accordance with the Protest/Petition Processing Handbook, (CIS HB, January 2002, pp 18 and 21), 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 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 CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division