CLA-2: OT:RR:CTF:TCM H004102 KSH
Port Director
U.S. Customs and Border Protection
6747 Engle Road Middleburg Heights, OH 44130
RE: Application for Further Review of Protest 4198-06-100175
Dear Port Director: This is in reply to your correspondence forwarding Application for Further Review of Protest (AFR) 4198-06-100175, filed by Baikowski International Corporation.
The protest is against Customs and Border Protection’s (CBP) classification of fifty-two entries of ceramic yttrium aluminum garnet (YAG) slabs, plates and rods in heading 7104 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Synthetic or reconstructed precious or semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed precious or semiprecious stones, temporarily strung for convenience of transport.”
Protestant entered the merchandise subject to this protest between January 12, 2005 and December 30, 2005 free of duty in heading 2846, HTSUS, which provides for “Compounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals.” The merchandise was liquidated under heading 7104, HTSUS, between March 10, 2006 and March 24, 2006.
Protestant filed a protest with an application for further review on May 23, 2006, challenging the classification of the merchandise in heading 7104, HTSUS. Protestant’s AFR request was approved. The protest was timely filed pursuant to 19 U.S.C. 1514(c)(3) with respect to fifty of the entries. The protest was untimely with regard to two entries as they had not liquidated at the time the protest was filed.
In support of protestant’s application for further review, protestant alleges that the protest involves questions of fact and law, which have not been ruled upon by Customs and Border Protection (CBP) or by the courts. See 19 C.F.R. 174.24(b). Further review is warranted pursuant to 19 CFR §§174.24(b) and 174.25.
FACTS:
The ceramic Yttrium Aluminum Oxide Garnet (YAG) is shaped as a rod, plate or slab which varies in size from 10mm to 300mm. It is used as a resonator or amplifier inside laser cavities. The ceramic YAG is a component of a laser that converts normal light into coherent laser light.
ISSUE: Whether the ceramic YAG rods, plates or slabs are classified in heading 2846, HTSUS, as compounds of yttrium, or in heading 7104, HTSUS, as synthetic or reconstructed precious or semi-precious stones. LAW AND ANALYSIS:
Classification of goods under the HTSUS 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 of the Harmonized System 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. It is Customs and Border Protection’s (CBP) practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUSA. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
In support of the application for further review, protestant argues that heading 2846, HTSUS, is more appropriate because the chemical nature of YAG meets the heading’s definition and precludes its classification in Chapter 71, HTSUS.
The EN to heading 2846, HTSUS, provides in relevant part:
This heading covers the inorganic or organic compounds of yttrium, of scandium or of the rare-earth metals of heading 28.05 (lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium). The heading also covers compounds derived directly by chemical treatment from mixtures of the elements. This means that the heading will include mixtures of oxides or hydroxides of these elements or mixtures of salts having the same anion (e.g., rare-earth metal chlorides), but not mixtures of salts having different anions, whether or not the cation is the same….
The compounds of this heading include :
* * * *
(2) Other rare-earth metal compounds. Yttrium oxide (yttria), terbium oxide (terbia), mixtures of ytterbium oxides (ytterbia) and of oxides of other rare-earth metals of commerce are reasonably pure. The heading includes mixtures of salts derived directly from such mixtures of oxides.
* * * *
Note 3(f) to Chapter 28, HTSUS, states:
3. Subject to the provisions of note 1 to section VI, this chapter does not cover :
(f) Precious or semi-precious stones (natural, synthetic or reconstructed) or dust or powder of such stones (headings 7102 to 7105), or precious metals or precious metal alloys of chapter 71.
In accordance with Note 3(f) to Chapter 28, HTSUS, the ceramic YAG must be excluded from Chapter 71, HTSUS, before classification in Chapter 28, HTSUS, can be considered.
The EN to heading 7104, HTSUS, states, in relevant part:
(A) Synthetic precious and semi-precious stones. This expression covers a range of chemically produced stones which either:
- have essentially the same chemical composition and crystal structure as a particular natural stone (e.g., ruby, sapphire, emerald, industrial diamond, piezo-electric quartz); or
- because of their colour, brilliance, resistance to deterioration, and hardness are used by jewellers, goldsmiths and silversmiths in place of natural precious or semi-precious stones, even if they do not have the same chemical composition and crystal structure as the stones which they resemble, e.g., yttrium aluminium garnet and synthetic cubic zirconia, both of which are used to imitate diamond.
When unworked, synthetic stones generally have the appearance of small cylinders or pear-shaped drops and are known as “ boules ”; these are usually split along their length or sawn into discs.
* * * *
To make yttrium-aluminum crystals with the structure of garnet, an iridium crucible lined with zirconium oxide is used. The process is carried out in nitrogen or argon atmosphere at a normal pressure. Aluminum oxide and yttrium oxide are mixed in a ratio of 3:5; the mixture is calcined at a temperature of 1500-1700°C for approximately 24 hours, and thereafter melted at a temperature of 1950°C. Then the seed crystal is put into the melt and the temperature is lowered by pulling the reaction vessel slowly away from the heat source until the crystallization process begins. The rotated seed crystal is pulled out of the melt. See www.rusgems.com.
The ceramic YAG consists, in part, of yttrium oxide. However, it is further processed with aluminum oxide to create a boule which is subsequently manufactured into slabs, plates and rods. As the yttrium oxide has been further processed beyond its natural state by combining it with aluminum oxide to create a synthetic or semi-precious stone, it is excluded from classification in Chapter 28, HTSUS, by Note 3(f) to Chapter 28, HTSUS. Rather, it is properly classified in Heading 7104, HTSUS.
HOLDING:
Protest number 4198-06-100175 is denied. The ceramic YAG slabs, plates and rods are classified in heading 7104, HTSUS. They are provided for in subheading 7104.90.5000, HTSUS, which provides for “Synthetic or reconstructed precious or semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed precious or semiprecious stones, temporarily strung for convenience of transport: Other: Other.” The column one general rate of duty at the time of entry was 6.4% ad valorem.
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 Regulations and Rulings of the Office of International Trade 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 and Trade Facilitation Division