CLA-2 OT:RR:CTF:TCM H295584 ALS
Port Director
Miami Seaport
1103 N. Cruise Blvd
Terminal G
Miami, FL 33132
Attn: John Royea, Import Specialist, Automotive and Aerospace Center
RE: Application for Further Review Protest No. 5201-18-100012; Tariff classification of Specialized Turbine Insulation System
Dear Port Director:
This letter is in reply to an Application for Further Review (“AFR”) of Protest number 5201-18-100012, filed on behalf of Eugen Arnold, GmbH (also referred to herein as “protestant”). The Protest is against U.S. Customs and Border Protection’s (“CBP’s”) tariff classification of the above-referenced Specialized Turbine Insulation System under subheading 7019.39.10 of the Harmonized Tariff Schedule of the United States (“HTSUS”). In reaching our decision, we also considered the substance of our conference with the protestant’s counsel, dated May 19, 2021.
FACTS:
The specialized turbine insulation system (also referred to herein as “STIS”) is comprised of interlocking three-dimensional segments that conform to the contours of a gas turbine engine. The insulation segments consists of an outer surface of glass fiber fabric coated with silicon, an inner glass fiber fabric, and inner layering of glass fiber mats and calcium-silica fiber mats.
The segments are designed to be stud-welded to the turbine engine after importation by means of stainless steel nuts and bolts. Also after importation, a stainless steel superstructure is bolted to the turbine engine in order to ensure a tight fit for the insulation and to afford a safer working surface during installation and servicing.
The protestant states that the turbine engine cannot operate, even momentarily, without the STIS. The operating temperature of the turbine engine is approximately 1,100 degrees Fahrenheit. According to the protestant, attempting to operate the turbine engine without the STIS would result in immediate destruction of the turbine engine’s electronics, instrumentation, and gas lines, and the internal components would be destroyed due to unequal thermal expansion. Moreover, without the STIS, the ambient temperature would quickly become highly dangerous. The protestant also states that the STIS is designed and intended for use with only two specific industrial gas turbines.
ISSUE:
Is the Specialized Turbine Insulation System, as described above, properly classified under heading 7019, HTSUS, which provides for “Glass fibers (including glass wool) and articles thereof (for example, yarn, woven fabrics)”, or heading 8411, HTSUS, which provides for “Turbojets, turbopropellers and other gas turbines, and parts
thereof”?
LAW AND ANALYSIS:
Initially, we note that the Protest was timely filed on January 22, 2018, which is within 180 days of the date of the liquidation of the subject entry, October 20, 2017. See 19 U.S.C. §1514(c)(3)(B). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. §1514(a)(2). Further Review of Protest No. 5201-18-100012 is properly accorded to the protestant pursuant to 19 CFR 174.24(b).
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order.
The following headings and subheadings of the HTSUS are under consideration in this case:
7019 Glass fibers (including glass wool) and articles thereof (for example, yarn, woven fabrics):
7019.39 Other:
7019.39.10 Insulation products…
* * *
8411 Turbojets, turbopropellers and other gas turbines, and parts thereof:
8411.99 Other:
8411.99.90 Other…
Note 1(c) to Chapter 84, HTSUS, under which heading 8411 is delineated, provides the following:
This chapter does not cover;
* * *
Laboratory glassware (heading 7017); machinery, appliances or other articles for technical uses or parts thereof, of glass (heading 7019 or 7020)….
Thus, in accordance with Note 1(c), if the subject merchandise is an article of glass for technical use and is therefore covered by heading 7019, then it is excluded from being classified under chapter 84 as part of a turbine.
The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The ENs for heading 7019 state the following, in relevant part:
This heading includes glass fibres themselves and glass fibres (including glass wool as defined in Note 4 to this Chapter) made up in various forms, including those glass fibre articles excluded from other headings by reason of their nature.
* * *
The uses of glass fibres are increasing steadily, for example:
* * *
(2) For heat-insulation purposes (e.g., for insulating roofs, chimneys, boilers, furnaces, steam piping, steam turbine bodies, tubes or pipes, ice-cupboards, and heat-insulated vans or wagons) in the form of fibres in bulk, nodules, felts, pads, casings (for pipes) or braids, (whether or not impregnated with glue, pitch or other substances, or with paper, textile or wire mesh supports).
The Protestant asserts that the STIS is classifiable under heading 8411 because the STIS meets “both tests for classification of parts” as discussed in Bauerhin Tech., Ltd. P’ship v. United States, 110 F.3d 774 (Fed. Cir. 1997). Whether or not the STIS is a part of a gas turbine as provided for under heading 8411 is not the crux of the issue at hand, however.
As noted above, Note 1(c) to Chapter 84, HTSUS, specifically excludes articles of glass for technical use that are covered under heading 7019. The ENs for heading 7019 provide further illumination in this regard, stating that heading 7019 includes articles of glass fiber that are “excluded from other headings by reason of their nature.” Both the outer surface and the inner layer of the STIS are made of glass fiber. The use of the STIS as thermal insulation for a gas turbine engine is technical by nature, as supported by the fact that the subject segments are involved in the operation of turbine engines as explained by the protestant. Given these fundamental facts, we conclude that the STIS is an article of glass fiber covered under heading 7019 and excluded from being classified under Chapter 84 by virtue of Note 1(c) to chapter 84.
Protestant refers to CBP rulings HQ 958076 (October 19, 1995), HQ 959572 (June 18, 1997), and NY N028193 (August 6, 2008), that CBP cited when rate advancing the subject entry. Protestant argues that these rulings were incorrectly decided and therefore should not be followed in this instance. With regard to HQ 958076 and HQ 959572 (a reconsideration of HQ 958076), the insulation article in those cases is used to insulate an aircraft engine thrust reverser and struts, not a gas turbine. Thus, heading 8411 is not invoked in those cases, rendering them inapplicable to the present case. With regard to NY N028193, while N028193 did not discuss Note 1(c) to Chapter 84, HTSUS, the note is as applicable to that case as it is to the present case. The lack of mention of Note 1(c) in N028193 does not vitiate the holding of N028193.
Given the foregoing, we conclude that the Specialized Turbine Insulation System is an article of glass fiber that is specifically excluded from Chapter 84 by virtue of Note 1(c) to Chapter 84 because it is classified under heading 7019, HTSUS. Specifically, the Specialized Turbine Insulation System is properly classified under subheading 7019.39.10, HTSUS, which provides for “Glass fibers (including glass wool) and articles thereof (for example, yarn, woven fabrics): Other: Insulation products …”
HOLDING:
By application of GRIs 1 and 6, the Specialized Turbine Insulation System is classified under heading 7019, HTSUS, and specifically provided for under subheading 7019.39.10, HTSUS, which provides for “Glass fibers (including glass wool) and articles thereof (for example, yarn, woven fabrics): Other: Insulation products ….” The general column one rate of duty at the time of entry for merchandise classified in this subheading is 4.9% ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
You are instructed to DENY the protest.
You are to notify the protestant no later than sixty days from the date of this decision. Sixty days from the date of the decision, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, which can be found on the CBP website at http://www.cbp.gov or other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division