OT:RR:CTF:CPMM H300202 APP
Port Director, Port of Houston
U.S. Customs and Border Protection
2350 N. Sam Houston Pkwy. E. #1000
Houston, TX 77032-3100
Attn: Protest Unit
RE: Protest and Application for Further Review Number 5301-18-100496; Tariff classification of sulfonated asphalt from India
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 5301-18-100496, timely filed on August 8, 2018, on behalf of Chemject International, Inc. (“protestant”). The AFR concerns U.S. Customs and Border Protection’s (“CBP”) classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of sulfonated asphalt.
FACTS:
The instant sulfonated asphalt is composed of sodium salt of sulfonated asphalt, Chemical Abstracts Service (“CAS”) Number 68201-32-1 and crystalline silica, CAS
No. 14808-60-7. In its original form, the product is a natural asphalt, a solid form of bitumen, which is not naturally water soluble. To make it soluble and dispersible in water, the natural asphalt is chemically modified to perform as a surfactant through a sulfonation process, which involves reacting a natural asphalt material with a sulfonating chemical such as sulfuric acid. The sulfonation reactions are carried out at temperatures ranging from 80F to 250F. During this process, hydrophobic hydrogen atoms are substituted with sulfonate functional groups. Following sulfonation, the asphalt becomes a mixture of natural asphalt and modified natural asphaltenes. The subject sulfonated asphalt is used as an ingredient in high-performance drilling fluids and is not used as an additive in refined petroleum products such as fuels or lubricating oils.
The Protest/AFR covers several entries filed on February 20 and April 28, 2017, and liquidated on February 9, 2018. The sulfonated asphalt was entered duty free under subheading 2715.00.00, HTSUS, which provides for “Bituminous mixtures based on natural asphalt, on natural bitumen, on petroleum bitumen, on mineral tar or on mineral tar pitch (for example, bituminous mastics, cut-backs).” The entries were liquidated at a duty rate of 6.5 percent ad valorem under subheading 3811.90.00, HTSUS, which provides for “Antiknock preparations, oxidation inhibitors, gum inhibitors, viscosity improvers, anti-corrosive preparations and other prepared additives, for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils: Other.”
ISSUE:
Whether the instant sulfonated asphalt is classifiable as a bituminous mixture based on natural asphalt under heading 2715, HTSUS, or as an additive for mineral oils or for other liquids under heading 3811, HTSUS.
LAW AND ANALYSIS:
CBP first notes that the matter is protestable under 19 U.S.C. § 1514(a)(2), as a matter on classification. The AFR was timely filed within 180 days of liquidation of the entries. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103 (2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).
Further review of this protest is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed in this matter involves questions of law and fact that have not been ruled upon by the Commissioner of CBP or his designee, or by the Customs Courts.
Merchandise imported into the United States is classified under the HTSUS, in accordance with the General Rules of Interpretation (“GRIs”). 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. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level.
The HTSUS provisions under consideration are as follows:
2715 Bituminous mixtures based on natural asphalt, on natural bitumen, on petroleum bitumen, on mineral tar or on mineral tar pitch (for example, bituminous mastics, cut-backs)
3811 Antiknock preparations, oxidation inhibitors, gum inhibitors, viscosity improvers, anti-corrosive preparations and other prepared additives, for mineral oils (including gasoline) or for other liquids used for the same purposes as mineral oils:
In interpreting the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) may be utilized. The ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 27.15 states, in relevant part:
The bituminous mixtures of this heading include:
(1) Cut backs consisting generally of 60 % or more of bitumen with a solvent. They are used for road surfacing.
(2) Emulsions or stable suspensions of asphalt, bitumen, pitch or tar, in water, of the kinds used in particular for road surfacing.
(3) Mastics of asphalt and other bituminous mastics, as well as similar bituminous mixtures incorporating mineral substances such as sand or asbestos. These substances are used for caulking, as moulding materials, etc.
The heading extends to these products when agglomerated in blocks, etc., of the kind re melted before use, but it excludes finished articles of regular shape (such as paving flagstones, sheets and tiles) (heading 68.07).
EN 38.11 states in relevant part:
The preparations of this heading are additives for mineral oils or for other liquids used for the same purposes to eliminate or reduce undesirable properties, or to impart or enhance desirable properties.
(A) Prepared additives for mineral oils … 4. Additives for other mineral oils. This group includes:
(a) Pour point depressants, similar to those used for lubricants …
(b) Oxidation inhibitors. These are similar to those used for gasoline (petrol).
(c) Cetane number improvers for gas oil, for example those based on alkyl
nitrates and alkyl nitrites.
(d) Additives with surface active action, which eliminate or prevent the formation of sediment (asphaltenes) in stored oil.
(e) Additives to prevent or reduce undesirable deposits … and additives to reduce corrosion by volatile products ….
(B) Prepared additives for other liquids used for the same purposes as mineral oils. Among the liquids used for the same purposes as mineral oils are:
(a) Fuels based on alcohols (e.g., gasohol); and
(b) Synthetic lubricants … The additives are the same as those used for the corresponding mineral oils.
This heading does not apply to separate chemically defined elements and compounds (usually Chapter 28 or 29), or to petroleum sulphonates not in the form of preparations.
Protestant asserts that the product is classified under heading 2715, HTSUS, specifically under subheading 2715.00.00, HTSUS, as a bituminous mixture based on natural asphalt.
First, we will determine whether the sulphonated asphalt is an additive for mineral oils or for other liquids of heading 3811, HTSUS. Heading 3811 provides for preparations or prepared additives for mineral oils or for other liquids used for the same purposes as mineral oils. EN 38.11 clarifies that the preparations of this heading are additives for mineral oils or for other liquids used as mineral oils to eliminate or reduce undesirable properties, or to impart or enhance desirable properties. Among the liquids used for these purposes are: (a) Fuels based on alcohols; and (b) Synthetic lubricants. Based on the submitted information, the sulfonated asphalt is an additive prepared for use as an ingredient in the production of high-performance drilling muds for use in the well bore during the drilling of an oil well. It is not used as an additive for mineral oils or for other liquids utilized for the same purposes as mineral oils. Therefore, the sulfonated asphalt is not an additive for mineral oils or other liquids of heading 3811, HTSUS.
Heading 2715, HTSUS, provides for bituminous mixtures based on natural asphalt, on natural bitumen, on petroleum bitumen, on mineral tar, or on mineral tar pitch (for example, bituminous mastics, cut-backs). See EN 27.15, supra; see also New York Ruling Letter (“NY”) N019487, dated December 4, 2007 (classifying a mixture of rubber, asphalt, and various inert fillers in subheading 2715.00.00, HTSUS). The instant sulphonated asphalt is intended for use in high performance drilling fluids to address and manage needs for specific well drilling scenarios. Since natural asphalt is not water soluble, it is “sulfonated” to aid in water dispersability. The end-product, a sulphonated asphalt, is partially soluble in water and partially soluble in oil. The product is essentially a mixture of natural asphalt, which is a solid form of bitumen, and modified natural asphaltenes, and as such is similar to the bituminous mixtures listed in EN 27.15.
Accordingly, the subject sulphonated asphalt is a bituminous mixture based on natural asphalt classifiable under heading 2715, HTSUS, in subheading 2715.00.00, HTSUS.
HOLDING:
By application of GRIs 1 and 6, the instant sulfonated asphalt is classified
under heading 2715, HTSUS, specifically under subheading 2715.00.00, HTSUS, which provides for “Bituminous mixtures based on natural asphalt, on natural bitumen, on petroleum bitumen, on mineral tar or on mineral tar pitch (for example, bituminous mastics, cut-backs).” The column one, general rate of duty at the time of entry was Free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
You are instructed to allow the protest in full. A copy of this decision should be attached to the Form 19 Notice of Action.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant, through its counsel, 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 of the decision. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and to the public on the Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and through other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division