OT:RR:CTF:CPMMA H311149 MMM
Re: Application for Further Review of Protest Number 3901-20-110046; tariff classification of PTMEG 2000
Dear Port Director,
This is in reply to the Application for Further Review (AFR) of Protest No. 3901-20- 110046, dated April 9, 2020 , on behalf of Gantrade Corp. (“Protestant”), contesting U.S. Customs and Border Protection’s (“CBP”) classification and liquidation of entry of PTMEG 2000 in heading 3907, Harmonized Tariff Schedule of the United States (HTSUS), as “polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms.”
The subject merchandise was entered in ten entries between September 5 and 11, 2018, in heading 3404, HTSUS, which provides for, in relevant part, “artificial waxes and prepared waxes.” The entry was liquidated on October 18, 2019. The subject merchandise was liquidated in heading 3907, HTSUS, as “polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms.” Protestant claims classification in heading 3404, HTSUS.
FACTS:
The subject merchandise is a waxy, white solid that melts to a clear, colorless, viscous liquid. It is a linear, polymeric, primary diol, with an average of 27 repeating monomer units. Customs laboratory report # NYN20190338 concluded the Drop Melting Point of the tested subject merchandise to be 31.7 ? C (below 40 ? C). Protestant tested the subject merchandise through an independent laboratory, which concluded the Drop Melting Point to be above 40 ? C.
ISSUE:
Whether Customs should rely on its laboratory determination that the subject PTMEG 2000 has a Drop Melting Point below 40 ? C.
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. 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 Protest Number 1703-19-100629 is properly accorded pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve a question of law or fact that has not previously been ruled upon by CBP or the courts.
The 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 GRIs 2 through 6 may then be applied in order.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System (HS) at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
In this case, the 2018 HTSUS headings under consideration are as follows:
3404 Artificial waxes and prepared waxes:
3907 Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms
* * * * Note 5 to Chapter 34 provides:
In heading 3404, subject to the exclusions provided below, the expression "artificial waxes and prepared waxes" applies only to:
Chemically produced organic products of a waxy character, whether or not water-soluble;
Products obtained by mixing different waxes;
Products of a waxy character with a basis of one or more waxes and containing fats, resins, mineral substances or other materials.
Note 3 to Chapter 39 provides:
Headings 3901 to 3911 apply only to goods of a kind produced by chemical synthesis, falling in the following categories:
Liquid synthetic polyolefins of which less than 60 percent by volume distills at 300°C, after conversion to 1,013 millibars when a reduced-pressure distillation method is used (headings 3901 and 3902);
Resins, not highly polymerized, of the coumarone-indene type (heading 3911);
Other synthetic polymers with an average of at least five monomer units;
Silicones (heading 3910);
Resols (heading 3909) and other prepolymers.
Note 6 to Chapter 39 provides:
In headings 3901 to 3914, the expression "primary forms" applies only to the following forms:
Liquids and pastes, including dispersions (emulsions and suspensions) and solutions;
Blocks of irregular shape, lumps, powders (including molding powders), granules, flakes and similar bulk forms.
ENs to Heading 3404 provides:
This heading covers artificial waxes (sometimes known in industry as “syntheticwaxes”) and prepared waxes, as defined in Note 5 to this Chapter, which consist of or contain relatively high molecular weight organic substances and which are not separate chemically defined compounds. These waxes are :
Chemically produced organic products of a waxy character, whether or not water-soluble. Waxes of heading 27.12, produced synthetically or otherwise (e.g., Fischer-Tropsch waxes consisting essentially of hydrocarbons) are, however, excluded. Water-soluble waxy products having surface-active properties are also excluded (heading 34.02).
Products obtained by mixing two or more different animal waxes, different vegetable waxes or different waxes of other classes or by mixing waxes of different classes (animal, vegetable or other) (for example, mixtures of different vegetable waxes and mixtures of a mineral wax with a vegetable wax). Mixtures of mineral waxes are, however, excluded (heading 27.12).
Products of a waxy character with a basis of one or more waxes and containing fats, resins, mineral substances or other materials. Unmixed animal or vegetable waxes, whether or not refined or coloured, are, however, excluded (heading 15.21). Unmixed mineral waxes or mixtures of mineral waxes, whether or not coloured, are also excluded (heading 27.12).
The products described in (A), (B) and (C) above, when mixed with, dispersed (suspended or emulsified) in or dissolved in a liquid medium, are however excluded from this heading (headings 34.05, 38.09, etc.).
The waxes of paragraphs (A) and (C) above must have:
a dropping point above 40 °C; and
a viscosity, when measured by rotational viscometry, not exceeding 10 Pa.s (or 10,000 cP) at a temperature of 10 °C above their dropping point
* * * *
In order to be classified as an artificial wax under heading 3404, merchandise must have a dropping point above 40 ? C. The CBP lab tested the subject merchandise and found the subject merchandise in this case was below 40 ? C and therefore did not meet the dropping point criterion in the ENs to 3404. The Protestant argues that the testing method used by CBP was incorrect.
CBP enjoys a statutory presumption of correctness with regard to factual disputes.1 Thus, “an importer has the burden to prove by a preponderance of the evidence that a Customs’ decision” was incorrect.2 A preponderance of the evidence has been defined in civil cases to mean “the greater weight of evidence, evidence which is more convincing than the evidence which is offered in opposition to it.”3
The courts have long held that “the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct.”4 However, “[i]f a prima facie case is made out, the presumption is destroyed, and the Government has the burden of going forward with the evidence.”5 Furthermore, in HQ 955711, dated July 21, 1994, CBP held that “where there is a conflict between results obtained by a Customs laboratory and those obtained by private or independent laboratories, Customs will, in the absence of
1 28 U.S.C. § 2639(a)(1); Anhydrides & Chems., Inc. v. United States, 130 F.3d 1481, 1486 (Fed. Cir. 1997).
2 Ford Motor Company v. United States, 157 F.3d 849, 855 (Fed. Cir. 1998); see also Fabil Manf. Co. v. United States, 237 F.3d 1335, 1340 (Fed. Cir. 2001) (“[E]xcept for cases challenging Customs rulings before importation, the preponderance-of-the-evidence standard that generally applies in civil cases also covers suits in the Court of International Trade challenging post-importation Customs decisions.”).
3 St. Paul Fire & Marine Insur. Co. v. United States, 6 F.3d 763, 769 (Fed. Cir. 1993) (citing Hale v. Dept. of Transp., Fed. Aviation Admin., 772 F.2d 882, 885 (Fed. Cir. 1985)).
4 Aluminum Co. of America v. United States, 477 F.2d 1396, 1398 (C.C.P.A. 1973) (quoting Consolidated Cork Corp. v. United States, 54 Cust. Ct. 83, 85 (1965)).
5 Id. at 1399.
evidence that the testing procedure or methodology used by the Customs laboratory was flawed, accept the Customs laboratory report.”
In this case, the Protestant believes that CBP decision was incorrect because it was based on laboratory testing method ASTM D3954-15. The protestant claims the testing method used by CBP does not properly take into account the super cooling characteristics of PTMEG 2000. The protestant argues that the proper testing method is ASTM D127-08, which accurately accounts for the super cooling property of PTMEG 2000 and leads to an accurate testing result for the Drop Melting Point. The Protestant claims that the CBP laboratory measured the Drop Melting Point on PTMEG 2000 while it was in a liquid state, and not the required crystalline wax state.
In response, we note that we consulted with CBP’s laboratory to obtain more information on which testing procedures the laboratory used. CBP historically uses ASTM D3954-15 as the procedure to test non-petroleum derived waxes. When comparing the automated procedure both methods have a waiting period of two hours for the wax crystallization before sample testing.
Since neither method takes into account the super-cooling effect for waxes (as claimed by the protestant), it is understood by CBP that both methods will work regardless of the type of wax within the parameters of the methods. Since ASTM does not suggest an arbitrator method when differing results are reached due to tested material properties or method variability; and the analyst followed the established procedure as per ASTM D3954-15, the protestant has failed to rebut CBP’s presumption of correctness.
The Protestant also argues that CBP has previously classified PTMEG 2000 under heading 3404 in New York Ruling (“NY”) 876960, dated October 22, 1992 and that CBP’s CF 29 Notice of Action on September 11, 2019 was the first time PTMEG 2000 was classified by CBP under heading 3907. 6 However, the protestant failed to notice NY N266102, dated July 9, 2015, which classified PTMEG 2000 under heading 3907, accounting for the drop melting point of 32 ? C (also tested in liquid state). Moreover, there is no indication that the New York Seaport Area Director’s 1992 ruling included Customs laboratory analysis of the merchandise rather than reliance on information provided by the importer. Therefore, reliance on NY 876960, by an importer whose sample has a dropping point nearly identical to that stated in NY N266102, is misplaced. Hence, classification in heading 3404 is precluded and the subject merchandise is classified in heading 3907, HTSUS.
HOLDING:
By application of GRI 1, the PTMEG 2000 is classified under headings 3907, HTSUS, specifically subheading 3907.20.0000, HTSUS, which provides for: “polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms.” The 2018 column one, general rate of duty for subheading 3907.20.0000, HTSUS, is 6.5% ad valorem.
6 Protestant also argues that CBP had previously confirmed the classification of PTMEG 2000 to Gantrade on three occasions (June 2012, March 2013, and June 2015) under HTSUS subheading 3404.90.5150, which provides for artificial waxes. CBP notes that Gantrade never requested a binding ruling for their PTMEG products.
You are instructed to DENY the protest. 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 no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the 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 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,
ALLYSON R
Digitally signed by ALLYSON R MATTANAH
Date: 2021.03.22
15:03:29 -04'00'
Craig T. Clark, Director
for
Commercial and Trade Facilitation Division