CLA-2 CO:R:C:F 953754 ALS
District Director of Customs
300 S. Ferry Street
Terminal Island, CA 90731
RE: Request for Further Review of Protest 2704-93-100591, Dated
February 18, 1993, Concerning an Industrial Cleaning Fluid
for Compressors of Gas Turbines
Dear Mr. Heinrich:
This ruling is on a protest that was filed against your
decisions of December 18 and 28, 1992, in the liquidation of
entries covering the referenced product.
FACTS:
The product under consideration is a gas turbine compressor
cleaner known as ZOK 27 which is a mixture of ethylan HB-2,
triethanolamine, organic solvent, water and a rust inhibitor.
The article is imported in 20 liter cans and 200 liter drums and
is sold by the importer to the user in those containers. The
label identifies the product as ZOK 27 and indicates its
purposes. The label further indicates that the product is non-
hazardous, the ratio of dilution for proper use, etc.
ISSUE:
Is the product classifiable as a preparation put up for
retail sale?
LAW AND ANALYSIS:
Classification of merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is governed by - 2 -
the General Rules of Interpretation (GRI's) taken in order.
GRI 1 provides that the classification is determined first in
accordance with the terms of the heading and any relative section
and chapter notes. If GRI 1 fails to classify the goods and if
the heading and legal notes do not otherwise require the
remaining GRI's are applied, taken in order.
In considering this matter we noted that both Customs and
the importer agreed as to the nature of the product. Both agreed
that the product was classifiable under the provisions for
surface active preparations, washing preparations (including
auxiliary washing preparations) and cleaning preparations,
whether or not containing soap, other than those of heading 3401,
provided for in heading 3402. The importer states that it only
sells the product, without repackaging, to end users, that these
sales are retail sales and that the product should be classified
in subheading 3402.50.5000, HTSUSA. The importer references the
dictionary definition of the word retail and notes that it is
only licensed to sell products at retail.
Customs noted that the product was imported in 20 liter
(6.6 gallon) and 200 liter (52.8 gallon) containers and that the
product was available in various price groupings depending on the
quantity purchased. It was concluded that because of the size of
the containers and the fact that they were sold in quantity
discounts, the merchandise was not put up for retail sale and the
product was, therefore, classifiable in subheading 3402.90.5030,
HTSUSA.
In considering this matter we note that merchandise is
classifiable in its condition as imported. The instant product
is imported in both a 6.6 gallon (25 liter) high-density
polythene cans and a 52.8 gallon (200 liter) high-density
polythene containers. These containers are sold, without
repackaging, to the end users. The end users do not sell or
repackage the product.
Pictures of the containers provided by the importer reveal
that the outside of the import containers lists the qualities of
the product as well as the size of the containers. It is noted,
for example, that the product is anti-corrosive, nonflammable,
nonhazardous, and that it meets certain technical standards.
Directions for dilution, that rinse and dryout are not essential,
shelf life, the wearing of rubber gloves for prolonged contact
with the product, etc. are also noted on the containers. The
information on these containers would appear to be directed at
the end user since the distributor would have technical - 3 -
information containing this information and need not rely on the
information on the containers.
In considering whether these goods are put up for retail
sale we note that the term "retail" is defined in the Second
College Edition, The American Heritage Dictionary as "[T]he sale
of goods or commodities in small quantities to the consumer."
Although the import containers hold a sizeable quantity of the
product, we do not believe, as noted in Headquarters Ruling
Letter 088701 of July 31, 1992, the container size is conclusive
as to the retail or wholesale disposition of the product. The
product is sold in the import containers to consumers without
repackaging. It, however, is necessary to determine when a
commodity ceases to be in a small quantity and when it is in a
large quantity. It is further necessary to determine this at the
time of importation.
While the importer apparently sells the product only to end
users, such is not controlling in the determination as to whether
the packages are retail or wholesale. We do not believe that
200 liters is a small quantity or that a container of such size
could be considered a retail package. While the importer sells
such packages directly to end users we note that others sell
products in packages of such size to parties who repackage them
and sell them to consumers. While the products so sold may
differ from that of the importer, we believe the fact that such
packages contain a large quantity and that they may be sold to
either end users or parties who will repackage and resell them
indicates that such packages are not retail packages.
We believe the question as to whether the 6.6 gallon can
containing the instant cleaning preparation which is sold
directly to an end users is a small quantity sold to a consumer
is a much closer issue. Since the product is the same regardless
of the container, it is necessary to consider whether a 6.6
gallon (25 liter) can holds a small quantity and whether such
size can is sold to parties who will repackage their contents.
In examining this issue we note that a 6.6 gallon container is
the approximate metric equivalent of a 5 gallon can. We further
note that it is quite common for packages of such size to be sold
in retail establishments for end users with small requirements
such as home owners. Products so sold may include roofing tar,
asphalt for resurfacing driveways, paint and birdseed. In light
of the above we believe it is reasonable to conclude that
packages of such size are retail packages in that they contain a
small quantity of the product and they are usually sold to end
users thereof, i.e., somebody who will use the product and not
repackage and resell it.
- 4 -
HOLDING:
ZOK 27, a gas turbine compressor cleaner, is considered a
preparation put up for retail sale and is classifiable in
subheading 3402.20.5000, HTSUSA, when imported in 6.6 gallon (25
liter) cans and is subject to a free general rate of duty. ZOK
27, is not considered a preparation put up for retail sale and is
classifiable in subheading 3402.90.5030, HTSUSA, when imported in
52.8 gallon (200 liter) drums. Merchandise so classified is
subject to a general rate of duty of 3.7 percent ad valorem.
You are instructed to deny the protest, except to the extent
reclassification of the merchandise as indicated above results in
a duty reduction and partial allowance. A copy of this decision
should be attached to the Customs Form 19 and provided to the
protestant as part of the notice of action on the protest.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be provided by your office to the
protestant no later than 60 days from the date of this letter.
Any reliquidation of the entry in accordance with this decision
must be accomplished prior to mailing of the decision. Sixty
days from the date of the decision the Office of Regulations and
Rulings will take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Lexis, Freedom of
Information Act and other public access channels.
Sincerely
John Durant, Director
Commercial Rulings Division