CLA-2: OT:RR:CTF:TCM H023500 KSH
Port Director
U.S. Customs and Border Protection
Port of Charleston
200 East Bay Street
Charleston, SC 29401
RE: Application for Further Review of Protest 1601-07-100191
Dear Port Director: This is in reply to your correspondence forwarding Application for Further Review of Protest (AFR) 1601-07-100191, filed by McGuire Woods, LLP, on behalf of its client Tarkett Wood, Inc. The protest is against Customs and Border Protection’s (CBP) classification and liquidation of one entry of wood flooring panels under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
On June 21, 2006, protestant entered the merchandise subject to this protest in heading 4418, HTSUS, which provides for: “Builders’ joinery and carpentry of wood, including cellular wood panels and assembled parquet panels.” On July 13, 2006, CBP issued a request for information requesting samples, whether the flooring panels are composed of solid wood and whether they are tongue and grooved. Protestant replied that the flooring panels are “not
solid wood”. Rather, protestant stated that the merchandise is a three layer engineered tongue and grooved wood panel with a face layer of oak or ash, a core of fir and a bottom layer of either fir or pine. Based upon protestant’s response, CBP issued a notice of action on October 11, 2006, to reclassify the merchandise in heading 4412, HTSUS, which provides for: “Plywood, veneered panels and similar laminated wood.” The merchandise was liquidated in heading 4412, HTSUS, on November 13, 2006.
On May 8, 2007, protestant filed a protest and application for further review against the classification and liquidation of the merchandise in heading 4412, HTSUS. Protestant’s AFR request was denied on November 26, 2007. Protestant filed a request to set aside the denial of the application for further review on December 12, 2007. Protestant’s request was granted on January 3, 2008. The protest was timely filed pursuant to 19 U.S.C. 1514(c)(3) and 19 C.F.R. 174.12(e)(1).
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 CBP or by the courts and that the decision is inconsistent with court decisions and Headquarters Ruling Letter (HQ) 966511, dated July 22, 2004. See 19 C.F.R. 174.24(a) and (b). Further review is warranted pursuant to 19 CFR §§174.24(a) and 174.25.
According to CBP Laboratory Reports #SV 20061660, dated August 22, 2006, #SV20061658, dated September 26, 2006 and #SV20061655, dated August 22, 2006, the merchandise at issue is plywood of tongue and grooved construction. The face ply is oak or ash which measures 3.5 mm in thickness and 65 mm in width. The face ply has been coated with a clear material which does not obscure the grain, texture or markings of the face ply. The core is composed of 9 mm thick strips of wood placed parallel to each other. The bottom ply is composed of spruce and measures 1 mm in thickness. The core layer is perpendicular to the face and back plies. The flooring panels do not exhibit a pattern.
ISSUE:
Whether the flooring panels are classified in heading 4412, HTSUS, as plywood or heading 4418, HTSUS, as assembled parquet panels. 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 HTSUS and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
Plywood, veneered panels and similar laminated wood:
4418 Builders’ joinery and carpentry of wood, including cellular wood panels and assembled parquet panels:
Explanatory Note 44.12 provides, in part, that:
This heading covers: (1) Plywood consisting of three or more sheets of wood glued and
pressed one on the other and generally disposed so that the grains of successive layers are at an angle; this gives the panels greater strength and by compensating shrinkage, reduces warping. Each component sheet is known as a "ply" and plywood is usually formed of an odd number of plies, the middle ply being called the "core".
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The heading also covers plywood panels or veneered panels, used as flooring panels, and sometimes referred to as “parquet flooring”. These panels have a thin veneer of wood affixed to the surface, so as to simulate a flooring panel made up of parquet strips.
The heading also excludes :
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(c) Cellular wood panels and assembled parquet panels or tiles including those consisting of parquet strips assembled on a support of one or more layers of wood (heading 44.18).
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The Explanatory Notes to heading 4418, HTSUS, state, in pertinent part:
* * * * * *
This heading also covers parquet strips, etc., assembled into panels or tiles, with or without borders, including parquet panels or tiles consisting of parquet strips assembled on a support of one or more layers of wood. These panels or tiles may be tongued and grooved at the edges to facilitate assembly.
* * *
The heading does not cover :
(a) Plywood panels or veneered panels, used as flooring panels, which have a thin veneer of wood affixed to the surface, so as to simulate a flooring panel made up of parquet strips (heading 44.12).
* * *
Protestant contends that the flooring panels are parquet flooring classified
in heading 4418, HTSUS. Protestant argues that heading 4418, HTSUS, is a more specific provision than heading 4412, HTSUS, inasmuch as the provision for parquet panels is more difficult to satisfy than the provision for plywood. Citing to Millenium Lumber Distribution Ltd., v. United States, Slip. Op. 07-56, protestant states that its merchandise is identifiable and fixed as part of a floor and is used solely for use in assembling a floor. Protestant also cites to the World Customs Organization Compendium of Classification Opinions which classified assembled parquet flooring in heading 4418, HTSUS. Protestant refers to HQ 966511, dated July 22, 2004, which classified assembled flooring which was not multilayered in heading 4418, HTSUS, as support for classification in heading 4418, HTSUS. Lastly, protestant cites to Chapter 44, Additional U.S. Note 4(b), which states that “Heading 4418 includes …multi-layer assembled flooring panels having a face ply of 4 mm or more in thickness.” Though Additional U.S. Note 4(b) did not become effective until after the merchandise was entered, protestant argues that the U.S. note is nevertheless instructive.
Protestant discounts the Court of Appeals for the Federal Circuit’s decision in Boen Harwood Flooring, Inc. United States, 357 F. Supp.3d 1262 (2004) because the Court did not address classification in heading 4418, HTSUS. However, we note that the Court did recognized that CBP initially classified the merchandise in heading 4418, HTSUS, but later abandoned that
claim. Id. at 1263. Moreover, although the Court is required to give deference to CBP’s classification decisions, see Bauer Nike Hockey U.S.A., Inc. v. United States, 393 F.3d 1246, 1249-50 (Fed. Cir. 2004), it is nonetheless ultimately "charged with the duty to reach the correct [classification] decision." Better Home Plastics Corp. v. United States, 119 F.3d 969, 971 (CIT 1997) (quoting Rollerblade, 112 F.3d at 484).
In Boen, the Court set forth the characteristics of plywood as follows:
(1) there must be at least three layers; (2) each layer must be arranged at a right angle to its adjacent layer; and (3) the layers must be bonded together. There is no requirement that each layer be constructed in a certain manner. Id. at 1264.
The Court ultimately concluded that the merchandise at issue in Boen was
classified in heading 4412, HTSUS, as plywood. Id. The instant merchandise meets the definition of plywood above. It is constructed of three layers which are arranged at right angles to each other and bonded together.
Furthermore, the instant merchandise is described by EN 44.12 as plywood. It consists of an odd number of plys affixed to a 9 mm core. While it does not display a pattern typical of “parquet flooring” even “simulated parquet” flooring is included in heading 4412, HTSUS, as plywood (EN 44.12). The instant merchandise is like that in HQ 964567, dated May 14, 2001, in that it consists of a thin veneer of wood affixed to a core, creating a flooring panel. Veneered flooring remains classified in heading 4412, HTSUS.
Moreover, the instant merchandise does not meet the terms of heading 4418, HTSUS. Parquet flooring refers to flooring composed of short pieces of assembled wood strips or friezes that form a pattern, i.e., mosaic, herringbone, basket, Hungarian, etc. See HQ 966511, dated July 22, 2004. Accordingly, it is irrelevant whether heading 4418, HTSUS, is a more specific provision as the instant merchandise does not fit the terms of heading 4418, HTSUS. Furthermore, the fact that the identity of the merchandise as flooring is fixed does not prevent classification in heading 4412, HTSUS, under Millenium Lumber, supra. Heading 4412, HTSUS, also includes flooring. EN 44.12.
The World Customs Organization’s classification opinion is not persuasive as it pertained to the classification of assembled flooring panels made from solid wood strips. The flooring panels at issue have a thin veneer affixed to their surface and are therefore not substantially similar to the merchandise described in the WCO opinion. For the same reasons, HQ 966511 is not dispositive because the merchandise therein was also composed of solid wood strips.
Additional U.S. Note 4(b), though not binding for classification herein, further confirms that multi-layer assembled flooring panels with a face ply of 4 mm or more in thickness (beginning February 3, 2007 and forward) are included in heading 4418, HTSUS. The merchandise at issue exhibits a face ply of 3.5 mm in thickness. Therefore, even if Additional U.S. Note 4(b) were applicable, the instant merchandise would still be classified in heading 4412, HTSUS.
HOLDING:
By application of GRI 1, the wood flooring panels are classified in heading 4412, HTSUS. They are provided for in subheading 4412.29.36, HTSUS, which provides for: “Plywood, veneered panels and similar laminated wood: Other, with at least one outer ply of nonconiferous wood: Other: Plywood: Not surface covered, or surface covered with a clear or transparent material which does not obscure the grain, texture or markings of the face ply: Other.” The 2006 general, column one rate of duty is 8% ad valorem. Since the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to deny the protest in full.
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 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