CLA-2 OT:RR:CTF:TCM: H051895 RM
Port Director
New York/Newark Service Port
U.S. Customs and Border Protection
11 Raymond Boulevard
Newark, NJ 07102
RE: Silver Grain; Application for Further Review of Protest No. 4601-08-102252
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 4601-08-102252, timely filed by counsel on behalf of Heraeus Precious Metal Management, Inc., concerning the classification of silver grain under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
This Protest concerns silver grain, roughly spherical in shape, ranging in size from approximately one to five millimeters in diameter. According to Protestant, the grain is formed by melting silver and pouring it into a pre-heated shot box (i.e., a box with holes) that is held above a graining pit filled with chilled water. The silver that seeps through the shot box freezes into a solid when it hits the water. Our research indicates that silver grain is widely sold in the jewelry trade for alloying with other metals.
Protestant entered the merchandise on March 31, 2008, under subheading 7106.91.10, HTSUS, which provides for: “Silver … unwrought or in semi manufactured forms …: Other: Unwrought: Bullion or dore.” U.S. Customs and Border Protection (“CBP”) liquidated the goods on September 26, 2008, under subheading 7106.91.50, HTSUS, which provides for: “Silver … unwrought or in semi manufactured forms …: Other: Other.” Protestant timely filed this protest and AFR on October 21, 2008.
ISSUE:
Is silver grain classified under subheading 7106.91.10, HTSUS, as unwrought, semi-manufactured silver bullion, or under subheading 7106.91.50, HTSUS, as other unwrought semi-manufactured silver articles?
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 all involved entries (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 No. 4601-08-102252 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the Protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee. Specifically, Protestant claims that the issue has been addressed by the U.S. Customs Court and the National Commodity Specialist Division of CBP, but has not been ruled upon by CBP Headquarters. Protestant cites Jarell-Ash Co. v. United States, 60 Cust. Ct. 65 (1968), New York Ruling Letter (“NY”) F81334, dated January 4, 2000 (bottle containing silver flakes in water classified as silver bullion in subheading 7106.91.10, HTSUS), and NY 829245, dated April 26, 1988 (gold dust and gold nuggets classified as bullion in subheading 7108.12.10, HTSUS), in support of his position.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods 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.
GRI 6 provides that the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to GRIs 1 through 5, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
The 2008 HTSUS provisions under consideration are as follows:
7106 Silver (including silver plated with gold or platinum), unwrought or in semimanufactured forms, or in powder form:
Other
Unwrought:
Bullion and dore …
7106.91.50 Other …
It is undisputed that silver grain is classified under heading 7106, specifically, in subheading 7106.90, HTSUS, as unwrought silver. See Additional U.S. Note to Chapter 71 (“the term ‘unwrought’ refers to metals, whether or not refined, in the form of … grains … and similar manufactured primary forms …”). At issue is the classification of the merchandise at the eight-digit subheading level, which is a GRI 6 level of analysis. Protestant contends that that silver grain constitutes “bullion” and is thereby classified under subheading 7106.91.10, HTSUS.
The term “bullion” is not defined in the tariff or in the legal notes. When a tariff term is not defined by the HTSUS or the legislative history, its correct meaning is its common, or commercial, meaning. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). "To ascertain the common meaning of a term, a court may consult 'dictionaries, scientific authorities, and other reliable information sources' and 'lexicographic and other materials.'" Id. (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271, 69 Cust. Ct. 128 (Cust. Ct. 1982); Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)).
In Jarell-Ash Co. v. United States, 60 Cust. Ct. 65 (Cust. Ct. 1968), the U.S. Customs Court considered the classification of, among other items, silver grain described as “extremely small, irregularly shaped pieces of … silver, which have no uniform longitudinal or latitudinal measurement.” The provision under consideration was paragraph 1638 of the Tariff Act of 1930, which exempted from duty “Bullion, gold or silver.” Id. n.2. The Court consulted several dictionary definitions before concluding that the common meaning of the term “bullion” is “uncoined gold or silver in the mass considered as so much metal without regard to any value imparted to it by its form.” Id. at 67. The Court further noted that “[n]ormally bullion is in the form of ingots, bars, plates and the like … [b]ut it may also consist of other forms or shapes so long as the form or shape does not impart value to the mass.” Id.
Silver grain constitutes silver in the mass, i.e., it has no value imparted to it by its form. Therefore, we find that the subject merchandise is “bullion,” as that term was defined in Jarell-Ash, and conclude that it is described by the terms of subheading 7106.91.10, HTSUS.
HOLDING:
By application of GRI 1 through the provisions of GRI 6, the silver grain is classified under heading 7106, HTSUS, specifically in subheading 7106.91.10, which provides in relevant part for: “Silver … unwrought …: Other: Unwrought: Bullion and dore.” The 2008 column one, general rate of duty is Free.
Since reclassification of the merchandise will result in a lower rate of duty than the liquidated rate, you are instructed to allow 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.
Sixty days from the date of the decision 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