CLA-2 OT:RR:CTF:TCM H026743 ARM
Port Director
U.S. Customs and Border Protection
726 Exchange Street, Suite 400 Buffalo, NY 14210
RE: Mixed Metal Hydroxide D/25/450; Protest and AFR #0901-08-100005
Dear Port Director:
The following is our decision regarding Protest and Application for Further Review #0901-08-100005, timely filed on January 10, 2008, regarding the classification of mixed metal hydroxide, under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The protest describes one entry of mixed metal hydroxide, on October 25, 2007, under subheading 2825.40.00, HTSUS, the provision for nickel oxides and hydroxides. CBP issued a Notice of Action on December 5, 2007, informing the protestant of liquidation of the merchandise in subheading 2853.00.00, HTSUS, the provision for other inorganic compounds, at a 2.8% ad valorem rate of duty. Protestant now claims that the merchandise is described in subheading 3824.90.39, HTSUS, the provision for chemical products and preparations of the chemical or allied industries not elsewhere specified or included.
Protestant claims that mixed metal hydroxide (MMH) is composed of nickel hydroxide, CAS# 12054-48-7, and cobalt hydroxide, CAS#21041-93-0. The proportion of the two components in relation to each other varies from shipment to shipment within a 70-90% range for nickel hydroxide and a 10-30% range for cobalt hydroxide. The merchandise is used as a precursor for manufacturing cathodes of lithium rechargeable batteries.
However, CBP Laboratory report SF20082079, dated February 6, 2009, states, in pertinent part, the following:
The foregoing elemental composition was qualitatively confirmed by energy dispersive X-ray spectrometric analysis in a scanning electron microscope (EDS/SEM). X-ray diffraction (XRD) analysis of this substance yields a pattern that is essentially identical to that of Ni(OH)2. The number of diffraction maxima (peaks) and their relative intensities are essentially the same as Ni(OH)2. This indicates that the sample is a single chemical compound of variable composition rather than a mixture of Ni(OH)2 and Co(OH)2. XRD analysis of a mixture of two separate (crystalline) chemical compounds should yield a pattern containing peaks due to both compounds. That is, there would be approximately twice the number of peaks that we obtained from this sample. This was confirmed by XRD analysis of a mixture of approximately 80 percent Ni(OH)2 and 20 percent Co(OH)2. Approximately twice the number of peaks were obtained from this sample as were found with either the sample, Ni(OH)2, or Co(OH)2.
We found similar results in a review of technical literature that included XRD studies of mixed Ni - Co hydroxide. In the Journal of Metastable and Nanocrystalline Materials, 22, 1, (2004), Boyer, et al, stated
“We observe the presence of only one major peak for each sample, that ensures us the synthesis of a real mixed hydroxide, Ni1-xCox(OH)2 and not the coexistence of two mineral phase hydroxides Ni(OH)2 and Co(OH)2.”
ISSUE:
Whether MMH is a separate chemically defined compound of Chapter 28, HTSUS, or a chemical preparation of Chapter 38, HTSUS?
LAW AND ANALYSIS:
The protest was properly filed as a decision on classification under 19 U.S.C. §1514(a)(2). The protest was timely filed within 180 days of liquidation of the first entry for entries made on or after October 25, 2007. (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 #0901-08-100005 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision is alleged to be inconsistent with judicial precedent in MetChem, Inc. v. United States, 441 F. Supp. 2d 1269 (Ct. Int’l Trade 2006) (aff’d CAFC January 22, 2008) and USR Optonix, Inc. v. U.S., 29 C.I.T. 229; 362 F. Supp. 2d 1365; 27 Int'l Trade Rep. (BNA) 1413; 2005 Ct. Intl, (CIT 2005).
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
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.
The HTSUS subheadings under consideration are as follows:
2853.00.00 Other inorganic compounds (including distilled or conductivity water and water of similar purity); liquid air (whether or not rare gases have been removed); compressed air; amalgams, other than amalgams of precious metals
* * * * *
3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included (con.):
3824.90 Other:
Other:
Mixtures of two or more inorganic compounds:
3824.90.39 Other
Chapter 28, Note 1 states, in pertinent part, the following:
1. Except where the context otherwise requires, the headings of this chapter apply only to:
(a) Separate chemical elements and separate chemically defined compounds, whether or not containing impurities;
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The ENs to Chapter 28 state, in pertinent part, the following:
GENERAL
Unless the context otherwise requires, Chapter 28 is limited to separate chemical elements and separate chemically defined compounds.
A separate chemically defined compound is a substance which consists of one molecular species (e.g., covalent or ionic) whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram. In a crystal lattice, the molecular species corresponds to the repeating unit cell.
The elements of a separate chemically defined compound combine in a specific characteristic proportion determined by the valency and the bonding requirements of the individual atoms. The proportion of each element is constant and specific to each compound and it is therefore said to be stoichiometric.
Small deviations in the stoichiometric ratios can occur because of gaps or insertions in the crystal lattice. These compounds are described as quasi-stoichiometric and are permitted as separate chemically defined compounds provided that the deviations have not been intentionally created.
* * * * *
(C) Products which remain classified in Chapter 28, even when they are not separate chemical elements nor separate chemically defined compounds.
There are certain exceptions to the rule that this Chapter is limited to separate chemical elements and separate chemically defined compounds. These exceptions include the following products :
* * * *
Heading 28.53 Liquid air and compressed air.
Amalgams other than amalgams of precious metals see under heading 28.43 above.
In MetChem, Inc. v. United States, 513 F.3d 1342, (Fed. Cir. 2008), (affirming 441 F. Supp. 2d 1269 (Ct. Int’l Trade 2006)), the court stated, in pertinent part, the following:
A material consisting of several chemical compounds in a variable ratio—particularly one that is variable because of the specific details of the process by which the material is made—is not a separate chemically defined compound because it cannot be represented by a precise formula. Therefore, the subject merchandise is not a separate chemically defined compound. See also Hawley’s Condensed Chemical Dictionary 289 (14th ed. 2001) (defining “compound” as “a homogenous entity where the elements have definite proportions by weight and are represented by a chemical formula”).
Id. at 1347.
The instant merchandise is not “a material consisting of several chemical compounds in a variable ratio” as the court describes in Metchem. Rather, it is a non-stoichiometric, or in the terminology of the EN, a quasi-stoichiometric separate chemical compound whose composition varies in a continuous manner over a narrow range represented by Ni1-x CoX (OH)2 where the X represents the deviation from the ideal stoichometric formula. See CBP Laboratory Report SF20082079. There is no evidence that the deviations have been intentionally created. This is further supported by the x-ray diffraction analysis and technical literature.
In USR Optonix, Inc. v. U.S., 29 C.I.T. 229; 362 F. Supp. 2d 1365; 27 Int'l Trade Rep. (BNA) 1413; 2005 Ct. Intl, (CIT 2005), the court held that a mixture of yittrium oxide and europium oxide was properly classified in heading 2846, HTSUS, which provides for “compounds, inorganic or organic of rare earth metals, of yittrium or of scandium, or of mixtures of these metals: . . .”, because the term “compounds” as used in heading 2846, HTSUS, has a broader meaning than the more specific term “separate chemically defined compounds”. Specifically, the court noted that the General EN to Chapter 28 states that heading 2846, HTSUS, is a specified exception to the general rule set forth in Chapter Note 1(a); the terms of the subheading refer to “mixtures of rare earth oxides or of rare-earth chlorides”; and the EN to heading 2846, HTSUS, states that some products can be described as “mixtures of oxides or hydroxides of these elements.” Id.
As previously stated, the instant merchandise is specifically described by Chapter note 1 to Chapter 28 as a separate chemically defined compound and by heading 2853 as an other inorganic compound. Inasmuch as the merchandise is classified in heading 2853, HTSUS, it cannot be classified in Chapter 38, HTSUS.
HOLDING:
At GRI 1, the instant MMH is classified in heading 2853, HTSUS, specifically in subheading 2853.00.00, HTSUS, which provides for: “Other inorganic compounds (including distilled or conductivity water and water of similar purity); liquid air (whether or not rare gases have been removed); compressed air; amalgams, other than amalgams of precious metals.” The column 1, “General” duty rate in effect at the time of entry was 2.8% ad valorem. 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of this letter, the Office of International Trade will make this letter 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