• HQ H074375
• Nov 22, 2010

• Type : Classification • HTSUS : 3909.50.50
•  Related:   06096; 100006; 35127; 957194; 082365; 957358; 957359; N027053   

CLA-2 OT:RR:CTF:TCM H074375 CKG

Port Director
U.S. Customs and Border Protection
Bradley International AirportInternational Arrivals BuildingWindsor Locks, CT 06096

RE: Application for Further Review of Protest Number 0411-09-100006; classification of Patelacol IJ-30 polyurethane resin

Dear Port Director,

This is in reply to your correspondence forwarding Application for Further Review (AFR) of Protest No. 0411-09-100006, filed on June 17, 2009, on behalf of Esprix Technologies, Inc.

The subject merchandise was entered on September 15, 2008, at the Port of Hartford. CBP liquidated the entries on January 9, 2009, in subheading 3909.50.50, HTSUS. Protestant claims classification in subheading 3909.50.20, HTSUS, as a polyurethane cement, and the existence of an established and uniform practice by CBP with respect to the classification of substantially similar merchandise in subheading 3909.50.20, HTSUS.

FACTS

Patelacol IJ-30 is a polyurethane resin in aqueous dispersion, designed for use as a dye fixing agent for use on ink jet printer paper. The coating is applied to inkjet paper and dried for 1 to 3 minutes at 110-120 degrees Celsius, forming a porous, water-resistant layer. When ink is applied to the paper, it is absorbed via the micropores in the resin coating, which swells and encapsulates the ink. This process prevents the ink from spreading.

ISSUE:

Whether Patelacol IJ-30 is classified in subheading 3909.50.20, HTSUS, as a polyurethane cement, or in subheading 3909.50.50, HTSUS, as an “other” polyurethane.

LAW AND ANALYSIS:

Initially, we note that the matter protested 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 of the first entry on November 17, 2006. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).

Further Review of Protest No. 0411-09-100006 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24 because the decision against which the protest was filed involves specific factual and legal questions that have not been the subject of a Headquarters ruling or court decision.

Classification

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 HTSUS provisions under consideration are as follows:

3909: Amino-resins, phenolic resins and polyurethanes, in primary forms:

3909.50: Polyurethanes:

3909.50.20: Cements ….

3909.50.50: Other….

* * * * The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the HTSUS. While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).

EN 39.09 provides, in pertinent part, as follows: (3)   Polyurethanes This class includes all polymers produced by the reaction of polyfunctional isocyanates with polyhydroxy compounds, such as, castor oil, butane1,4diol, polyether polyols, polyester polyols. Polyurethanes exist in various forms, of which the most important are the foams, elastomers, and coatings. They are also used as adhesives, moulding compounds and fibres.  These products are often traded as one part of a multi-component system or set.” * * * * Protestant alleges that the instant merchandise is a polyurethane cement of subheading 3909.50.20, HTSUS. There is no dispute that the merchandise is classified in heading 3909, HTSUS, as a polyurethane in primary form. At issue is the proper eight-digit classification, which requires the application of GRI 6. GRI 6 requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable.

The term “cement” is not defined in the HTSUS or its legislative history. It is also not defined in any of the chapters or section notes at issue. When a tariff term is not defined, the term’s correct meaning is presumed to be its common meaning in the absence of evidence to the contrary. See Rohm & Haas Co. v. United States, 727 F.2d 1095 (CAFC 1984). The courts have considered the common meaning of “cement” under the HTSUS. In Naftone, Inc. v. United States., 74 Cust. Ct. 1, C.D. 4578 (1975), the Customs Court defined a “cement” as “a substance which is specifically designed for the cementing of materials to each other and which, in its imported condition, can accomplish that purpose.” The Naftone Court further cites to the definition of cement set out in Norton and Ellis, Inc. v. United States, 52 Cust. Ct. 76, C.D. 2440 (1964), as follows: “any substance used by men or animals for making bodies adhere to each other.” In addition, the Merriam Webster online dictionary defines “cement” as “a binding element or agency: as a : a substance to make objects adhere to each other.” The Cambridge online dictionary similarly calls cement “a substance which sticks things together.”

Protestant claims that the instant merchandise is a cement pursuant to the above definitions because it binds to the inkjet printer paper, as well as binding the ink to the paper.

However, the resin is not used or designed for cementing materials or bodies to each other. The polyurethane resin is an adhesive substance, and thus adheres to the paper. The protestant also describes the chemical reaction between the cationic (consisting of positively charged molecules) resin and anionic (negatively charged) ink as similar to a chemical reaction forming an ionic complex. Chemical adhesion occurs when the surface atoms of two separate surfaces form ionic bonds. Therefore, the resin appears to adhere to the ink. However, it is unclear that the resin is causing the ink to adhere to the paper; the paper absorbs the ink regardless of the presence of the resin coating. The coating simply encapsulates and thus fixes the ink in place, which prevents the ink from bleeding or smearing and allows for quick drying. Furthermore, it is clear that the cited Customs Court decisions as well as prior CBP rulings use the term “cement” in a specific context—that of adhering solid bodies to each other. See also HQ 957194, dated April 7, 1995; HQ 082365, dated March 30, 1989; and NY N027053, dated May 29, 2008 (in which CBP declined to classify a polyurethane resin as a cement in subheading 3909.50.20, HTSUS, because it was used as a binder for waterborne coatings, and not as an adhesive). Protestant has provided no evidence that the term “cement” encompasses dye or ink fixing.

There is also no evidence that polyurethane resins in general are principally used as adhesives. Other common uses of polyurethane resins include foam insulation and upholstery, as well as abrasion-resistant coatings.

Established and Uniform Practice

Protestant further argues that there was an established and uniform practice of classifying its goods under subheading 3909.50.20, HTSUS, and that CBP has failed to comply with the requirements of 19 U.S.C. 1315(d) which concerns the effective date of administrative rulings resulting in higher rates. Section 1315(d) provides as follows: No administrative ruling resulting in the imposition of a higher rate of duty or charge than the Secretary of Treasury shall find to have been applicable to imported merchandise under an established and uniform practice shall be effective with respect to articles entered for consumption or withdrawn from warehouse for consumption prior to the expiration of thirty days after the date of publication in the Federal Register of notice of such ruling.

Title 19 of the Code of Federal Regulations (CFR) sets forth the evidentiary standards for a finding of established and Uniform Practice. 19 CFR 177.12 provides, in pertinent part, as follows:

§ 177.12 Modification or revocation of interpretive rulings, protest review decisions, and previous treatment of substantially identical transactions. … (c) Treatment previously accorded to substantially identical transactions -- (1) General. The issuance of an interpretive ruling that has the effect of modifying or revoking the treatment previously accorded by Customs to substantially identical transactions must be in accordance with the procedures set forth in paragraph (c)(2) of this section. The following rules will apply for purposes of determining under this section whether a treatment was previously accorded by Customs to substantially identical transactions of a person: (i) There must be evidence to establish that: (A) There was an actual determination by a Customs officer regarding the facts and issues involved in the claimed treatment; (B) The Customs officer making the actual determination was responsible for the subject matter on which the determination was made; and (C) Over a 2-year period immediately preceding the claim of treatment, Customs consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other Customs actions with respect to all or substantially all of that person's Customs transactions involving materially identical facts and issues; (ii) The determination of whether the requisite treatment occurred will be made by Customs on a case-by-case basis and will involve an assessment of all relevant factors. In particular, Customs will focus on the past transactions to determine whether there was an examination of the merchandise (where applicable) by Customs or the extent to which those transactions were otherwise reviewed by Customs to determine the proper application of the Customs laws and regulations. For purposes of establishing whether the requisite treatment occurred, Customs will give diminished weight to transactions involving small quantities or values, and Customs will give no weight whatsoever to informal entries and to other entries or transactions which Customs, in the interest of commercial facilitation and accommodation, processes expeditiously and without examination or Customs officer review; … (iv) The evidentiary burden as regards the existence of the previous treatment is on the person claiming that treatment. The evidence of previous treatment by Customs must include a list of all materially identical transactions by entry number (or other Customs assigned number), the quantity and value of merchandise covered by each transaction (where applicable), the ports of entry, the dates of final action by Customs, and, if known, the name and location of the Customs officer who made the determination on which the claimed treatment is based. In addition, in cases in which an entry is liquidated without any Customs review (for example, the entry is liquidated automatically as entered), the person claiming a previous treatment must be prepared to submit to Customs written or other appropriate evidence of the earlier actual determination of a Customs officer that the person relied on in preparing the entry and that is consistent with the liquidation of the entry.

* * * * In the instant case, protestant alleges that since 2001, seven different ports have liquidated as many as 21 entries by Esprix of similar or identical merchandise in subheading 3909.50.20, HTSUS. Protestant further points to two ruling letters, HQ 957358 and HQ 957359, both issued on August 22, 1995, classifying polyurethane binders as cement of subheading 3909.50, HTSUS. However, both of these rulings classified polyurethane binders in subheading 3909.50.50, HTSUS, as an “other” polyurethane. Neither ruling classified the products at issue as polyurethane cements of subheading 3909.50.20, HTSUS. And as noted above, CBP has declined to classify polyurethane resins as cements when used as binders or carrier for coatings. See NY N027053, dated May 29, 2008.

Protestant, furthermore, provides no evidence beyond the entry or invoice numbers of the merchandise which it claims is similar or identical to the product at issue. Nor was any evidence provided regarding quantity or value, dates of final action, examination by a Customs officer, or other evidence that an actual determination was made regarding the facts or issues involved in the claimed treatment. As noted in 19 CFR 177.12(c)(ii), CBP will give no weight whatsoever to informal entries and to other entries or transactions which Customs, in the interest of commercial facilitation and accommodation, processes expeditiously and without examination or Customs officer review. Pursuant to 19 CFR 177.12(c)(iv), the person claiming a previous treatment must be prepared to submit to Customs written or other appropriate evidence of the earlier actual determination of a Customs officer that the person relied on in preparing the entry and that is consistent with the liquidation of the entry. In the absence of such evidence, we decline to find that an established and uniform practice classifying identical or similar merchandise in subheading 3909.50.20, HTSUS, was in effect at the time of entry or liquidation of the subject merchandise in subheading 3909.50.50, HTSUS.

HOLDING:

By application of GRIs 1 and 6, Patelacol IJ-30 is classified in heading 3909, HTSUS, specifically subheading 3909.50.50, which provides for “Amino-resins, phenolic resins and polyurethanes, in primary forms: Polyurethanes: Other.” The 2008 general, column one rate of duty is 6.3% ad valorem.

Liquidation of the subject entries in subheading 3909.50.50, HTSUS, was not in violation of any established and uniform practice by CBP with respect to the classification of substantially similar merchandise in subheading 3909.50.20, HTSUS.

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 Customs 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 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 Harmon, Director,
Commercial and Trade Facilitation Division