OT:RR:CTF:CPMM H311151 RRB
TARIFF NO: 3815.19.0000; 9903.88.38
Center Director
Pharmaceuticals, Health & Chemicals Center for Excellence and Expertise
John F. Kennedy International Airport Building 77, 2nd Floor Jamaica, NY 11430
Attn: Jing Chen, Import Specialist, Pharmaceuticals, Health & Chemicals Center for Excellence and Expertise
Re: Protest and Application for Further Review of Protest No. 5301-20-103261; tariff classification of Unicat SR-110CX Zinc Oxide Adsorbent; application of Section 301 trade remedies
Dear Center Director,
The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 5301-20-103261, timely filed on April 14, 2020, by C.H. Robinson on behalf of Unicat Catalyst Technologies Inc. (“Protestant”). This AFR concerns U.S. Customs and Border Protection’s (“CBP”) classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of a zinc oxide adsorbent called Unicat SR-110CX.
FACTS:
The protested merchandise consists of a product called Unicat SR-110CX, a zinc oxide adsorbent, which is a product of China. It is a cylindrically shaped extruded material, which comes in various sizes, containing 60-70 percent zinc oxide. According to the Protestant’s website, Unicat SR-110CX is an “ultra-high porosity; high surface area zinc oxide adsorbent for the desulfurization of natural gas, off-gas, and other light hydrocarbon feed stocks in low temperature applications.” The commercial invoice for the merchandise also describes the merchandise as a zinc oxide catalyst. The Protestant also provided a Toxic Substances Control Act Certification, which identifies zinc oxide and aluminum oxide, but the certification does not specify what product it certifies.
On December 3, 2020, our office reached out to the Protestant for additional information regarding the Unicat SR-110CX. Specifically, we asked for the chemical composition breakdown of the product, the function of each ingredient, the manufacturing process, and use instructions. The Protestant provided the requested information in a follow-up email on December 7, 2020, stating that the Unicat SR-110CX is produced by blending zinc oxide (ZnO) powder with pseudo-boehmite and water, extruding the paste, calcining and drying. Calcining converts the pseudo-boehmite into alumina (Al2O3). Following this process, the final product consists of 70 percent zinc oxide (ZnO) powder, 25-27 percent alumina (Al2O3), and 2-3 percent silicon dioxide (SiO2). Water evaporates off the product during the drying process. According to the Protestant, the zinc oxide is an active substance functioning as an adsorbent material to remove sulfur from various hydrocarbon streams in industrial plants, while the alumina (Al2O3) is used for hydrolysis and as a support, and the silicon dioxide (SiO2) is used for surface area enhancement.
The protested merchandise consists of one (1) entry that was entered at the Port of Houston (“Port”) on November 21, 2018, and was liquidated on October 18, 2019, under subheading 2817.00.0000, HTSUSA (“Annotated”) (2018), as “zinc oxide.” At the time of entry, the protested merchandise was subject to Section 301 duties of 10 percent ad valorem under secondary tariff number 9903.88.03, HTSUS, as the merchandise was classified under subheading 2817.00.00, HTSUS and had a country of origin of China. See Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 47974 (September 21, 2018). Effective September 24, 2018, however, the United States Trade Representative (“USTR”) granted an exclusion from the Section 301 duties for “[s]upported catalysts with zinc oxide as the active substance (described in statistical reporting number 3815.19.0000).” See Notice of Product Exclusions: China’s Act, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 85 Fed. Reg. 6674 (February 5, 2020).
The Protestant filed this Protest and AFR on April 14, 2020, asserting that the Unicat SR-110CX is properly classified under subheading 3815.19.0000, HTSUSA (2018), as “[r]eaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included: [s]upported catalysts: [o]ther.” The Protestant also asserts that the Unicat SR-110CX satisfies the exclusion provision for supported catalysts with zinc oxide as the active substance (described in statistical reporting number 3815.19.0000), which is specifically provided for under section XXII, chapter 99, subchapter III, U.S. note 20(qq)(25), HTSUS, effective September 24, 2018, as follows:
(qq) The U.S. Trade Representative determined to establish a process by which particular products classified in heading 9903.88.03 and
provided for in U.S. notes 20(e) and (f) to this subchapter could be excluded from the additional duties imposed by heading 9903.88.03, . . . Pursuant to the product exclusion process, the U.S. Trade Representative has determined that the additional duties provided for in heading 9903.88.03 or in heading 9903.88.04 shall not apply to the following particular products, which are provided for in the enumerated statistical reporting numbers:
. . . .
(25) Supported catalysts with zinc oxide as the active substance (described in statistical reporting number 3815.19.0000).
The Protestant asserts that it is eligible to claim the secondary tariff number of subheading 9903.88.38, HTSUS, by virtue of failing under the scope of the above exclusion.
ISSUES:
Whether Unicat SR-110CX zinc oxide adsorbent is classified under subheading 2817.00.0000, HTSUSA, as “zinc oxide,” or under subheading 3815.19.0000, HTSUSA, as “[r]eaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included: [s]upported catalysts: [o]ther.”
Whether the Section 301 exclusion provision granted by USTR and provided for in U.S. note 20(qq)(25) to chapter 99, HTSUS, applies to Unicat SR-110CX, under the secondary tariff number of subheading 9903.88.38, 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 entry. See 19 U.S.C. § 1514(c)(3).
Further Review of Protest Number 5301-20-103261 was properly accorded to the 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 decided on by CBP or by the Customs courts.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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.
The 2018 provisions under consideration are as follows:
2817.00.0000 Zinc oxide; zinc peroxide. . .
3815 Reaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included:
Supported catalysts:
3815.11.0000 With nickel or nickel compounds as the active
substance. . .
3815.12.0000 With precious metal or precious metal compounds as
the active substance. . .
3815.19.0000 Other. . .
9903.88.03 Except as provided in headings 9903.88.13, 9903.88.18, 9903.88.33, 9903.88.34, 9903.88.35, 9903.88.36, 9903.88.37, 9903.88.38, 9903.88.40, 9903.88.41, 9903.88.43, 9903.88.45, 9903.88.46, 9903.88.48 or 9903.88.56, articles the product of China, as provided for in U.S. note 20(e) to this subchapter and as provided for in the subheadings enumerated in U.S. note 20(f). . .
9903.88.38 Articles the product of China, as provided for in U.S. note 20(qq) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative. . .
* * * *
Note 1 to chapter 28, HTSUS, provides, in pertinent part:
Except where the context otherwise requires, the headings of this chapter apply only to:
Separate chemical elements and separate chemically defined compounds, whether or not containing impurities;
The products mentioned in (a) above dissolved in water;
The products mentioned in (a) above dissolved in other solvents provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use;
The products mentioned in (a), (b) or (c) above with an added stabilizer (including an anticaking agent) necessary for their preservation or transport;
The products mentioned in (a), (b), (c) or (d) above with an added antidusting agent or a coloring substance added to facilitate their identification or for safety reasons, provided that the additions do not render the product particularly suitable for specific use rather than for general use.
Note 1(a) to chapter 38, HTSUS, provides, in pertinent part:
This chapter does not cover:
Separate chemically defined elements or compounds with the exceptions of the following:
Artificial graphite (heading 3801);
Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plant-growth regulators, disinfectants and similar products put up as described in heading 3808;
Products put up as charges for fire-extinguishers or put up in fire-extinguishing grenades (heading 3813);
Certified reference materials specific in note 2 below;
Products specified in note 3(a) or 3(c) below.
* * * *
The Explanatory Notes (“ENs”) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor 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, 35128 (Aug. 23, 1989).
The EN 38.15 states, in pertinent part:
This heading covers preparations which initiate or accelerate certain chemical processes . . .
These preparations fall broadly into two groups.
Those of the first group are, in general, composed either of one or more active substances deposited on a support (known as “supported catalysts”) (emphasis added) or of mixtures with a basis of active substances. In the majority of cases, these active substances are certain metals, metallic oxides, other metallic compounds or mixtures thereof. The metals most frequently used as such or as compounds are cobalt, nickel, palladium, platinum, molybdenum, chromium, copper or zinc. The support, sometimes activated, generally consists of alumina (emphasis added), carbon, silica gel, siliceous fossil meal or ceramic materials. Examples of “supported catalysts” are supported Ziegler or Ziegler-Natta types.
* * * *
Based on the description and specification sheet provided by the Protestant, the subject merchandise, Unicat SR-110CX, contains 60-70 percent zinc oxide. Pursuant to note 1(a) to chapter 28, HTSUS, products of chapter 28, HTSUS, must be pure chemical compounds, with the exception of the allowable additions mentioned in the chapter note. Thus, the substances that make up the remaining 30-40 percent of the Unicat SR-110CX’s composition would preclude classification of the merchandise in heading 2817, HTSUS. On the other hand, note 1(a) to chapter 38, HTSUS, excludes separate chemically defined elements or compounds with five exceptions, none of which are applicable here. As the protested merchandise is not a pure chemical compound, it is excluded from classification in chapter 28 and specifically in heading 2817.
Heading 3815, HTSUS, describes catalytic preparations not elsewhere specified or included. The EN 38.15 states that the heading covers preparations that initiate or accelerate certain chemical processes including preparations that are “composed either of one or more active substances deposited on a support (known as ‘supported catalysts’)” where “[i]n the majority of cases, these active substances are certain metals, metallic oxides, other metallic compounds or mixtures thereof” (emphasis added). In addition, the EN 38.15 specifically references zinc as a type of metal or metallic compound most frequently used as an active substance in catalytic preparations. Moreover, the EN 38.15 states that the support upon which the active substances are deposited generally consists of alumina.
In the instant matter, the Unicat SR-110CX is produced by blending zinc oxide powder, pseudo-boehmite, and water, extruding the paste, calcining and drying. Based on our research, the process described by the Protestant is the type that is normally used to manufacture supported catalysts such as the product at issue. In particular, the zinc oxide powder is the type of metallic compound described in the EN to 38.15. Moreover, the zinc oxide powder is an active substance functioning as an adsorbent material to remove sulfur from hydrocarbon streams. The alumina that is produced after the blending, paste extrusion and calcining and drying processes is used as a support upon which the zinc oxide is deposited. Alumina is specifically referenced in the EN to 38.15 as a type of support upon which active substances such as zinc oxide are generally deposited. Accordingly the Unicat SR-110CX meets the description of a catalytic preparation of heading 3815, HTSUS, and specifically, as a supported catalyst of subheading 3815.19.00, HTSUS, with zinc oxide as the active substance.
The Protestant also asserts that the Unicat SR-110CX is eligible for an exclusion from the Section 301 tariffs provided for in secondary tariff number 9903.88.38, HTSUS, and U.S. note 20(qq)(25) to subchapter III of chapter 99, which states that additional duties provided for in secondary tariff number 9903.88.03, HTSUS, shall not apply to “[s]upported catalysts with zinc oxide as the active substance (described in statistical reporting number 3815.19.0000).” We have determined that not only is the Unicat SR-110CX properly classified in subheading 3815.19.0000, HTSUSA, but it is also a supported catalyst with zinc oxide as the active substance with an alumina support. Therefore, the Unicat SR-110CX is not subject to Section 301 tariffs under secondary tariff number 9903.88.03, HTSUS, because it is eligible for the exclusion provided for in secondary tariff number 9903.88.38, HTSUS, subchapter III to chapter 99, U.S. note 20(qq)(25), HTSUS.
HOLDING:
By application of GRI 1 and 6, the Unicat SR-110CX is classified in heading
3815, HTSUS, and specifically in subheading 3815.19.0000, HTSUSA (2018), which provides for “Reaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included: Supported catalysts: Other.” The column one, general rate of duty at the time of entry was Free.
As a supported catalyst with zinc oxide as the active substance (described in statistical reporting number 3815.19.0000), the Unicat SR-110CX is eligible for exclusion from Section 301 duties under secondary tariff number 9903.88.38, HTSUS.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
You are instructed to GRANT 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 or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on the Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division