CLA-2 RR:CR:GC 960204 EAB
U.S. Customs Service
6 World Trade Center
New York, New York 10048
Re: Protest 1001-96-105851 concerning refined naphthalene 80.1 degrees Celsius; harbor maintenance fee; HMF
Dear Port Director:
This is our decision on protest 1001-96-105851, timely filed July 31, 1996, against your decision in the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of merchandise entered October 6, 1995.
Merchandise described on Customs Form 7501 (Entry Summary) as “NAPHTHALENE OILS” was entered in subheading 2707.40.0000, HTSUS, the provision for oils and other products of the distillation of high temperature coal tar: “Naphthalene”.
The product was invoiced on occasion as “NAPHTHALENE 80" or as “NAFTALINE 80+”, which is a reference to a crystallization point of no less than 80 oC.
Following a Notice of Action (CUSTOMS FORM 29) dated April 16, 1996, Customs classified the merchandise in subheading 2902.90.9000, HTSUS, the residual provision for cyclic hydrocarbons, and liquidation of the entry of the merchandise followed properly thereafter.
The importer seeks reclassification in either subheading 2707.40.0000, HTSUS, as aforesaid, or in subheading 2902.90.2000, HTSUS, the provision for:
2902 Cyclic hydrocarbons:
2902.90.20 Acenaphthene, chrysene, cymene, dimethylnaphthalenes, fluoranthene, fluorene, indene, mesitylene, methylanthracene, methylnaphthalene, phenanthrene and pyrene
In addition to the reclassification of the merchandise, protestant alleges that “the assessment of Harbor Maintenance Fee (‘HMF’) is illegal and unconstitutional,” and, apparently, seeks refund of the harbor maintenance fee “as to all merchandise”.
Whether the merchandise is classifiable as a coal tar distillate of chapter 27, or as a separate chemically defined organic compound (whether or not containing impurities) of chapter 29; if the latter, whether the product is classified with similar compounds specifically provided for, or residually, and, in any event, whether the HMF may be refunded.
LAW AND ANALYSIS:
A. Heading 2707 v. heading 2902
Merchandise imported into the U.S. 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 otherwise requires, 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 Explanatory Notes to the Harmonized Commodity Description and Coding System [Explanatory Notes or ENS], including the Subheading Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading and certain subheadings of the HTSUS, and are generally indicative of the proper interpretation of such headings and subheadings. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Heading 2707, HTSUS, provides in part as follows:
2707 Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the nonaromatic constituents:
Legal Note 1(a), chapter 27, HTSUS, provides in part that chapter 27 “does not cover . . . separate chemically defined organic compounds, other than [products not germane to this decision]”.
Subheading Note 3, chapter 27, HTSUS, provides in part as follows:
For the purposes of [subheading] 2707.40 . . ., the [term] “naphthalene” . . . [applies] to products which contain more than 50 percent by weight of . . . naphthalene . . . .
Protestant claims that, pursuant to GRI 1, the eo nomine language enumerated at subheading 2707.40, HTSUS, together with Subheading Note 3 to chapter 27, present “statutory language [that] is clear and unambiguous [and] there is no need to reference any outside [i.e. interpretative] sources; including the Explanatory Notes.” See memorandum filed in behalf of protestant, “Schedule ‘A’” [Sch. A], p. 3, attached to PROTEST (CUSTOMS FORM 19).
The foregoing would be an applicable statement of a general principal of the law of statutory construction, if not flawed by the disregard of Legal Note 1(a) to the chapter: reference to the ENs must be had in order to determine when a “naphthalene” product contains so much more than 50 percent by weight of naphthalene that it is no longer a product of chapter 27, but a separate chemically defined organic compound of chapter 29.
EN 27.07 provides in part as follows:
The heading includes the oils and products referred to above whether crude or refined, but it excludes separate chemically defined compounds in the pure or commercially pure state obtained by further fractionation or by other processing of tar oils (Chapter 29). For . . . naphthalene . . ., there are specific purity criteria, indicated in the relevant parts of Explanatory Note 29.02 . . . [emphasis in original].
EN 29.02 provides as follows with specific regard to naphthalene:
(III) Hydrocarbons with two or more benzene rings fused.
(a) Naphthalene (C10H8). Results from the fusion of two benzene rings. It occurs in coal tar, in petroleum oils, in coal gas, in lignite tar, etc. It crystallises in fine white flakes, with a characteristic odour.
To fall in this heading, naphthalene must have a crystallising point of 79.4 oC or more. Naphthalene of lower purity is excluded (heading 27.07).
Counsel for the protestant argues that the foregoing ENs
. . . must be read in conjunction with one another. Accordingly, in order to be excluded from chapter 27, naphthalene must be, in addition to meeting a purity requirement, further fractionated or obtained by other processing of tar oils. . . . Accordingly, only if naphthalene is ‘pure or commercially pure’ and ‘further fractionated or by other processing of tar oils,’ are we directed to proceed to a consideration of Explanatory Note 29.02, which informs us that for inclusion in heading 2902, HTSUS, naphthalene must have a crystallizing point of 79.4 C or more. The use of 79.4 C, in this context, is clearly meant to be applied as a minimum figure (crystallizing point) which naphthalene must meet for inclusion in chapter 29. It is neither the sole measure for inclusion in the chapter, nor does it suggest that if 80.1 C is not considered ‘commercially pure’ that the product is excluded from chapter 27. It merely means that if the product is ‘commercially pure’ and ‘further fractionated or obtained by other processing of tar oils’ it must also have a crystallizing point above 79.4 C to be included in chapter 29.
Sch. A, p. 10.
We disagree. Read in pari materia, ENs 27.07 and 29.02 complement Legal Note 1(a) and Subheading Note 3, chapter 27, supra, and Legal Note 1(a), chapter 29, HTSUS, which provides that the headings of chapter 29 apply only to separate chemically defined organic compounds, whether or not containing impurities. Certain naturally occurring petroleum mixtures, such as coal tar oils, having been subjected to common commercial processes, may be classified in one or the other of chapter 27 or chapter 29, according to certain physical characteristics of a given constituent material in the mixture. Thus, coal tar oils of chapter 27 are classified in various subheadings of heading 2707, depending upon the presence of no less than 50 % by weight of a given constituent organic compound, such as naphthalene; however, coal tar mixtures containing so much of, for example, a cyclic hydrocarbon identified as naphthalene, such that the mixture undergoes a phase change (crystallization at 79.4 oC), are classified in heading 2902, HTSUS, the remainder of the constituent compounds in the mixture being deemed, for classification purposes, “impurities” allowed by Legal Note 1(a), chapter 29.
We are of the opinion that the phrase “further fractionated or obtained by other processing of tar oils” is not a de jure requirement of classification under one or the other of heading 2707 or 2902, HTSUS, but a de facto reference to commercial practices. We are of the further opinion, however, that the crystallization point set out in EN 29.02 is a legal requirement for classification of petroleum products that are concentrated or purified beyond only the “crude” state allowed for products of chapter 27; i.e., naturally occurring petroleum mixtures are classified depending upon the presence and thereafter the phase transition characteristically imparted by the targeted component.
We find that the merchandise, a naphthalene product having a crystallizing point of 80.1 oC, is not a product of heading 2707, HTSUS, but one of heading 2902, HTSUS.
B. Subheading 2902.90.2000 v. subheading 2902.90.9000
Counsel argues that the merchandise is classifiable in subheading 2902.90.2000, HTSUS, rather than in the residual provision enumerated at 2902.90.9000, HTSUS, by application of GRI 4.
. . .Subheading 2902.90 provides, at the legal 6 digit level, for “other.” The heading is further broken out at the statistical 10 digit levels (2902.90.1000 and 2902.90.2000, HTSUS). Subheading 2902.90.2000, HTSUS lists a number of Cyclic hydrocarbons including methylnaphthalene, which is a component of the subject merchandise. Subheading 2902.90.9000 provides for “other . . . other.” However, neither of these subheadings prima facie classify the merchandise. Therefore, resort to GRI 4 is required and, consequently, the subject naphthalene should be classified in the subheading with those goods to which it is most akin. In this case, the goods to which the subject merchandise is most akin are among the enumerated Cyclic hydrocarbons in 2902.90.20, HTSUS, of which one of the merchandises’s components (methylnaphthalene) is listed. While such a non-exhaustive listing of chemicals at the statistical level is not considered legally binding, it does suggest the kind of chemicals that are covered by the legal 6 digit superior subheading 2902.90, HTSUS. Accordingly, assuming, arguendo, that the subject merchandise is classifiable in chapter 29, subheading 2902.90.20, HTSUS, is the subheading including goods which are most akin to the subject merchandise and, as such, is the proper classification subheading for the merchandise.
Sch. A, p. 14.
Our first response to the foregoing argument is predicated upon comparing the relevant language in EN 29.02 and the terms of subheading 2902.90.2000, HTSUS. In that the ENs are interpretative aids regarding the scope of the corresponding headings of the HTSUS, we are of the opinion that the discussion of naphthalene in EN 29.02 is intended to alert the reader that, when not classifiable under heading 2707, HTSUS, “naphthalene”, not specifically identified in the sparse, yet express terms of heading 2902 (“cyclic hydrocarbons”), is to be classified in one of the subheadings of heading 2902, HTSUS. We observe that the authors of EN 29.02 took pains to discuss in relative detail “naphthalene,” “phenanthrene” and “anthracene,” while merely noting that “This group [characterized as hydrocarbons with two or more benzene rings fused] also includes the following hydrocarbons: (1) acenaphthene (2) methylanthracenes (3) fluorene (4) fluoranthene [and] (5) pyrene.” The statute, however, at subheading 2902.90.2000, HTSUS, sets out a notably different list:
Acenaphthene, [and] chrysene, [plus] cymene, [also] dimethylnaphthalenes, fluoranthene, fluorene, [and] indene, [and] mesitylene, methylanthracene, [also] methylnaphthalene, [and] phenanthrene and pyrene
but not naphthalene. It is our opinion that the listing of twelve (12) specific organic compounds is a clear announcement of legislative intent for purposes of classification of merchandise in subheading 2902.90.2000, HTSUS, i.e., that only the twelve “hydrocarbons with two or more benzene rings fused” listed at 2902.90.2000, HTSUS, are to be classified there. All other “hydrocarbons with two or more benzene rings fused” are to be classified subsequently in numerical order according to the terms of the subheadings. In this regard we note with particularity that “anthracene”, discussed at the same place in EN 29.02 as is “naphthalene,” is expressly provided for, not in 2902.90.2000, HTSUS, but in 2902.90.4000, HTSUS. Strictly construing the statute, we are of the opinion that, “naphthalene”, being not included in that lengthy list, is not classifiable in subheading 2902.90.2000, HTSUS.
We find that the merchandise in this case was properly classified in subheading 2902.90.9000, HTSUS.
II. Harbor Maintenance Fee
The liquidation of a consumption entry which includes assessment of harbor maintenance fees is a protestable decision. See 19 U.S.C. 1514(a)(5) and 26 U.S.C. 4462(f). The statutory authority for the HMF is found in the Water Resources Development Act of 1986 (Pub. L. 99-662, 100 Stat. 4082, 4266, 26 U.S.C. 4461 et seq.). Under this statute, a fee is imposed for the use of a port, defined as any channel or harbor or component thereof in the United States which is not an inland waterway, is open to public navigation, and at which federal funds have been used since 1977 for construction, maintenance, or operation.
The HMF is not a “duty”; however, except as otherwise provided in regulations, all administrative and enforcement provisions of the Customs laws and regulations apply in respect to the HMF as if it were a duty. 26 U.S.C. 4462(f).
Protestant has failed to articulate any grounds for finding that the HMF is illegal and unconstitutional, and has not offered any facts or explanation of facts as justification for the objection to the assessment of the HMF.
Naphthalene with a crystallization point of 79.4 oC or more is classifiable in subheading 2902.90.9000, HTSUS, the provision for “Cyclic hydrocarbons: Other: Other”.
Assessment of the harbor maintenance fee was in accordance with law and regulations.
The protest should be DENIED. In accordance with section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1992, Subject: Revised Protest Directive, 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.
Sixty days from the date of this decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
[Marvin Amernick, for]
John A. Durant, Director Commercial Rulings Division