OT:RR:CTF:EMAIN: H328959 PF
Matt Serrao
Felix Schoeller North America, Inc.
179 County Route 2A
Pulaski, New York 13142
RE: Request for Reconsideration of NY N327721; Tariff Classification of a Release Coating Line
Dear Mr. Serrao:
This is in response to your letter, requesting reconsideration of New York Ruling Letter ("NY") N327721, dated September 8, 2022 ("reconsideration request"). NY N327721 involved the classification of a release coating line. Upon review of NY N327721, we have determined the ruling to be correct. We are accordingly affirming the ruling.
NY N327721 provides the following description of the release coating line:
The "Coater 7" Release Coating Line is an interconnection of machines/apparatuses that performs coating of multiple substrates including paper, photo medical paper, PE-coated paper, PET film, and PE-coated PET film, using solvent-based and solvent-free silicone release agents. A release liner is a paper or plastic-based film sheet that is used to carry and prevent the sticky surface from adhering before its use. Silicone release liner substrates are used in a variety of products such as adhesive tapes and labels. The Line is imported unassembled and will include the full machinery line.
The Release Coating Line utilizes a system of rollers and controlled temperature and humidity changes to produce the finished goods. All machine line apparatuses are connected to a central control system. An unwinder brings the substrate rolls into the machine. Next, a high voltage discharge between an electrode and the substrate increases the substrate's surface energy, improving the adhesion of the coating onto the substrate. A printing apparatus applies a logo print on the back side of the substrate, while a printing dryer evaporates and dries the printing color. A coating station applies the coating mass onto the substrate using a coating roll. A dryer evaporates and cures the coating mass. Cooling rolls then reduce the coated substrate's temperature to prevent sticking on subsequent rollers. The substrate's edges are cut to required width, and humidity is applied to the substrate to prevent waviness. The substrates are then cooled and inspected. Finally, the substrates are rewound.
When imported together in one shipment in accordance with 19 C.F.R. 147.57 and 19 C.F.R. 141.58, the machines or apparatuses comprising the Release Coating Line are intended to contribute together to the clearly defined function of coating multiple substrates and, therefore, form one functional unit. See Note 4 to Section XVI.
In your reconsideration request, you allege that the release coating line is primarily used for finishing "paper" and classifiable in heading 8439, HTSUS, which provides for "Machinery for making pulp of fibrous cellulosic material or for making or finishing paper of paperboard (other than the machinery of heading 8419); parts thereof." In support of your reconsideration request, you provide marketing materials and a business plan that alleges that the release coating line will use paper-based substrates. However, the business plan also includes no-paper based substrates (Film, PET), which you claim is not the release coating line's primary use based on "current and future sales numbers." Notably, the business plan indicates that the release coating line has the capability to coat non-paper substrates.
Additional U.S. Rule of Interpretation 1(a), HTSUS, states in part that a classification controlled by use is to be determined by the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use. In this context, principal use is the period at or immediately prior to the date of importation. Future business plans or marketing strategies for the merchandise at issue in NY N327721 are not relevant to the determination of whether the goods belong to the class or kind of merchandise covered by heading 8439, HTSUS. As we determined in NY N327721, the release coating line is an interconnection of machines/apparatuses, that, in their condition as imported, are capable of performing coating of multiple substrates, including PE-coated paper, PET film, PE coated PET film and paper. Therefore, heading 8439, HTSUS is not applicable to the subject merchandise.
Heading 8479, HTSUS, and EN 84.79 provide for machines and mechanical appliances having individual functions, not specified, or included elsewhere in Chapter 84, HTSUS. The subject release coating line is not described by any other heading in Chapter 84, HTSUS. By operation of Note 4 to Section XVI, HTSUS, the release coating line is imported in one shipment and all its interconnected components contribute together to a clearly defined function. The clearly defined function of this machine is coating of various substrates. U.S. Customs and Border Protection has classified coating lines for various substrates in heading 8479. See, e.g., HQ H251210, dated Apr. 17, 2017 (coating line for coating various substrates with pre-melted adhesive).
Therefore, the subject release coating line is classifiable in heading 8479, HTSUS, and specifically subheading 8479.89.95, HTSUS, which provides for "Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other." The general, column one rate of duty for goods of subheading 8479.89.95 is 2.5 percent ad valorem.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. 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 on World Wide Web at https://hts.usitc.gov/current.
Based on the above, we hereby affirm NY N327721, dated September 8, 2022.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division