OT:RR:CTF:TCM H311223 ALS
Mr. Joseph Lazante
Port Director
U.S. Customs and Border Protection
4349 Woodson Road
St. Louis, Missouri 63134
Attn: Marian O. Suster, Import Specialist, Automotive Center
RE: Application for Further Review Protest No. 4503-19-100269; Tariff classification of a Selective Catalytic Reduction (“SCR”) catalyst block
Dear Ms. Suster:
This letter is in reply to an Application for Further Review (“AFR”) of Protest number 4503-19-100269, filed on behalf of Mitsubishi Power Americas, Inc. (also referred to herein as “Protestant”) on October 1, 2019. The Protest is against U.S. Customs and Border Protection’s (“CBP’s”) tariff classification of the above-referenced Selective Catalytic Reduction (“SCR”) catalyst block under subheading 8421.39.40 of the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The basic elements of the SCR catalyst unit consist of a stainless steel mesh support plate integrally coated on both sides with catalyst material, through the mesh for added adhesion. The active catalyst ingredients, which include active compounds of molybdenum trioxide, tungsten trioxide, vanadium dioxide, are included within a titanium dioxide base material. Upon heat-treating the base, it hardens and forms a solid bond to the mesh. SCR Catalyst blocks consist of catalyst elements and a steel frame, and the cross-section area for the unit is about one-half meter by one-half meter with a length depending upon the final customer specifications. The units are arrayed in blocks and imported as such. A typical block contains sixteen units of the catalyst unit. The SCR catalyst block is installed in large stationary catalytic systems processing fossil fuel combustion gases, such as those used in the steam generating and electrical power industry, petrochemical industry and large industrial heating devices, or more specifically a plate-type supported SCR catalyst block.
The Protestant entered the SCR catalyst blocks under subheading 3815.19.00, HTSUS, as other catalytic preparations. Your office liquidated the subject entries under subheading 8421.39.40, HTSUS, as other catalytic converters.
ISSUE:
Is the Selective Catalytic Reduction catalyst block, as described above, properly classified under heading 3815, HTSUS, which provides for “Reaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included”, or heading 8421, HTSUS, which provides for “Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof”?
LAW AND ANALYSIS:
Initially, we note that the Protest was timely filed on October 1, 2019, which is within 180 days of the date of the liquidation of the earliest subject entry, September 18, 2019. See 19 U.S.C. §1514(c)(3)(B). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. §1514(a)(2). Further Review of Protest No. 4503-19-100269 is properly accorded to the Protestant pursuant to 19 CFR 174.24(c) inasmuch as New York Ruling Letter (NY) N302483 (February 11, 2019) does not discuss the applicability of heading 3815, HTSUS, to the merchandise at issue in that ruling.
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order.
The following headings and subheadings of the HTSUS are under consideration in this case:
3815 Reaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included:
Supported catalysts:
3815.19.00 Other...
* * *
8421 Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof:
Filtering or purifying machinery and apparatus for gases:
8421.39 Other:
8421.39.40 Catalytic converters…
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. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The Protestant claims that the SCR block does not meet the description of heading 8421, HTSUS. Heading 8421 provides for, inter alia, filtering apparatus. There is no dispute that the catalyst function of the SCR block filters fossil fuel combustion gases of the machines in which it is installed. CBP has previously ruled in NY N302483 that a steel module frame made up of honeycomb and plate-type substrate/catalyst elements to be inserted upon importation into a catalytic converter system is to be classified under heading 8421, HTSUS.
Upon review, we find the subject SCR block to be very similar to the steel module frame of NY N302483 in that they both are steel structures containing and forming an array of catalysts or substrate/catalyst elements to be installed into a catalytic converter system that filters fossil fuel combustion gases. Furthermore, the ENs for heading 8421 state that heading 8421 includes “chemical filters and purifiers for air or other gases (including catalytic converters which change carbon monoxide in the exhaust gases of motor vehicles).” While we recognize that heading 3815 specifically provides for catalytic preparations, that heading also specifies that it is applicable when “not elsewhere specified or included”. In this respect, we note that the reference to GRI 3 in NY N302483 is dicta because this matter is controlled by GRI 1. With the SCR block being a steel frame forming an array of catalysts ready for installation upon importation, we find that it is “specified or included” under the provision for “filtering apparatus” under heading 8421, HTSUS. Specifically, the SCR block is properly classified under subheading 8421.39.40, HTSUS, which provides for “Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof: Filtering or purifying machinery and apparatus for gases: Other: Catalytic converters…”
HOLDING:
By application of GRIs 1 and 6, the Selective Catalytic Reduction catalyst block is classified under heading 8421, HTSUS, and specifically provided for under subheading 8421.39.40, HTSUS, which provides for “Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof: Filtering or purifying machinery and apparatus for gases: Other: Catalytic converters…” The general column one rate of duty, for merchandise classified in this subheading is Free.
Pursuant to U.S. Note 20(b) to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8421.39.40, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, an importer must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8421.39.40, HTSUS, noted above, for products of China.
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. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, 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,
Craig T. Clark, Director
Commercial and Trade Facilitation Division