CLA-2-39:OT:RR:NC:N4:421
Mr. Kevin Sullivan
Baker & McKenzie LLP
815 Connecticut Avenue NW
Washington, DC 20006
RE: The tariff classification of cement plugs from Canada
Dear Mr. Sullivan:
In your letter dated January 2, 2013, on behalf of Top-Co Inc., you requested a tariff classification ruling.
The cement plugs are used during the casing and cementing of an oil or gas well. Casing a well involves lining the drilled wellbore with the casing pipe through which oil and gas will be brought to the surface. To keep the casing pipe stabilized in the wellbore, it is cemented into position with the aid of cement plugs. When the initial depth of boring has been completed and the first section of casing pipe has been lowered into the wellbore, a cement plug, referred to as the bottom plug, is put into the casing pipe. The flanges of the plug wipe the inside of the casing pipe of any drilling mud or debris as it is pushed down into the pipe. The plug forms a temporary seal at the bottom of the drilled section. Cement is then pumped into the casing at a high enough pressure so that it ruptures a small diaphragm in the bottom plug, allowing the cement to flow through the plug, out through the bottom of the casing pipe and into the space between the outer wall of the casing pipe and the wall of the wellbore. A second cement plug, referred to as the top plug, is lowered into the casing pipe and pushed down by the drilling mud. As the top plug is pushed down the casing pipe, it too wipes the inside of the casing pipe and further forces the cement in the casing out into the space between the outer casing wall and the wall of the wellbore. When the top plug reaches the bottom plug, the cement is left to harden before drilling operations resume. The cup design on the top and bottom of both plugs provides a secure seal against the casing wall to prevent mixing of the cement slurry with the displacement fluid. The top plug seals into the bottom plug to enhance the fluid separation seal. Once the cement has set, drilling continues through the cement plugs down to the next specified depth, where the process is repeated until the final depth of the well is reached and the final casing pipe is cemented into place. The literature included with your request states that the plugs also provide a seal on top of the float collar allowing for pressure testing after plug landing.
Item T547/548 KWIK Drill-Plug is a top and bottom plug set composed of polyurethane or silicone plastic with a polymer core. Item T252/253 Standard Plug is a top and bottom plug set composed of either natural rubber or nitrile butadiene synthetic rubber with a plastic core.
Although you are not suggesting classification as parts of drilling equipment, you have provided a copy of an advance ruling issued by the Canada Border Services Agency classifying both plastic and rubber cement plugs as parts of boring or sinking machinery in heading 8431 of the Canadian Customs Tariff. Please note that Treasury Decision (T.D.) 89-80, "Guidance For Interpretation of Harmonized System" (54 FR 35127), states that U.S. Customs is not bound to abide by another country's rulings and that they are merely instructive of how other countries may classify like goods. While the Harmonized Tariff Schedule seeks uniformity among the participating member nations, participating nations are, nonetheless, not bound by other nations' classifications and are free to decide the ultimate classification of goods entering their boundaries.
Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the principles set forth in the General Rules of Interpretation (GRIs) of the HTSUS 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 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Heading 8431 falls in section XVI of the HTSUS and is subject to the legal notes to that section. Section XVI legal note 1 excludes "other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanized rubber other than hard rubber (heading 4016)" from classification in any of the provisions of the section. The rubber plugs are articles of a kind used in machinery or for other technical uses of vulcanized rubber other than hard rubber that are provided for in heading 4016 and therefore are precluded from classification in any of the provisions of section XVI, including heading 8431.
Additional U.S. Rule of Interpretation 1(c) provides that in the absence of special language or context which otherwise requires, a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for "parts" or "parts and accessories" shall not prevail over a specific provision for such part or accessory. Heading 3923 is a specific provision that provides for, among other articles, stoppers, lids, caps and other closures, of plastics. Therefore, even if the cement plugs were considered to be parts of drilling apparatus of heading 8431, classification would fall in the specific provision for stoppers in heading 3923. We note, however, that while the cement plugs are used in the process of drilling, they are not parts of the drilling machinery, and therefore they are not described in heading 8431.
The applicable subheading for the cement plugs made of either polyurethane or silicone plastics will be 3923.50.0000, HTSUS, which provides for stoppers, lids, caps and other closures, of plastics. The general rate of duty will be 5.3 percent ad valorem.
The applicable subheading for the cement plugs made of natural or synthetic rubber will be 4016.99.1500, HTSUS, which provides for other articles of vulcanized rubber other than hard rubber: other: caps, lids, seals, stoppers and other closures. The general rate of duty will be 2.7 percent ad valorem.
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 http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Joan Mazzola at (646) 733-3023.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division