Internal Advice #07/22; Classification of unassembled pallets

HQ H011545 March 20, 2008 CLA-2 OT:RR:CTF:TCM H011545 KSH CATEGORY: Classification TARIFF NO.: N/A Port Director U.S. Customs and Border Protection 112 W. Stutsman Pembina, ND 58271 RE: Internal Advice #07/22; Classification of unassembled pallets Dear Port Director: This is in response to a request for internal advice dated May 12, 2007, from Jones & Jones, LLC, concerning the classification of unassembled one dimension wood pallets or wood pallets consisting of deck boards in excess of one inch under the Harmonized Tariff Schedule of the United States (HTSUS). FACTS: The requester states that the merchandise consists of unassembled pallets comprised of lumber boards of one size only or which exceed one inch in thickness. We reviewed entry summary rejections, invoices and bills of lading which were submitted by the requestor to another office within CBP. From the review, it appears that CBP rejected lumber boards generally of 2 by 4 or 2 by 3 from classification in heading 4415, HTSUS, as pallets. We note that one invoice indicates lumber boards with dimensions of 1 by 8 and 1 by 10 and another with dimensions of 7/16 by 4 or 7/16 by 6. The requester states that the merchandise is imported to facilitate transport of articles such as agricultural and horticultural equipment parts, generators, aircraft parts, refrigeration equipment, drums of dross, etc. ISSUE: Whether deckboards may exceed one inch in thickess. Whether unassembled pallets can be comprised of one dimension lumber boards. LAW AND ANALYSIS: Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUSA. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The requester asserts that the merchandise at issue is classified in subheading 4415.20.8000, HTSUSA, which provides for: “Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums, of wood; pallets, box-pallets and other load boards, of wood; pallet collars of wood: Pallets, box-pallets and other load boards; pallet collars: Other.” Unassembled goods are classified pursuant to GRI 2(a), which states: Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled. In regard to pallets, box pallets, and other load boards covered by heading 4415, HTSUS, the EN to heading 4415, states: Load boards are portable platforms for the assembly of a quantity of goods to form a unit load for handling, transportation and storage by mechanical appliances. A pallet is a load board consisting of two decks separated by bearers or a single deck supported by feet and designed essentially for handling by means of fork-lift trucks or pallet trucks. Box pallets have a superstructure of at least three fixed, removable or collapsible vertical sides and designed for stacking with a double-decked pallet or another box pallet. Platforms, post platforms, collar-type box platforms, side-rail platforms and end-rail platforms are other examples of load boards. CBP has classified unassembled merchandise in heading 4415, HTSUS, as having the “essential character” of an assembled or finished article of heading 4415, HTSUS, pursuant to GRI 2(a) when, using all information available to CBP: (i) the complete or finished article that the merchandise is assembled into is classified in heading 4415, HTSUS; (ii) the unassembled merchandise consists only of the exact number of components necessary to be assembled into the complete or finished articles and does not require additional processing; and (iii) transactional documentation and information (invoices, purchase orders, diagrams, statements, company information, etc.) support that the merchandise, as imported, is an unassembled article of heading 4415, HTSUSA. See generally HQ 965950, dated February 6, 2003, HQ 965341, dated May 22, 2002, New York Ruling Letter (“NY”) D83315, dated July 16, 1999, NY C89984, dated December 16, 1999, and NY R03401, dated April 8, 2003. In New York Ruling Letter (NY) D83315 (July 16, 1999), we determined that certain “knocked down pallet assemblies” imported in exact numbers of pieces required to make a specific number of pallets were classifiable in heading 4415. We emphasize, however, that not only were these assemblies imported in exact numbers necessary to be assembled into the complete or finished articles, they also met the other criteria set forth supra for unassembled merchandise to be classified in heading 4415, HTSUS. The same is true for the certain 44” x 154” unassembled pallets consisting of ten pieces of spruce-pine-fir (S-P-F) wood measuring 1” x 6” x 44” as the top deckboards, three pieces of S-P-F wood measuring 2” x 4” x 154” as the stringers and four pieces of S-P-F wood measuring 2” x 4” x 47” as the bottom deckboards, that were the subject of NY C89984, dated December 16, 1999. We note that photographs illustrating the use of the merchandise were submitted in conjunction with the ruling request. We recognize that load boards may vary in size based on their purpose and emphasize that it is not the claimed dimensions of the assembled articles at issue, but the other reasons set forth earlier in this letter, that may lead to our conclusion that the unassembled articles are or are not classified in heading 4415, HTSUS. In 965460, dated September 5, 2002, the merchandise at issue was distinguishable from other merchandise classified in heading 4415, HTSUS, as the merchandise classified in heading 4415, HTSUS, had deckboards that were thinner than the runners, and did not exceed 1" in thickness. We ultimately concluded that the merchandise at issue therein was not classified in heading 4415, HTSUS, because the boards were a collection of dimension lumber in nominal sizes of 2” x 4" and 2” x 6" and in various lengths that had no features that made them recognizable as pallets or unassembled pallet components. We note that our position is consistent with that of the Court of International Trade as noted in Millenium Lumber Distribution Ltd., v. United States, Slip Op. 2007-56 (April 16, 2007). In Millenium, the Court stated: “It is well settled law that merchandise is classified according to its condition when imported." Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). To determine whether imported merchandise is sufficiently advanced and recognizable at the time of importation, the court must consider whether the merchandise is: 1) identifiable and "fix[ed] with certainty" as part of the final product at the time of importation, Baxter Healthcare Corp. of P.R. v. United States, 182 F.3d 1333, 1339 (Fed. Cir. 1999); 2) so far advanced as to be "dedicated solely or principally for use" in the final product, id. at 1338; see also Heraeus-Amersil, Inc. v. United States, 10 CIT 258, 261, 640 F. Supp. 1331, 1333 (1986); and 3) dissembled as pieces of specific product structures, not just "the making of [the products] in the abstract," Bendix Mouldings, Inc. v. United States, 73 Cust. Ct. 204, 206, 388 F. Supp. 1193, 1194, C.D. 4576 (1974). Id. at 12-13. Inasmuch as the requester has not provided information regarding an identifiable design plan, detailing the specifications for the particular type of pallet to be constructed (e.g., reusable pallet, two-way pallet, size, load bearing capacity, deck construction, fork lift access, wood species, etc.) or provided any of the other relevant information necessary for this office to render a determination, no classification can be given at this juncture. General questions, such as these presented here, are not properly the subject of an internal advice request. In the future parties making such requests should be directed to submit a request for an information letter pursuant to 19 CFR 177.1. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division