Application for Further Review of Protest No. 2809-07-100639; Engineered wood flooring

HQ H022167 October 16, 2008 CLA-2: OT:RR:CTF:TCM H022167 KSH CATEGORY: Classification TARIFF NO.: 4412.29.36 Port Director, Port of San Francisco U.S. Customs and Border Protection 555 Battery Street San Fancisco, CA 94111 RE: Application for Further Review of Protest No. 2809-07-100639; Engineered wood flooring Dear Port Director: This is in reply to your correspondence dated November 23, 2007, forwarding an Application for Further Review of Protest (AFR) No. 2809-07-100639, filed on behalf of Beronio Lumber Company. The protest is against U.S. Customs and Border Protection’s (CBP) classification and liquidation of one entry of engineered hardwood flooring under heading 4412 of the Harmonized Tariff Schedule of the United States (HTSUS). FACTS: The merchandise at issue is engineered flooring that consists of a three layer laminated wood board measuring approximately ½” thick by 7 5/8” wide. The board has tongue and grooved edges and is surface finished with a transparent coating. The top layer is a 1/8” thick sheet of oak (other possible species of the top layer of wood are beech, maple, cherry, walnut or Jatoba with a UV finish). The core consists of 5/16” thick lumber strips. The bottom layer consists of a 1/16” thick sheet of wood. The three layers are laminated together so that the grains of the layers run at angles to each other. On January 6, 2007, protestant entered the merchandise subject to this protest in heading 4418, HTSUS, which provides for: “Builders’ joinery and carpentry of wood, including cellular wood panels and assembled parquet panels.” On February 19, 2007, a Notice of Action was issued to the protestant advising that reclassification in heading 4412, HTSUS, was being proposed. On March 23, 2007, a Notice of Action was issued advising that the merchandise had been reclassified in heading 4412, HTSUS. The merchandise was liquidated on April 13, 2007, in heading 4412, HTSUS, which provides for: “Plywood, veneered panels and similar laminated wood.” On October 9, 2007, protestant filed a protest and application for further review against the classification and liquidation of the merchandise in heading 4412, HTSUS. Protestant’s AFR request was approved. The protest was timely filed pursuant to 19 U.S.C. §1514 (c)(3). ISSUE: Whether the engineered flooring is classified in heading 4412, HTSUS, as “Plywood, veneered panels and similar laminated wood” or in heading 4418, HTSUS, as “Builders’ joinery and carpentry of wood, including cellular wood panels and assembled parquet panels.” LAW AND ANALYSIS: Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed within 180 days of liquidation for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, §2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further review is warranted pursuant to 19 CFR §§174.24(a) and 174.25 because the protest involves questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Specifically, protestant alleges that this “matter and class of merchandise [has not been] previously reviewed by CBP.” Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRIs). 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. On February 3, 2007, the HTSUS, was amended, pursuant to the 2007 changes to the Harmonized System. Certain headings of Chapter 44, HTSUS, were changed and new subheadings were created. Insofar as protestant’s merchandise was entered on January 8, 2007, the 2006 version of the HTSUS is dispositive of the classification of the subject merchandise. The headings under consideration are as follows: 4412 Plywood, veneered panels and similar laminated wood: Builders’ joinery and carpentry of wood, including cellular wood panels and assembled parquet panels; shingles and shakes: The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized System 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 the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The Explanatory Notes to heading 4418, HTSUS (2006), stated, in pertinent part: * * * * * This heading also covers parquet strips, etc., assembled into panels or tiles, with or without borders, including parquet panels or tiles consisting of parquet strips assembled on a support of one or more layers of wood. These panels or tiles may be tongued and grooved at the edges to facilitate assembly. * * * The heading does not cover : (a)  Plywood panels or veneered panels, used as flooring panels, which have a thin veneer of wood affixed to the surface, so as to simulate a flooring panel made up of parquet strips (heading 44.12). * * * * * Neither the legal text nor the EN define or describe the term “parquet”. Under these circumstances, a term should reflect its common meaning which is normally the same as that which is used in trade. When used in the nomenclature a term usually reflects its common meaning. In the Merriam-Webster’s Dictionary OnLine (www.Merriam-WebsterOnLine.com), the term "parquet" is defined as "a patterned wood surface (as flooring or paneling)". In the Oxford English Dictionary, 2nd Ed. (1989), Clarendon Press, Oxford, page 251, the term "parquet" is defined as follows: Parquet: 1. A flooring, spec. a wooden flooring composed of pieces of wood, often of different kinds, arranged in a pattern; In The Complete Dictionary of Wood Dorset Press, (1989) "parquet" is defined as:[S]urfaces formed of small pieces of varied coloured woods, and usually in geometrical designs. Often applied to floors. Excerpts from the American Heritage Talking Dictionary (1997) read:  par·quet n. 1. A floor made of parquetry. 2. The art or process of making parquetry.  par·quet·ry n.pl. par·quet·ries. Inlay of wood, often of different colors, that is worked into a geometric pattern or mosaic and is used especially for floors.  The Wood Flooring Manufacturers Association, at their website, www.nofma.org, defines the term parquet flooring as follows: Parquet Flooring – Mosaic hardwood flooring patterns made of small size flooring units. Patterns may be rectangular, square, or of irregular shapes which abut to form a floor covering. Protestant argues that the merchandise at issue is classified in heading 4418, HTSUS, as it is a parquet panel consisting of parquet strips assembled on a support of two or more layers of wood. Protestant further cites to the Harmonized System Committee’s decision at its 33rd session that certain flooring panels not exhibiting a mosaic design are classified in heading 4418. Annex G/7 to Harmonized System Committee World Customs Organization (HSC) Document NC0845E1, May 2004. Protestant correctly notes that HQ 966511, dated July 22, 2004, which classified two parallel strips of edge glued lumber into a single assembly in heading 4418, HTSUS, is distinguishable because the merchandise at issue is a three layer laminated wood board that has been tongue and grooved. However, protestant incorrectly argues that as applied to the merchandise at issue, our determination that parquet flooring must consist of patterns was rendered moot by the HSC’s decision referenced above. As stated in HQ 966511, once the decision on flooring panels was deemed approved by the Council of the WCO pursuant to Article 8 of the HS Convention, we asked the International Trade Commission to initiate a 1205 investigation pursuant to 19 U.S.C. 3005 seeking amendment to the HTS in order to conform it to the Committee’s decision. The amendment to the HTS as a result of the WCO’s decision and subsequent 1205 investigation did not become effective until February 3, 2007. As noted in HQ 966511, essential to both the lexicographic and commercial definitions of “parquet” cited therein, is the requirement that parquet flooring consist of patterns created by the assembly of pieces or strips of wood. By contrast, the flooring product under examination is a laminated wood board that is ready for installation. This flooring is not patterned because the face panel is a single sheet that is not geometrically arranged. Therefore, we conclude that this product is not classifiable in heading 4418, HTSUS, as parquet panels, but is classified in heading 4412 as plywood. Heading 4412, HTSUS, provides for “"Plywood, veneered panels and similar laminated wood.” The ENs to heading 4412, HTSUS, state, in pertinent part: This heading covers: (1)   Plywood consisting of three or more sheets of wood glued and pressed one on the other and generally disposed so that the grains of successive layers are at an angle; this gives the panels greater strength and, by compensating shrinkage, reduces warping. Each component sheet is known as a “ply” and plywood is usually formed of an odd number of plies, the middle ply being called the “core”. (2)   Veneered panels, which are panels consisting of a thin veneer of wood affixed to a base, usually of inferior wood, by glueing under pressure. Wood veneered on to a base other than wood (e.g., panels of plastics) is also classified here provided it is the veneer which gives the panel its essential character. * * * * The heading also covers plywood panels or veneered panels, used as flooring panels, and sometimes referred to as “parquet flooring”. These panels have a thin veneer of wood affixed to the surface, so as to simulate a flooring panel made up of parquet strips.       Protestant contends that the merchandise at issue cannot be classified in heading 4412, HTSUS, because it does not feature any veneer. Instead, protestant argues that the instant merchandise features a top layer made from timber cut boards which are not sawn, peeled or sliced into thin sheets upon removal from the tree and the thickness of the boards is four times greater than the accepted size of veneer sheets. Protestant cites the definitions of “veneer” as set forth by the Court of International Trade in Boen Hardwood Flooring, Inc. v. United States, 254 F. Supp. 2d 1349 (2003) (reversed on other grounds), which are as follows: Definitions of "veneer" include "wood peeled, sawn, or sliced into sheets of a given constant thickness and combined with glue to produce plywood or laminated-veneer lumber," Terms of the Trade at 360; "1. A thin layer of material, as wood or plastic, bonded to and used for covering a [usually] inferior material. 2. Any of the thin layers glued together in manufacturing plywood," Webster's at 1280; "[a] thin sheet of wood of uniform thickness used for facing furniture or, when bonded, used to make plywood," McGraw-Hill Dictionary of Scientific and Technical Terms at 2126; "1. a thin layer of material, especially a thin sheet of expensive wood laid over a base of cheaper wood in order to improve the outward appearance of the cheaper wood …. 3. any of the layers that compose a sheet of plywood," Harcourt; "thin leaf of wood applied with glue to a panel or frame of solid wood …. The modern machine-cut sheets are rarely thicker than 1/32 in …. Plywood and beams or planks of compounded woods are developed by a veneering process." The Columbia Encyclopedia 2870 (5th ed. 1993). Id. At 1360-1361. From a review of the above offered definitions, it is readily apparent that there is no requirement regarding the means by which the veneer is produced. Rather, veneer includes wood of a given constant thickness combined with glue. Terms of the Trade. The top layer of the subject flooring is comprised of a wood sheet of constant thickness not exceeding 6 mm in thickness which has been laminated on top of other inferior layers of wood. The three layers of wood are laminated together so that their grains are at an angle to each other. As such, the subject flooring panels meet the description of plywood found in the EN to heading 4412. See also Boen Hardwood Flooring, Inc. v. United States, 357 F.3d 1262. Additionally, we note that if entered separately, the face of the subject flooring would be classified in heading 4408, HTSUS, which provides for “Sheets for veneering (including those obtained by slicing laminated wood), for plywood or for similar laminated wood and other wood, sawn lengthwise, sliced or peeled, whether or not planed, sanded spliced or end-jointed, of a thickness not exceeding 6 mm.” (Emphasis added). HOLDING: The engineered laminated wood flooring is classified in heading 4412, HSTUS. It is provided for in subheading 4412. 29.36, HTSUS, which provides for: “Plywood, veneered panels and similar laminated wood: Other, with at least one outer ply of nonconiferous wood: Other: Plywood: Not surface covered, or surface covered with a clear or transparent material which does not obscure the grain, texture or markings of the face ply: Other.” The rate of duty at the time of entry was 8% ad valorem. Since the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to deny the protest in full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. No later than 60 days from the date of this letter, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP homepage on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division