Application for Further Review of Protest No. 4909-11-100047; Tariff classification of Fuel Oil.

HQ H185599 August 5, 2013 CLA-2 OT: RR: CTF: TCM H185599 RES CATEGORY: Classification TARIFF NO.: 2710.19.0530 Port Director Service Port Room 214 # 1 La Puntilla Street San Juan, PR 00901 ATTN: Mayra V. Asencio, Import Specialist RE: Application for Further Review of Protest No. 4909-11-100047; Tariff classification of Fuel Oil. Dear Port Director: This letter is in reply to the Application for Further Review (“AFR”) of Protest number 4909-11-100047, filed May 27, 2011, on behalf of Trafigura AG (”Protestant”). The Protest is against U.S. Customs and Border Protection’s (“CBP”) classification of fuel oil under subheading 2710.19.10, of the Harmonized Tariff Schedule of the United States (“HTSUS”), as No. 4 type fuel oils. FACTS: The article at issue here is a fuel oil. Protestant entered the merchandise on July 6, 2010, under subheading 2710.19.05, HTSUS, as “[p]etroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils . . . [o]ther: [d]istillate and residual fuel oils (including blending fuel oils): [t]esting under 25 degrees A.P.I.” However, based on a CBP lab report on the testing of a sample of fuel oil, the subject entry was liquidated on December 3, 2010, under subheading 2710.19.10, HTSUS, as “[p]etroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils . . . [o]ther: [d]istillate and residual fuel oils (including blending fuel oils): [t]esting 25 degrees A.P.I. or more.” The origin of the tested sample cannot be established with certainty to have come from the importer’s vessel. The importer asserts that based on lab tests of additional oil samples, the fuel oil should be classified under subheading 2710.19.05, HTSUS. ISSUES: Whether the subject fuel oil has A.P.I. gravity under 25 degrees and is classified under subheading 2710.19.05, HTSUS, as a fuel number 6, or an A.P.I. gravity over 25 degrees and is classified under subheading 2710.19.10, HTSUS, as fuel oil number 4? LAW AND ANALYSIS: Initially, CBP notes that the Protest was timely filed on May 27, 2011, which is within 180 days after the liquidation date of December 3, 2010. See 19 U.S.C. § 1514(c)(3). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. § 1514(a)(1) . Further Review of Protest No. 4909-11-100047 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the Protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Court of International Trade. Classification under the HTSUS is made 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, the remaining GRI 2 through 6 may be applied in order. The HTSUS headings under consideration in this case are as follows: 2710 Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils: Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, other than waste oils: 2710.19 Other: Distillate and residual fuel oils (including blended fuel oils): 2710.19.05 Testing under 25 degrees A.P.I.: 2710.19.10 Testing 25 degrees A.P.I. or more: The liquidated classification of the fuel oil at issue here under subheading 2710.19.10, HTSUS, was based on CBP’s lab report on the testing of one sample of fuel oil that determined the fuel oils A.P.I. gravity to be 27.88. However, subsequent testing of ten additional samples performed after the Protest was filed, one sample taken from each of the importer’s vessel’s ten fuel storage compartments and provided by Saybolt, a CBP Approved Gauger and Accredited Laboratory, revealed that the fuel oil’s API gravity was less than 25 (20.8 to 21). Thus, because we cannot establish with certainty the source of the initial sample tested by CBP, the classification of the fuel oil should be based on the results from the subsequent testing of the ten additional samples provided by Saybolt. The documentation provided by Saybolt establishes that the source of these samples originated from the importer’s vessel. Therefore, the fuel oil at issue here is classified under subheading 2710.19.05, HTSUS, as “[p]etroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils . . . [o]ther: [d]istillate and residual fuel oils (including blending fuel oils): [t]esting under 25 degrees A.P.I.” HOLDING: Pursuant to GRI 1, the fuel oil is classified under subheading 2710.19.0530, HTSUSA (Annotated), as “[p]etroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils . . . [o]ther: [d]istillate and residual fuel oils (including blending fuel oils): [t]esting under 25 degrees A.P.I.: [h]aving a Saybolt Universal viscosity at 37.8°C of more than 125 seconds (heavy fuel oils): [f]uel oil No. 6.” The general, column one, rate of duty is 5.2 percent, ad valorem. The Protest should be GRANTED. Since the classification indicated above is a different provision as the classification under which the entry was liquidated, you are instructed to grant the protest in full and reliquidate the entry pursuant to subheading 2710.19.05, HTSUS. A copy of this ruling should be attached to the CBP Form 19 and provided to the protestant as part of the notice of action on the protest. Sixty days from the date of the decision the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on 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