Automotive Grade Blackout Film with Comply Adhesive, Application for Further Review of Protest Number 2402-2012-100029

HQ H219218 May 8, 2013 CLA 2 OT:RR:CTF:VS H219218 RSD CATEGORY: Classification Tariff No. 8708.29.50 Port Director Port of El Paso U.S. Customs and Border Protection 7975 Zaragoza Road El Paso, Texas 79907-6656 RE: Automotive Grade Blackout Film with Comply Adhesive, Application for Further Review of Protest Number 2402-2012-100029 Dear Port Director: This is in response to the Application for Further Review (AFR) of Protest 2402-12-100029, dated April 4, 2012, filed by counsel on behalf of Edusa, Corporation (Protestant), in response to your classification of Blackout Film for automobiles under the Harmonized Tariff Schedule of the United States (HTSUS). In addition to the original AFR, Protestant has submitted three supplemental submissions to our office, dated September 24, 2012, and November 13, 2012 and April 16, 2013. Protestant also submitted samples of the Blackout Film to our office for review. FACTS: On July 5, 2011, Edusa imported a shipment of automotive Blackout Film from Mexico through the Port of El Paso, Texas. The importer classified the Blackout Film in subheading 8708.29.5060 of the Harmonized Tariff Schedule of the United States (HTSUS). Your office reviewed the entry documents and a sample of the imported product. Based on the product description, on November 28, 2011, your office issued a Notice of Action (CBP Form 29) to Edusa,) indicating a rate-advance of the Blackout Film imported on the subject entry and classification in subheading 3919.90.5060, HTSUS, as self-adhesive plates, sheet, film, foil tape strip and other flat shapes of plastic whether or not in roles, Other, Other, Other. The merchandise under consideration is known as 3M Scotchcal High Performance Film-Automotive Grade with Comply Adhesive. The product is used for automotive vehicles and provides a protective surface for vehicles and is specifically designed for exterior and interior automotive pillar sash and body trim applications. According to the Protestant, the presence of the Blackout Film on a vehicle impacts the design of the vehicle’s support structures by allowing manufacturers to create vehicles with larger “Daylight Openings,” which pertain to the shape and size of a vehicle’s side glass. The Blackout Films are composed of four or five layers, depending upon the needs of a vehicle manufacturer. These layers include the liner (paper or polyester film), a 3M comply Adhesive Performance Vinyl Film Clearcoat (for high-gloss films), and a pre-mask optional layer. Further, all of the Blackout Films feature 3M comply adhesive performance, which is used to integrate micro-structured patterns within the adhesive layer. This allows for air bubble free application by trapping air between the painted surfaces and the adhesive, so it may be channeled to the film edge and expelled. The micro-replicated channels close after the final squeegee application pressure is applied by the vehicle manufacturer. The Blackout Films are manufactured to particular specifications, such as to textured smooth, low-gloss or high gloss, black appearances and other features. They are manufactured to be scratch-resistant, weatherproof and to become a permanent part of the automobile. They have tolerances that must be satisfied for acceptance by the customer, such as an adhesive strength that withstands normal conditions including heat, aging, humidity, water, salt-water and accelerated weathering. If these properties were not incorporated into the Blackout Film, the metal on the door pillars and sash areas of the vehicle could corrode, creating a potential safety hazard. In addition, since the Blackout Film is applied to the inner pillar and sash section of the vehicle door, as well as the exterior pillar and sash, it fills in the gaps in the vehicle door and prevents wind noise and the seepage of water into the vehicle. Conversely, when plastic or chrome appliqués are used in place of Blackout Film, the holes that are drilled into the body of the vehicle to attach the appliqués could result in wind noise that does not occur when the Blackout Film is used. To prevent movement, the Blackout Films are imported into the United States in temperature controlled bins packaged in stacks of 25 to 50 of a particular part number. The perforations and scoring on the product are stacked directly on top of each other to prevent imperfections in appearance that would cause the product to be rejected by vehicle manufacturers. The product is shipped to a particular vehicle assembly facility for incorporation as a permanent part of a particular make and model of a motor vehicle. Protestant claims that without the precision cutting performed to create these complex shapes prior to their importation into the U.S., the vehicle manufacturers would be unable to properly apply them to the vehicle. The application of the Blackout Films on to a motor vehicle is done using specialized tools, such as jigs, squeegees and other placement tools designed with alignment features and positioning tabs that allow the precise placement of the product on a particular make and model vehicle. Protestant also points out that when automotive dealerships need to repair a damaged vehicle, due to an accident, rust or other issues covered under a warranty, they will replace the Blackout Film with an exact replacement article. The dealerships do not paint the area or use a roll of tape to hand cut a crude part. Similarly, they do not remove the Blackout Film that was in place and leave it bare prior to returning the vehicle to a customer. The automotive dealerships or an authorized repair facility order individual Blackout Films from 3M as automotive replacement parts. ISSUE: Whether the Automotive Grade Blackout Films are classified as self- adhesive film of plastic in heading 3919 HTSUS, or as Parts and accessories of motor vehicles of headings 8701 to 8708 in heading 8708. LAW AND ANALYSIS: Initially we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification and the rate and amount of duties chargeable. The protest was timely filed on April 4, 2012, within 180 days of the date of liquidation, on March 16, 2012, pursuant to 19 U.S.C. §1514(c)(3). Further review of Protest 2402-12-100029 was properly accorded to protestant pursuant to 19 C.F.R. §174.24. In accordance with section 174.24(a), the protestant alleges the decision against which the protest was filed is alleged to involve question of law or fact which have not been ruled upon by the Commissioner of Customs and Border Protection (CBP) or his designee or by the Customs Courts. Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context that requires otherwise, by the Additional U.S. Rules of Interpretation (AUSRI). The GRIs and the AUSRI are part of the HTSUS and are to be considered statutory provisions of law. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any related section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. The following HTSUS provisions are under consideration: 3919 Self-adhesive plates, sheets, film, foil, tape, strip and other flat shapes, of plastics, whether or not in rolls: * * * * * * * * * * * * 8708 Parts and accessories of the motor vehicles of headings 8701 to 8705: * * * * * * * * * * * * We first observe that Chapter Note 2(t) in Chapter 39, HTSUS, could be applicable to this case. It states that Chapter 39 does not cover parts of aircraft or vehicles of section XVII, HTSUS. Thus, if the Blackout Film is determined to be a part of a vehicle of Chapter 87, HTSUS, it is excluded from being classified in heading 3919, HTSUS. Accordingly, we must analyze whether the Blackout Film should be considered as a part of a motor vehicle. In addition, Note 3 to Section XVII, HTSUS provides: References in chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those chapters. A part or accessory which answers to a description in two or more headings of those chapters is to be classified under that heading which corresponds to the principal use of that part or accessory. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) 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 these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). 87.08 ENs state, in relevant part, that to be eligible under heading 8708 a part or accessory must be identifiable as being suitable for use solely or principally with the vehicles of headings 87.01 to 87.05. In addition, EN 87.08 further provides, in pertinent part: This heading covers parts and accessories of the motor vehicles of headings 87.01 to 87.05, provided the parts and accessories fulfill both the following conditions:… They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note).Parts and accessories of this heading include: (i) They must be identifiable as being suitable for use solely or principally with above mentioned vehicles: and (ii) They must not be excluded by provisions of Notes to Section XVII (see the corresponding General Explanatory Note). Parts and accessories of the heading include: Assembled motor vehicle chassis-frames (whether or not fitted with wheels but without engines and parts thereof (side-members, braces, cross-members; suspension mountings; supports and brackets for the coach work, engine running-boards, battery or fuel tanks, etc. Parts of bodies and associated accessories, for example floor boards sides, front or rear panels luggage compartments, etc. doors and parts thereof; bonnets; framed windows, windows equipped with heating resistors and electrical connectors, window frames; running boards; wings, mudguards; dashboards; radiator cowlings; number-plate brackets; bumpers and over-riders; steering column brackets; exterior luggage racks; visors; non-electric heating and defrosting appliances which use the heat produced by the engine of the vehicle; safety seat belts designed to be permanently fixed into motor vehicles for the protection of persons; floor mats other than of textile material or unhardened vulcanized rubber), etc. Assemblies (including unit construction chassis-bodies) not yet having the character of incomplete bodies, e.g., not yet fitted with doors, wings, bonnets and rear compartment covers etc. are classified in this heading and not in heading 87.07. The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Techs. Ltd. P’ship. v. United States (“Bauerhin”), 110 F. 3d 774 (Fed. Cir. 1997). The first, articulated in United States v. Willoughby Camera Stores, Inc. (“Willoughby”), 21 C.C.P.A. 322, 324 (1933), requires a determination of whether the imported item is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 778 (quoting Willoughby, 21 C.C.P.A. 322 at 324). The second, set forth in United States v. Pompeo (“Pompeo”), 43 C.C.P.A. 9, 14 (1955), states that an “imported item dedicated solely for use with another article is a ‘part’ of that article within the meaning of the HTSUS.” Id. at 779 (citing Pompeo, 43 C.C.P.A. 9 at 13). Under either line cases, an imported item is not a part if it is “a separate and distinct commercial entity.” Bauherin,110 F. 3d at 779. The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Techs. Ltd. P’ship. v. United States (“Bauerhin”), 110 F. 3d 774 (Fed. Cir. 1997). The first, articulated in United States v. Willoughby Camera Stores, Inc. (“Willoughby”), 21 C.C.P.A. 322, 324 (1933), requires a determination of whether the imported item is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 778 (quoting Willoughby, 21 C.C.P.A. 322 at 324). The second, set forth in United States v. Pompeo (“Pompeo”), 43 C.C.P.A. 9, 14 (1955), states that an “imported item dedicated solely for use with another article is a ‘part’ of that article within the meaning of the HTSUS.” Id. at 779 (citing Pompeo, 43 C.C.P.A. 9 at 13). Under either line cases, an imported item is not a part if it is “a separate and distinct commercial entity.” Bauherin, 110 F. 3d at 779. CBP has previously considered whether certain items connected with motor vehicles should be classified as parts of motor vehicles in subheading 8708.29, HTSUS. For example, in HQ 950424 dated January 28, 1992, CBP examined whether plastic vehicle side and door moldings should be classified in heading 3926, HTSUS as other articles of plastic or in subheading 8708.29.00, as other parts and accessories of motor vehicle bodies. In rendering our determination, we first noted that Note 2(p) to Chapter 39 indicated that the chapter did not cover parts of vehicles of section XVII. We stated that the side and door moldings were exterior mountings or fittings, which performed significant utility functions, similar to exterior luggage racks, number plate brackets or wind deflectors, items mentioned in the ENs as being included in subheading 8708.29. We further noted that the moldings, while they imparted a finished look to the automobile body, also protected the body finish from damage from objects striking the body, such as another vehicle's door. Thus, while the moldings may have served some ornamental purpose, "they remain in a class or kind of merchandise which is principally used for utility purposes.” Thus, CBP determined that the side and door molding were properly classifiable under subheading 8708.29.00, HTSUS, as parts and accessories of the motor vehicles 8701-8708. In another case, HQ 951385 dated May 15, 1992, CBP considered the classification of three items for automobiles; 1) a optional, removable sunshade composed of plastic with metal inserts and plastic clips for securing installation in motor vehicles; 2) a manually-operated sunroof composed of a plastic covered steel frame with an aluminum drive mechanism containing a plastic handle and smoked glass sheet which was framed by a rubber gasket seal to be installed in motor vehicles; and 3) an electrically-operated sunroof composed of a plastic covered steel frame with an aluminum drive mechanism containing a 12 volt motor and smoked glass sheet which was framed by a rubber gasket seal for installation in motor vehicles. CBP pointed out that all these items were used solely with motor vehicles and depending on the item they would be attached to the sunroof or roof of a vehicle, and thus CBP ruled that all three items were classifiable under subheading 8708.29.60 as parts and accessories of motor vehicles. More recently, in HQ H112616 dated November 1, 2010, CBP reviewed the tariff classification of certain windows for motor vehicles. CBP stated in the decision that the side glass window, glass sunroof, and rear glass window at issue were cut to size and framed to fit into the vehicle’s body. Therefore, in applying the analysis of Pompeo, CBP found that the goods were classifiable in heading 8708 as parts of motor vehicles of headings 8701-8705, because they were suitable solely with automobiles (which were classifiable in Chapter 87 of the HTSUS) and were not separate and distinct commercial entities. In this instance, the information presented indicates that the Blackout Films are used solely in connection with motor vehicles, and they have no other commercial purpose. While the Blackout Film may serve as a paint replacement for sections of a vehicle, the product also provides several significant utility functions necessary for the completion and the proper operation of a motor vehicle. When the Blackout Film is applied to a vehicle, it resists scratches to the door pillar and sash areas of the vehicle from items that might strike the vehicle and it helps prevent corrosion to these areas. More significantly, it helps reduce wind noise inside the vehicle, and prevents the seepage of water from rain, snow, ice and other moisture from getting into the passenger compartment of the vehicle. In addition, the use of the Blackout Film greatly enhances an automobile manufacturer’s capability to create a desired shape and design to their vehicles. Thus, we conclude that the application of Blackout Film helps complete a vehicle so that it is safer and more comfortable to operate. Moreover, in its condition as imported, the Blackout Film is cut to a specific size and shape, and is framed to fit into a particular vehicle’s body. Since the Blackout Film is dedicated to a particular vehicle model, it is not interchangeable between different model vehicles. As such, we believe that the Blackout Film in this case is similar to the plastic vehicle side and door moldings of HQ 950424, which were determined to be vehicle parts classified in heading 8708, HTSUS, rather than in heading 3926, HTSUS, as other articles of plastic. We also note that each piece of Blackout Film used on a vehicle is designated with a specific part number for a particular model vehicle. Therefore, following the analysis in the decisions cited previously, and applying the standard set forth in Bauerhin, we find that the Blackout Film should be considered as a part of motor vehicle of Chapter 87 of HTSUS. Based on the foregoing, we also find that the subject Blackout Film is solely or principally used with motor vehicles of chapter 87 and is thus not excluded by Note 3 to Section XVII. Since the Blackout Film is a part of a motor vehicle of Chapter 87, HTSUS, under Note 2(t) to Chapter 39, HTSUS, it is precluded from being classified in Chapter 39, HTSUS as self-adhesive plastic sheets or film. Therefore, because the Blackout Film is suitable for use solely with automobiles (which are classified in Chapter 87 of the HTSUS) and not a separate and distinct commercial entity, we find that the Blackout Film is classifiable under heading 8708, HTSUS, as “Parts … of the motor vehicles of headings 8701 to 8705”. HOLDING: By application of GRI 1 and Note 2(t) to Chapter 39, HTSUS, the Automotive Grade Blackout Films are classifiable in subheading 8708.29.50.60, HTSUS, as “Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories of bodies (including cabs): Other: Other.” The column one, general rate of duty is: 2.5% ad valorem. Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the U.S. International Trade Commission’s website, located at www.usitc.gov. Therefore the protest is granted. In accordance with the Protest/Petition Processing Handbook (CIS 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. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade 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, Myles B. Harmon, Director Commercial and Trade Facilitation Division