Application for Further Review Protest No. 2704-12-103147; Tariff Classification of Ageless® Oxygen Absorbers

HQ H242643 April 15, 2015 CLA-2 OT:RR:CTF:TCM H242643 ALS CATEGORY: Classification TARIFF NO.: 3824.90.92 Port Director U.S. Customs and Border Protection 301 East Ocean Boulevard, Suite BMO Long Beach, California 90802 RE: Application for Further Review Protest No. 2704-12-103147; Tariff Classification of Ageless® Oxygen Absorbers Dear Port Director: This letter is in reply to the Application for Further Review (“AFR”) of Protest number 2704-12-103147, filed September 21, 2012, on behalf of Mitsubishi Gas Chemical America, Inc. (“MGCA” or “Protestant”). The Protest is against U.S. Customs and Border Protection’s (“CBP”) tariff classification of the above-referenced Oxygen Absorbers under subheading 3824.90.92 of the Harmonized Tariff Schedule of the United States (“HTSUS”). FACTS: The article at issue is described as an oxygen absorber, which is a sealed small bag of a chemical compound that absorbs oxygen to prevent spoilage of food products, clothing, and cosmetics, and to ward off mold and mites from clothing and bedding, though the primary use of an oxygen absorber is in food products. According to MGCA’s website, an oxygen absorber is a small sachet used to keep products safe from things like mold and extend shelf life by taking the oxygen out of a sealed package.” See http://ageless.mgc-a.com/. Specifically, it prevents the oxidation of fats and oils. The different types of Ageless® Oxygen Absorbers under consideration here are ZPT, SS, SS-MBC, SR, and Fx. Each of these types consist of at least some of the following chemical components in varying ratios: Iron Powder Natural Zeolite Carbon, Activated Magnesium Hydroxide Talc or Magnesium Stearate Perlite Iron(III) Oxide-hydroxide MGCA entered a number of these oxygen absorbers on January 19, 2011 under HTSUS subheading 7326.90.8588. Your office issued a Notice of Action to MGCA on March 26, 2012, notifying it that the tariff rate on the entered merchandise had been advanced based on your reclassification of the merchandise to HTSUS subheading 3824.90.9290. ISSUES: Are various types of the Ageless® Oxygen Absorber at issue here properly classified under HTSUS subheading 7326.90.85 as “Other articles of iron or steel: Other: Other…,” or under HTSUS subheading 3824.90.92 as “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other….”? LAW AND ANALYSIS: Initially, we note that the Protest was timely filed on September 21, 2012, which is within 180 days of the date of the liquidation, March 30, 2012. See 19 U.S.C. §1514(c)(3). Additionally, CBP’s tariff classification of the merchandise is a protestable matter under 19 U.S.C. §1514(a)(2). Further Review of Protest No. 2704-12-103147 is properly accorded to the Protestant pursuant to 19 CFR 174.24(a). Classification under the HTSUS is determined 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, GRIs 2 through 6 may be applied in order. The following subheadings of the HTSUS are under consideration in this case: 7326 Other articles of iron or steel: 7326.90 Other: 7326.90.85 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), no elsewhere specified or included: 3824.90 Other: 3824.90.92 Other……………………………………………. The Protestant asserts that the oxygen absorbers are classifiable under heading 7326.90.85 as “Other articles of iron or steel: Other: Other….” The Protestant contends that because the “main constituent” of the oxygen absorbers is iron powder by value and weight, they are more appropriately classifiable under heading 7326 as an article of iron. The Protestant also contends that CBP Ruling NY 839732 (July 14, 1988) is binding in this case because it ruled that similar Ageless® oxygen absorbers were classified under the Tariff Schedule of the United States (TSUS) item number 657.2585 as other articles of iron. NY 839732 also noted that HTSUS was, at the time, scheduled to replace the TSUS at some time in 1988, and when the HTSUS became effective, the oxygen absorbers would be classifiable under HTSUS subheading 7326.90.9090. The Protestant mistakenly reads such as if NY 839732 actually classified the subject articles under the HTSUS. It did not, as the HTSUS did not become effective until January 1, 1989. CBP rulings made under TSUS before HTSUS was enacted but advise as to the probable applicable HTSUS heading are not binding with regard to the current classification of the same or similar articles under the HTSUS. Advice on the application of a statute that had yet to be enacted does not constitute a ruling subject to the provisions of 19 U.S.C. §1625, and does not need to be revoked. To require CBP to examine rulings applying the TSUS for the purpose verifying such advice would be unreasonable and would not be in keeping with the intent of Congress in adopting an entirely new tariff schedule. Therefore, NY 839732 is not dispositive in this case. On the issue of whether NY 839732 is instructive in the present case, we noted the following in a recent ruling: Decisions by the courts interpreting nomenclature under the HTSUS' predecessor tariff code, the TSUS, are not deemed dispositive under the HTSUS. However, on a case-by-case basis, such decisions should be deemed instructive in interpreting the HTSUS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. Omnibus Trade and Competitiveness Act of 1988, Public Law 100-418, Aug. 23, 1988, 102 Stat. 1107, 1147; H.R. Rep. No. 576, 100th Cong., 2d Sess. 549-550 (1988); 1988 U.S.C.C.A.N. 1547, 1582-1583. CBP Ruling HQ H237855 (December 31, 2013). In this instance, the nomenclature has changed. Under the 1988 edition of TSUS, item number 657 read as “Articles of iron or steel, not coated or plated with precious metal,” which of course is different from heading 7326 under consideration here. Thus, NY 839732 also cannot be said to be instructive in this case as TSUS item 657 has not survived the implementation of HTSUS. The subject oxygen absorbers consist of a mixture of various organic chemicals, as noted above. The Protestant notes that a previous CBP ruling on similar Ageless® oxygen absorbers was decided at least in part on the basis that iron powder was the predominant chemical in the oxygen absorbers. See CBP Ruling HQ 800377 (April 14, 1981). Just as with NY 839732, HQ 800377 is not dispositive because it is a ruling decided under the TSUS, and given the change in nomenclature, it is not instructive. We note that neither of the subsequent CBP rulings on the tariff classification of oxygen absorbers decided under the HTSUS make reference to the predominance of iron powder as a factor in those decisions. See CBP Ruling NY L85448 (July 5, 2005) and CBP Ruling NY 849301 (February 15, 1990) (classifying similar merchandise under HTSUS subheadings 3824.80.91 and 3823.90.50, respectively. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff 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). The EN for heading 7326 at the date of entry notes that the heading “covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating other than articles included in the preceding headings of this Chapter or covered by Note 1 to Section XV or included in Chapter 82 or 83 or more specifically covered elsewhere in the Nomenclature.” (Emphasis in original.) All the processes noted involve solid metals. Those processes are distinguished from the processes for the powdering of metal, of which there are four--solid-state reduction, atomization, electrolysis, and chemical; the Metal Powder Industries Federation describes each of these four processes in detail on its website. None of them involve any of the processes listed in the EN for heading 7326. The EN for 7326 also provides an extensive list of the types of articles covered by the heading. All of those listed consist of some type of solid metal. Though the list is not meant to be exhaustive, it is noteworthy that nothing remotely similar to a powdered metal is listed. Thus, even if we were to determine that the iron powder in the oxygen absorbers is the main constituent, we still find that HTSUS heading 7326 is not applicable to the oxygen absorbers at issue. Heading 3824 covers, among other things, chemical products, including those consisting of mixtures of natural products, not elsewhere specified or included. There are no other HTSUS headings that specifically refer to or include oxygen absorbers either by name or description. Thus, as other mixtures of various chemical products, the subject Ageless® Oxygen Absorbers are properly classified under HTSUS subheading 3824 as “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other….” HOLDING: The Ageless® Oxygen Absorbers are properly classified under heading 3824, HTSUS. Specifically, they are classified is properly classified under HTSUS subheading 3824.90.92 as “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other….” The general column one rate of duty, for merchandise classified in this subheading is five (5) percent ad valorem.  Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov. The Protest should be DENIED in accordance with the LAW AND ANALYSIS above. A copy of this ruling should be attached to the CBP Form 19 or equivalent document 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