Domestic Interested Party Petition, 19 U.S.C. § 1516; Tariff Classification of Glass Preforms for Optical Fibers; HQ Ruling 967058 dated April 21, 2006

HQ W968361 July 14, 2008 CLA–2 OT:RR:CTF:TCM W968361 EMS CATEGORY: Classification TARIFF NO.: 7002.20.1000 Frederick L. Ikenson, Esq. Blank Rome LLP 600 New Hampshire Ave., NW Washington, DC 20037 RE: Domestic Interested Party Petition, 19 U.S.C. § 1516; Tariff Classification of Glass Preforms for Optical Fibers; HQ Ruling 967058 dated April 21, 2006 Dear Mr. Ikenson: This is in response to the domestic interested party petition, dated August 4, 2006, filed by you on behalf of Corning Incorporated (the petitioner), pursuant to Section 516 of the Tariff Act of 1930, as amended (19 U.S.C. § 1516). At issue is whether CBP has correctly classified imported merchandise of “the class or kind” termed “glass preforms for optical fibers.” 19 C.F.R. § 175.0. The petitioner states that it is a manufacturer in the United States of merchandise of the same “class or kind,” and such qualification is a necessary prerequisite to file this petition. 19 C.F.R. § 175.2(a). The petitioner specifically challenges HQ 967058, dated April 21, 2006, an administrative ruling wherein CBP classified certain imported glass preforms for optical fibers in subheading 7002.20.1000 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for, among other things, glass rods that are unworked. Pursuant to 19 U.S.C. § 1516 and the U.S. Customs and Border Protection (CBP) Regulations, 19 C.F.R. § 175.21(a), notice of receipt of the domestic interested party petition was published on March 28, 2007, in the Federal Register, Volume 72, Number 59. The petitioner has requested that CBP initiate a proceeding under Section 625(c) of the Tariff Act of 1930, as amended (19 U.S.C. § 1625(c)), to revoke HQ 967058 and reclassify the subject merchandise in either of subheadings 7020.00.60 or 9001.10.00, HTSUS. Subheading 7020.00.60 is a basket provision that provides for other articles of glass not elsewhere covered in Chapter 70 of the HTSUS. Subheading 9001.10.00 provides for, inter alia, optical fibers. Two comments were received in response to this notice, both of which agreed with CBP's position that the glass preforms described in HQ 967058 should be classified in subheading 7002.20.1000, HTSUS. Heading 7002, HTSUS, is an eo nomine provision that covers unworked glass rods. CBP has classified the designated imported glass preforms for optical fibers in this heading based on its finding that these goods are solid multi-layer glass rods of fused silica that are unworked in their condition as imported. The petitioner’s fundamental argument against CBP’s classification of the glass preforms in HQ 967058 is that the visible differentiation between the two layers of these glass rods is de facto proof that the core area is a “worked” rod of glass. CBP disagrees with this superficial standard. The appearance of an article can be evidence of further working, but it is not dispositive. The actual test for whether an article has been “worked” requires a factual inquiry into its manufacture and any subsequent processing prior to importation. For the reasons set forth in this letter, CBP affirms that the designated imported merchandise described below is properly classified as an eo nomine unworked glass rod of heading 7002 of the HTSUS. The description of the manufacture of the glass preforms described in HQ 967058 was incorporated into that ruling by reference to prior HQ Ruling 960948, dated September 11, 1998. Specifically, HQ 960948 provided the following description: The preforms under consideration are produced by a two-step process. In the first step, the core layer of the preform is produced by a method called "Vapor Axial Deposition" (VAD). Extremely fine "dusts" or "soots" of silica tetrachloride and additional chemicals are grown or deposited on the end of a "target" rod, forming a column of the "dust" or "soot" material. The column is drawn through a furnace, fusing it into a rod and releasing the chlorine. In the second step, the cladding layer of the preform is added by fusing to the outside of the core rod a layer of silica dioxide powder. Such a two-step production process is described in Kirk-Othmer, supra, 616, as follows: ... Sometimes a two-step process can be employed for efficiency. A preform is made which is roughly half core and half cladding. The sintered preform is then drawn into rod and then overclad with pure silica soot to obtain the appropriate core/ clad ratio. After deposit of the silica dioxide powder or soot to form the cladding layer of the preform, the "target" rod on which the core layer was deposited or grown is removed. This phase of the process is described in Fiber Optic Reference Guide, supra, 16, as follows: ... When the deposition is complete, the rod is removed, and the deposited material is placed into a consolidation furnace. The water vapor is removed, and the preform is collapsed to become dense, transparent glass. The core and cladding of the preform consist of glass with different refractive indexes. *****The resulting article, in the form of a rod approximately 62 millimeters in diameter and 1500 millimeters in length, may be flame polished using an oxyhydrogen flame to achieve a smooth surface, if necessary. The glass preforms described above are solid multi-layered rods made from fused silica. The visible differentiation between the core and cladding results from the different refractive indices of the glass. The core is the light-guiding region of an optical fiber, while the cladding, which has a different index of refraction than the core, ensures that the light signal remains within the core as it is carried along the fiber’s length. See e.g., HQ 964879, dated March 21, 2002. The cladding also functions as a protective layer for the core. See HQ 964879. The threshold issue in the petitioner’s challenge to CBP’s classification of these glass preforms in heading 7002, HTSUS, turns on whether this visible differentiation evidences the existence of what the petitioner describes as “a glass core rod which has been ‘worked’ by the addition to it of a layer of cladding glass.” After addressing this issue, the remainder of this letter responds to the petitioner’s legal arguments regarding the classification of the class or kind of merchandise consisting of glass preforms for optical fibers within heading 7002 and other provisions of the HTSUS. A. The Designated Imported Merchandise Is an Unworked Glass Rod of Heading 7002 Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods 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 GRIs 2 through 6 may then be applied in order. GRI 6 provides that the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings, and any related subheading notes and, mutatis mutandis, to GRIs 1 though 5, on the understanding that only subheadings at the same level are comparable. Additionally, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system. CBP believes the EN's should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). The terms of heading 7002 cover “[g]lass in balls (other than microspheres of heading 7018), rods or tubes, unworked.” It is uncontroverted that the glass preforms for optical fibers at issue in HQ 967058 are rods of glass within the scope of this heading. The petitioner’s legal argument concerns the meaning of the term “unworked.” There are no applicable section or chapter notes for this heading. “When a tariff term is not defined in either the HTSUS or its legislative history, the term’s correct meaning is presumed to be its common meaning in the absence of evidence to the contrary.” Timber Products Co. v. United States, 515 F.3d 1213, 1219 (Fed. Cir. 2005) (citing Rohm & Haas Co. v. United States, 727 F.2d 1095, 1097 (Fed. Cir. 1984)). The petitioner has not provided any such evidence to the contrary or otherwise asserted a commercial meaning in this case. Furthermore, the ENs do not provide any commentary on the scope of this “unworked” for purposes of heading 7002, HTSUS. The Federal Circuit Court of Appeals has already determined the common meaning of “work” under the HTSUS as “to form, fashion, or shape an existing product.” Winter-Wolff, Inc. v. United States, 966 F. Supp. 1258, 1265 (Ct. Int’l Trade 1998). An existing product is one that “already exists as a commercial product.” Id. It follows that in the context of heading 7002, a glass rod is “unworked” if it is a commercial product of glass that has not been formed, fashioned or shaped beyond its manufacture into the shape of a rod.” To prevail in its argument that CBP erroneously classified the designated imported merchandise in heading 7002, the petitioner must demonstrate as a matter of fact that before the cladding soots were applied, the core area (1) existed in the shape of a rod; and (2) constituted a commercial product. 1. The Designated Imported Merchandise Described in HQ 967058 Is a Glass Preform for an Optical Fiber That Was Not Preceded by a Core Rod of Glass CBP ruled in HQ 967058 that the glass preform was not formed, fashioned or shaped beyond its manufacture into the shape of a rod. Based on past rulings, CBP explained that it has uniformly considered the working of glass to be a process that has been performed on an extant article. The factual inquiry in that case was simply whether the core existed in the form of a solid glass rod before the “cladding” layer was applied. With respect to the manufacturing process described above, the core was not in the form of a solid glass rod until after the target rod was removed and the two layers of glass soots sintered onto the target (core and cladding layers) were simultaneously consolidated into a single, solid multilayered rod in a furnace. Until this point of consolidation, the core was merely a layer on the target rod. CBP concluded that the imported glass preform was not further formed, fashioned or shaped after this consolidation, and was “unworked” in its condition as imported. Our decision in HQ 967058 dispelled the gravamen of the petitioner’s argument that a rod with an observable layer of “cladding” distinct from its core is de facto “worked” within the meaning of heading 7002. The uniqueness of the VAD process described in that ruling yields an intermediate product in the manufacture of an optical fiber, but it is nonetheless an “unworked” glass rod. The complexity of the manufacturing process does not preclude classification of the resulting product in heading 7002. While the VAD process and the resulting glass preform may not have been envisioned when the eo nomine provision for glass rods originated under the HTSUS, Congress could not have intended to foreclose future innovations in [goods] from classification under the [eo nomine] provisions. Simmon Omega, Inc. v. United States, 83 Cust. Ct. 14, C.D. 4815 (1979). An interested party that files a petition under 19 U.S.C. § 1516 designates imported merchandise of the same class or kind as that which is manufactured by the interested party. 19 U.S.C. § 1516(a). The manufacturing processes vary,  but the class or kind of merchandise which shares the same general physical characteristics as the designated imported merchandise in HQ 967058 consists of highly specialized rods of pure silica that exhibit precise variation between the refractive indexes of their core and cladding regions. The designations of the “core” and “cladding” regions in the technical literature which describes glass preforms are not evidence that the glass preform was manufactured in a sequential process of discrete steps that began with an extant core rod to which cladding is subsequently applied. As one commenter pointed out, these “technical references” to the core and cladding areas of a preform do not support the conclusion that the core was an extant glass rod prior to manufacture of the preform. CBP finds that the mere fact that “cladding” is a technical designation for the outer layer of a glass preform for an optical fiber does not support the ipse dixit conclusion drawn by the petitioner that the cladding was applied to a pre-existing core rod. Empirically, the petitioner’s conclusion is disproven by the scenario set forth in HQ 967058, as described above. Another commenter specifically addressed the petitioner’s claim that “there is a pervasive commercial understanding that the preform core is produced as a rod.” The commenter takes the position that the petitioner’s “efforts to speak on behalf of the ‘industry’ in this case are … factually incorrect.” According to the commenter, “the Modified Vapor Chemical Deposition (MVCD) manufacturing process is generally accepted to be the most commonly used method of preform production.” The commenter describes the MVCD method as follows: [T]he core in a preform manufactured in the MVCD process is not a pre-existing glass rod to which cladding is added. Rather, the cladding and core are made in a continuous process of layered soot deposition and sintering, with the different indices of refraction between the cladding and core achieved through modification of the gas mixture used to create the soot. The reason why the core remains visibly distinct from the cladding in a finished preform is not because the core rod was a pre-existing commercial entity, but because the core glass has a different refractive index. (Emphasis in original). The MVCD method supports CBP’s conclusion that the petitioner has failed to establish as a matter of fact that a glass preform for an optical fiber is preceded by an extant core rod simply because of the visible differentiation between its layers. In light of the foregoing, the petitioner’s argument for the classification of glass preforms for optical fibers as a “class or kind of merchandise” that is “worked” beyond the scope of heading 7002, HTSUS, must fail. No evidence has been presented which would merit reconsideration of CBP’s factual conclusion in HQ 967058 that an extant core rod did not precede the existence of the cladding. The classification of the designated imported merchandise in heading 7002, HTSUS, was correct; and, the “class or kind” of merchandise consisting of glass preforms for optical fibers also falls to be classified in the same heading as explained below. 2. The Core Region Is Not a Commercial Product Even When It Is Created Before the Cladding Region of Glass Preforms of the Same Class or Kind as the Designated Imported Merchandise The petitioner has cited to technical literature which suggests that an extant rod of glass may be an input in some manufacturing processes for glass preforms for optical fibers. However, the manipulation of a manufacturing input is considered a “working” for tariff purposes only if that manufacturing input stands on its own as a commercial product. Winter-Wolf, 966 F. Supp. at 1265 (observing that only a “commercial product” is subject to “working” for tariff classification purposes). In order to demonstrate that an article is a commercial product, there must be evidence of “commercial transactions or a market for them.” Drexel Chemical Co. v. United States, 27 Ct. Int’l Trade 804, 809 (2003); F. F. Zuniga a/c Refractarios Monterrey, S.A. v. United States, 16 Ct. Int’l Trade 459, 465-66 (1992). The evidence proffered by the petitioner does not establish that unclad core rods are “commercial products,” as explained by CBP’s analysis below for each of these examples. HQ 967059 dated April 21, 2006. This ruling recognized that the petitioner refers to its precursor to a glass preform for an optical fiber as “cane.” However, this ruling sets forth the fact that”[a] protective layer of pure silica cladding material is added to protect the core from scratching and to reflect inward or contain within the core pulses of light passing through the glass core.” The core rod that was intended for importation in that ruling was covered in a glass cladding, and classified by CBP in heading 7002, HTSUS. HQ 562754 dated August 11, 2003. This ruling recognized that 3M Co. refers to its glass preform for optical fiber as “seed.” This ruling clearly indicates that the “seed” is a glass rod that is clad before it is transported internationally. According to this ruling, “[t]he seed is a multi-layered glass rod. The rings, or layers, or glass that comprises the seed are melded together and light travels through the layers of glass, all of which have different refractive indexes.” The “seed” is clad prior to international shipment for further manufacture into an optical fiber. HQ 960948 dated September 11, 1998. The petitioner cites CBP’s description of the manufacture of the glass preforms as a process whereby “a rod of the core soots is created in the first step of manufacture and that rod is then “worked” by the addition to it of cladding soots that are fused onto it.” (In HQ 967058, CBP revoked this ruling, and specifically stated that the fusing of cladding soots onto a target rod covered in core soots is not a “working” for purposes of heading 7002, HTSUS.) CBP’s acknowledgement of steps in the manufacturing process is not proof that any specific manufacturing inputs utilized are commercial products. Application Note by Heraeus Tenvo. The note describes the process of jacketing an optical fiber preform that consists of both a core and a cladding. While the note recognizes the core as a component of a preform for an optical fiber, it does not indicate that the core is a glass rod that is traded internationally. Quite the contrary, the note indicates that the proposed “RIC preform technology” system is utilized on a preform for an optical fiber (and not merely its core). Promotional Brochure for Shin-Etsu Quartz Products Co.: “Synthetic Quartz Glass for Fiber Optics SUPRASIL-F300.” The SUPRASIL-F300 is a specialized synthetic quartz glass. It is used in the manufacture of “substrate tubes,” which are tubes used in the manufacture of preforms for optical fibers in the MCVD and Plasma Chemical Vapor Deposition processes. The preform is manufactured inside of the substrate tube, where cladding material is deposited and then consolidated onto the core after the core is inserted into the tube. There is no evidence which suggests that the core rods used in this process are commercial products. Paper Entitled “Next Generation Fiber Manufacturing for the Highest Performing Conventional Single Mode Fiber.” This paper describes a method of manufacturing preforms for optical fibers that is identified as “Rod-in-Cylinder and Overclad-during-Draw (RIC-ODD).” This method involves the insertion of a rod produced through VAD into a tube that will become its cladding and another tube that will act as an additional layer of overcladding. Both layers of cladding are applied to the core upon insertion into a furnace. There is no evidence which suggests that the highly specialized core rod is available as a commercial product. U.S. Patents 6,205,268 B1 and 6,928,841 B2. These patents refer to techniques that involve the etching of the core rod with