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HQ 082506

March 3, 1989

CLA-2 CO:R:C:G 082506 SS

CATEGORY: CLASSIFICATION

TARIFF NO: TSUS 432.15 (432.10)

District Director of Customs
7911 Forsythe Blvd.
St. Louis, Missouri 63105

RE: Decision on Application for Further Review of Protest No. 4501-7-000065, classification of Phostex and Gastoxin.

Dear Sir:

This is our decision on Application For Further Review of protest No.4501-7000065.

FACTS:

The imported products, Gastoxin and Phostex, are restricted use pesticides in pellet or tablet form. The brief submitted by counsel on behalf of the importer states the following facts:

Gastoxin and Phostex are identical in both chemical composition and use. They contain one active ingredient, aluminum phosphide, which is 57 percent of the product by weight. The aluminum phosphide reacts quickly with moisture to release phosphine, a colorless and odorless gas. A warning label is attached to each flask of Gastoxin and Phostex.

In addition, Gastoxin and Phostex contain inert ingredients in varying quantities. Some of these ingredients are added to give bulk (weight and volume) to the product, lubricate other ingredients during the manufacturing process, dilute the phosphine gas discharge in order to reduce its flammability, and produce a pungent odor as a warning agent while the pesticidal action occurs.

Gastoxin and Phostex also contain five percent of an organic compound, paraffin, which is a derivative of petroleum. The paraffin is added for the sole purpose of retarding the chemical reaction between the active ingredient, phosphide, and atmospheric moisture. This delay allows people working with Gastoxin and Phostex time to leave the area without the risk of exposure to phosphine gas. The length of time the paraffin acts as a retardant depends upon the thickness of the paraffin coating, the temperature of the tablet and pellet, and relative humidity of the atmosphere. A five percent by weight paraffin coating will produce a retardant effect for a period up to four hours from the time the seal is broken on the aluminum flask.

During manufacture, each tablet or pellet of Gastoxin or Phostex is coated with a thin layer of paraffin, which acts as a temporary seal. The sealed tablets or pellets are stored before and after sale to the consumer in hermetically sealed flasks of seamless aluminum. Gastoxin and Phostex are applied by exposing the tablets or pellets to the air in or near the product for the pesticidal action, in an enclosed area such as a grain elevator or a tobacco storage warehouse.

As soon as the flasks are opened, moisture begins to penetrate the cracks in the paraffin coating. When the chemical reaction of the active ingredient begins, the paraffin breaks up into a powder. The paraffin in no way contributes to the pesticidal action. A disposable powdery mass of paraffin and other chemical residue remains at the end of the chemical process.

ISSUE:

Are the products in question, Gastoxin and Phostex properly classifiable under the provision for mixtures not specifically provided for:

Item

432.10.. Mixtures that are in whole or in part of hydrocarbons derived in whole or in part from petroleum, shale oil, or natural gas.....
or under the inferior provision:

Other:

432.15 Pesticides.......?

LAW AND ANALYSIS:

Counsel, on behalf of the importer, has submitted two separate briefs in support of the position that the products in issue are properly classified under the inferior heading, Other: Pesticides, in item 432.15, rather than under the superior heading, Mixtures that are in whole or in part of hydrocarbons derived from petroleum, shale oil, or natural gas, in item 432.10, TSUS.

In the first brief, counsel argues that the products are properly classifiable under the eo nomine provision for pesticides, item 432.15, TSUS, and that further review is justified in this protest because the identical product is imported into other districts in the United States under item, 432.15, TSUS.

Counsel claims in the second brief that as a matter of law, the product is "not in whole or in part of" the hydrocarbons described in item 432.10, TSUS, and that there exists an established and uniform practice of classifying the product in item 432.15, TSUS, which practice Customs may not change without providing proper notice.

Headnote 10, General Headnotes and Rules of Interpreta- tion, TSUS, provides in pertinent part:

(c) an imported article which is described in two or more provisions of the schedules is classifiable in the provision which most specifically describes it; but in applying this rule of interpretation, the following considerations shall govern:
(i) A superior heading cannot be enlarged by an inferior heading indented under it but can be limited thereby;

(ii) comparisons are to be made only between provisions of coordinate or equal status, i.e., between the primary or main superior heading of the schedules or between coordinate inferior headings which are subordinate to the same superior heading;

Based on the facts presented, the product in issue is described in both items 432.10 and 432.15. Counsel for the importer argues that the product is properly classifiable under item 432.15 because the designation of products by name takes precedence over terms of general description. Counsel further argues that item 432.10 is inappropriate because this general category is clearly limited by the unqualified eo nomine tariff provision in item 432.15.

While it is true that under the rules of construction, TSUS, an article is properly classifiable under the provision which most specifically describes it, such classification must also be governed by all the applicable general interpretative rules.

Applying the above rules and principles of statutory construction, if the product is described in the superior heading in item 432.10, then the product is necessarily classified under this item. It is only necessary to resort to the heading, other, item 432.15, if the product to be classified is not described in the first competing superior heading.

Further, the rules of statutory construction of TSUS also allow only comparisons of equal headings, i.e., Mixtures that are in whole or part of hydrocarbon... versus, Other.. Again, as the general interpretative rules make plain, "(i) a superior heading cannot be enlarged by an inferior heading under it but can be limited thereby." Headnote 10, (c) (i). Counsel's argument to classify the products in issue under the provision for pesticides would mean comparing unequal headings and enlarging the inferior heading, which is contrary to the above- mentioned rule. This cannot be done.

Therefore, in light of the foregoing, counsel's argument that the products in issue are properly classifiable under the provision for pesticides, because the products are eo nomine specific, must necessarily fail.

However, in determining whether the presence of some ingredient in a product affects its classification, the issue must be determined on each case on the basis of the character of the article and the language and purpose of the tariff provision. Canada Dry Ginger Ale, Inc., v. United States, 43. Cust. Ct.1, C.D.2094 (1959), appeal dismissed, 47 CCPA 173 (1959).

General Headnote 9 (f) (iv) TSUS, provides: (iv) "in part of" or "containing" mean that the article contains a significant quantity of the named material. With regard to the application of the quantitative concepts specified in subparagraph....(iv) above, it is intended that the de mimimis rule apply.

In attempting to minimize problems arising out of the language of the above headnote, the revised schedules, TSUS, proposed that the provisions based on the "in part of" concept have been kept to a minimum, and where it is used the intention is that the component material be present in commercially
significant amount. Tariff Classification Study of the U.S. Tariff Commission (now the International Trade commission) (Explanatory Notes, Volume 1, at 14; November 15, 1960).

In determining whether the presence of a small quantity of an ingredient is "in part" of an imported product for tariff classification purposes, the courts apply a quantitative - functional test. Under this two part test the functional aspect of the "in part" ingredient is satisfied if the partial ingredient upon which classification is premised has a principal function. If this functional test is not satisfied, then the only other justification for allowing a partial ingredient to control classification is its presence in a quantity which has some independent commercial significance. F.W. Myers 7 Co., Inc. v. United States, 85 Cust. Ct. C.D.4876. 83, 86.

For example, in United States v. Cavalier Shipping Co., Inc., 478 F.2d 1256 (1973), 2 percent chloropicrin was added as a warning agent to a pesticidal mixture of methyl bromide. In holding that the chloropicrin fell within the scope of the de minimis exception for tariff purposes, the court stated that the chloropicrin in the importation did not serve a pesticidal purpose, nor was present in commercially meaningfully quantities. Id at 1258.

Also, in United States v. Aceto Chemical Co., Inc., 553 F.2d 685 (1977) (United States Court of Customs and Patent Appeals), the court held that a fungicide containing less than one percent benzenoid product as a wetting agent, was properly classifiable by the principal ingredient, thiuram, under item 425.36, TSUS. In making its decision, the court stated that the benzenoid ingredient falls within the de minimis status because it does not participate in the primary function of the product, but exhausts its function before the principal ingredient begins to operate. Id at 688-689.

If the functional test is satisfied, an ingredient in an imported product may control classification of that product if that quantity has some "independent commercial significance". For example, in a thorough review of the issue of the significance of an ingredient that is a part of a product, the appellate court in Varsity Watch Co. v. United States, 34 CCPA 155, C.A.D. 359 (1947), discussed the de minimis rule. In Varsity Watch Co., a small amount of gold was applied to the bezel of a watch case which gave the appearance of gold and increased salability of the item. The court held that the watch was classifiable "in part of gold" irrespective of the minute quantity of gold thereon. In making its decision the court stated that an ingredient or component may or may not be
disregarded for tariff purposes not necessarily because of the quantity present, but on the basis of varying circumstances, including Congressional intent, and whether or not the amount of material has changed the nature of the article or its salability. Id. at 163 (citations omitted). See also Genender Wholesale v. United States, 1 C.I.T. 278, 520 F. Supp. 278 (1981).

In applying the above cited two part test to the products in question, it is noted that the paraffin component of the product does not meet either part of the test. The primary function of the products in issue is pesticidal. The paraffin component of the products in no way contributes to the pesticidal action, but serves mainly as a protective coating for the pesticide. Further, in accordance with the above cited headnotes and case law, the paraffin in no way changes the nature of the products, nor enhances the value of the product thus serving any "independent commercial purpose."

HOLDING:

The products in issue, Gastoxin and Phostex, are properly classifiable under TSUS item 432.15, other, pesticides.

Since this case is decided on the above basis, this office will not address importer's argument of an established and uniform practice.

The protest should be allowed.

Sincerely,

John Durant, Director

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