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HQ 087835


January 8, 1991

CLA-2 CO:R:C:G 087835 RFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 4412.19.5010

Ms. Barbara Matarese
Acting Chief, CIE
U.S. Customs Service
6 World Trade Center
New York, New York 10048

RE: Difference of Opinion on Customs Form 6431; brick veneer panels or modular panels

Dear Ms. Matarese:

This is in response to your memorandum dated August 22, 1990 and concerning a difference of opinion on Customs Form 6431. The form originated in the district of Champlain, New York. It is dated January 26, 1990, and concerns Entry No. 551-12091240. The entry date is January 9, 1990. In your memorandum, you have requested that we resolve a difference of opinion existing between Customs officials in the district of Champlain and in the New York office concerning the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The merchandise may be described as brick veneer panels or modular panels. The panels consist of 1/2 inch thick slices of modular fired unglazed clay bricks (i.e., thin veneer bricks) set on a 3/8 inch thick piece of exterior grade plywood with a 1-1/8 inch layer of rigid polyurethane insulation between the brick slices and plywood. Each ply of the plywood is less than 6 mm in thickness and is made of coniferous (Douglas fir) wood. The panels are intended for attachment to the exterior or outside walls of buildings.

Customs officials in the district of Champlain believe that the instant product is properly classified under heading 6907 whereas Customs officials in the New York office believe that it is properly classified under heading 4412.

ISSUE:

What is the proper tariff classification under the HTSUSA of paneling for use on the exterior or outside walls of buildings that consists of 1/2 inch thick slices of unglazed clay bricks set on a 3/8 inch thick piece of plywood (each ply being less than 6 mm in thickness and made of coniferous wood) with a 1-1/8 inch layer of rigid polyurethane insulation between the brick slices and plywood?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 states, in part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and..., [unless otherwise required, then according to the remaining GRIs, taken in numerical order]." When goods are, prima facie, classifiable under two or more headings, classification is to be effected pursuant to the provisions of GRI 3. GRI 3(b) states, in part, that "[m]ixtures [and] composite goods consisting of different materials or made up of different components...which cannot be classified by reference to 3(a)...[(i.e., there exists no heading that provides the most specific description among headings providing a more general description)], shall be classified as if they consisted of the material or component which gives them their essential character...." Explanatory Note Rule 3(b)(VIII) states, in part, that "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods."

In the instant classification analysis, there exist two headings under which the product may be potentially classified: 4412 and 6907. Heading 4412 provides for plywood, veneered panels and similar laminated wood. Guidance concerning the characteristics and properties of the articles provided for under this heading can be found in the Explanatory Notes to heading 4412:

Panels of any...[of the articles provided for under heading 4412]...may be covered with other materials such as base metal or plastics. In addition, the products of this heading may be worked to form the shapes provided for in heading [4409], curved, corrugated, perforated, cut or formed to shapes other than square or rectangular or submitted to any operation provided it does not give them the character of articles of other headings.

In view of the above, it is clear, then, that panels containing plywood and covered with materials of various types are to be classified under heading 4412.

The alternate heading under which the goods may be potentially classified is heading 6907. This heading provides for "unglazed ceramic flags and paving, hearth or wall tiles; unglazed ceramic mosaic cubes and the like, whether or not on a backing." The phrase "on a backing," however, only applies to and only modifies the terminology "unglazed ceramic mosaic cubes and the like" because of the semicolon immediately following the term "wall tiles" (i.e., the semicolon signals the end of one article description and the beginning of another article description within the provisions for heading 6907). Accordingly, as the instant product consists of, among other things, unglazed ceramic wall tiles (which is the article description determined to be appropriate for unglazed thin veneer bricks in Headquarters Ruling Letter 085566), it is only these terms of heading 6907 that are to be compared and contrasted against the terms of heading 4412 in the instant classification analysis.

As indicated above, both headings 4412 and 6907 provide for articles of which the instant product is composed. Therefore, the product is, prima facie, classifiable under both of these headings. (With respect to the polyurethane found between the thin bricks and plywood, this is merely a material used in making the panels. Heading 3909 provides for polyurethane. This heading, however, is not a competing heading because it only provides for a material found in the panels and not for the more specific description of articles made of a material found in the panels--as headings 4412 and 6907 so provide.)

The instant product is described as and is used as a panel for covering the exterior or outer surface of a building. The product would retain the characteristics and properties of a panel if a material other than thin veneer bricks covered the outer surface of the plywood because the product could function as a panel with any number of other coverings (e.g., aluminum, vinyl, rock). It is the plywood, however, that imparts the shape, structure and underlying support to the panel. As such, it is the plywood that gives the instant panel its characteristics and properties as a surface covering for buildings. Therefore, the role of the plywood in relation to the use of the panel gives the panel its essential character. The instant product, therefore, must be classified as if consisting of the plywood, pursuant to GRI 3(b).

HOLDING:

The above-identified product is classified under subheading 4412.19.5010, HTSUSA, which provides for, among other things, plywood, plywood consisting solely of sheets of woods, each ply not exceeding 6 mm in thickness, with both outer plies of coniferous wood, other, with at least on outer ply of Douglas fir (Pseudotsuga menziesii).

Goods classified under subheading 4412.19.5010 and qualifying for special tariff treatment under the United States- Canada Free-Trade Agreement (FTA) receive a rate of duty during 1991 of 5.6 percent ad valorem. The general rate of duty is 8 percent ad valorem. Certain goods classified under subheading 4412.19, however, may also qualify for special tariff treatment under subheading 9905.00.20 and the FTA. Within this subheading are classified "[a]rticles provided for in subheadings 4412.19 or 4412.99, if tongued, grooved or rabbetted continuously along any edge and of a type used in the construction of walls, ceilings or other parts of buildings." Goods classified under subheading 9905.00.20 and qualifying for special tariff treatment under the FTA during 1991 receive a rate of duty of 2 cents per kilogram plus 1.6 percent ad valorem. This latter rate under the FTA set forth in chapter 99 is in lieu of the former rate under the FTA set forth in chapter 44.

Sincerely,

John Durant, Director
Commercial Rulings Division

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