HQ 0087058 - Reconsideration of Headquarters Ruling Letter 082675; Affirmed; Sausage casings; Fibrous sausage casings; Cellulosic plastic; Tubes, pipes, hoses and fittings; Artificial guts; Paper; Articles of paper. - United States International Trade Commision Rulings

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HQ 087058

November 13, 1991

CLA-2 CO:R:C:T 087058 KWM

CATEGORY: CLASSIFICATION

TARIFF NO.: 3917.10.10

Mr. David O. Elliott
Barnes, Richardson & Colburn
475 Park Avenue South
New York, New York 10016

RE: Reconsideration of Headquarters Ruling Letter 082675; Affirmed; Sausage casings; Fibrous sausage casings; Cellulosic plastic; Tubes, pipes, hoses and fittings; Artificial guts; Paper; Articles of paper.

Dear Mr. Elliott:

This letter is in response to your request that we reconsider our decision in Headquarters Ruling Letter (HRL) 082675. After careful consideration, we find that HRL 082675 should not be revoked or modified.

FACTS:

History

By letter dated August 15, 1988, you requested a classification ruling under the Harmonized Tariff Schedule of the United States (HTSUSA) for "certain fibrous sausage casings." Your request was made on behalf of two domestic importers of such products, Brechteen Company (Brechteen) and Vista International Packaging Co. (Vista). In a follow-up letter dated November 15, 1988, you provided additional information and samples of the merchandise. As summarized in the November 15th correspondence, your position at that time was that "fibrous sausage casings are properly classifiable either under HTS 3917.10.50 or alternatively under HTS 4823.90.85." You argued several points in support of your position, emphasizing that the essential character of the fibrous sausage casings was imparted by the paper constituent.

In HRL 082675, dated January 6, 1989, Customs held that the sausage casings at issue were classified in subheading 3917.10.10, HTSUSA, contrary to your position. Our ruling was based on a finding that the essential character of the sausage casings was imparted by the cellulosic plastics material.

On January 26, 1989, you requested reconsideration of HRL 082675, asserting several grounds for revoking that decision. At that time Customs requested that you provide additional information regarding the product at issue. The file was later closed administratively, without response.

By letter dated April 20, 1990, you renewed your request
for reconsideration, providing the information request by Customs. Another meeting was held to discuss Customs' prior rulings.

Merchandise

Your submission of August 15, 1988, states that the casings are made of paper, regenerated cellulose and glycerin, in the relative quantities described in prior Customs Service ruling letters (See, HRLs 061462 and 073604). Although a precise description of the manufacturing process was not provided, we presume that it is similar to those described in prior rulings. Essentially, the process consists of creating a viscose solution through chemical means, and then extruding the viscose solution onto a continuous paper tube. A tube is formed by twisting a long strip of paper fed through the center of the extruder. The viscose coated/covered paper tube passes through a series of acid baths wherein the cellulose regenerates and the casing solidifies. Purifying baths remove the acid and other materials. Lastly, the casings are bathed in glycerin. The two principal components of the completed casings are the paper and the regenerated cellulosic plastics.

ISSUE:

Is Headquarters Ruling Letter 082675 correct in classifying the merchandise classified in heading 3917, HTSUSA?

If not, how should the merchandise be classified for tariff purposes? Specifically, is the merchandise classifiable under heading 4823, HTSUSA?

LAW AND ANALYSIS:

Your letter of January 26, 1989, lists several reasons you believe warrant our reconsideration of HRL 082675. Please be assured that we have considered all arguments made in behalf of Brechteen and Vista, in both the original and reconsideration request. Your reasoning is twofold: First, you argue in the August 15, 1988 letter that the TSUS-to- HTSUSA cross reference leads to subheading 3917.10.50, HTSUSA, based on the classification of identical merchandise under the TSUS. The cross reference to which you refer is not a legally binding document, nor was it intended to provide a direct correlation between TSUS and HTSUSA headings for classification purposes. We do not consider the cross reference indicative of any classification under the HTSUSA.

Second, you assert that GRI 3 is applicable to this merchandise and that the essential character of the fibrous sausage casings is imparted by the paper component. Your later correspondence emphasizes the essential character analysis, and it was on that basis that we issued HRL 082675. In your letter dated January 26, 1989, you again emphasize the essential character analysis. Therefore, we have considered below your assertion that the essential character of the sausage casing is imparted by the paper component.

As you know, classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI's).

The systematic detail of the harmonized system is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relevant Section or Chapter Notes. Before we resort to GRI 3 for the classification of this merchandise, we must first apply GRI's 1 and 2.

Neither the importer or Customs disputes that the regenerated cellulose material is considered a plastic under the HTSUSA. Heading 3917, HTSUSA, provides for:

3917 Tubes, pipes and hoses and fittings therefor (for example joints, elbows, flanges) of plastics:
3917.10 Artificial guts (sausage casings) of hardened protein or of cellulosic plastics materials:
3917.10.50 Of cellulosic plastics materials:

We find no general exclusion from Chapter 39, HTSUSA, which would apply to this product. We note, however, that legal note 8 to chapter 39, HTSUSA, indicates that the expression "tubes, pipes and hoses" includes "sausage casings and lay- flat tubing."

You assert that heading 4823, HTSUSA, also provides for this merchandise:

4823 Other paper, paperboard, cellulose wadding and webs of cellulose fibres, cut to size or shape; Other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers.

We note that legal note 1(f) to Chapter 48 may be applicable to the instant merchandise:

1. This Chapter does not cover:

(f) Paper-reinforced stratified sheeting of plastics, or one layer of paper or paperboard coated or covered with a layer of plastics, the latter constituting more than half the total thickness, or articles of such materials, other than wall coverings of heading 48.14 (Chapter 39).

Emphasis added. The instant merchandise is composed of a layer of paper coated or covered with a layer of plastics. It would appear to fall within the exclusion of note 1(f). To verify that conclusion, we consulted the Explanatory Notes to the HTSUSA. The Explanatory Notes are not legally binding on the Customs Service, but this office consults them in almost every instance. As your submission points out, the Explanatory Notes to Chapter 48 indicates that "sausage casings" are included in heading 4823. We note however, that the Chapter 48 Explanatory Note language is subject to the note 1(f) exclusion above.

The Explanatory Notes to Chapter 39 address the classification of articles made of plastics in combination with other materials:

This Chapter also covers the following products, whether they have been obtained by a single operation or by a number of successive operations provided that they retain the essential character of an article of plastics:

(a) Plates, sheets, etc. incorporating a reinforcement or a supporting mesh of another material (wire, glass,fibres, etc.) embedded in the body of the plastics.

(c) Paper reinforced stratified plastic sheeting, and products consisting of one layer of paper or paperboard coated or covered with a layer of plastics, the latter constituting more than half the total thickness, other than wall coverings of heading 48.14.

The provisions of the preceding paragraph also apply mutatis mutandis, to monofilaments, rods, sticks, profile shapes, tubes, pipes and hoses, and articles.

The above language parallels that found in legal note 1(f) to Chapter 48, HTSUSA. These notes, taken together, indicate an intent to classify articles (including tubes, pipes and hoses) of plastics and other materials as articles of plastics, provided that the plastics constituent comprises more than half the thickness. The Customs laboratory has determined that over half the thickness of the sample casings is that of the cellulosic plastics material. The above notes also indicate that the article must retain the "essential character" of an articles of plastics. Therefore, although we look to heading 3917 for eo nomine classification of the sausage casings under GRI 1, essential character is a factor for our consideration.

The basis for your reconsideration request is that the essential character of the articles at issue are imparted by the paper component, and that HRL 082675 failed to adequately consider the contribution of the paper. We do not agree.

The Explanatory Notes to GRI 3(b) state that "[t]he factor which determines essential character will vary as between different kinds of goods." We consider each essential character determination on it's own merits; taking into account the varying factors which present themselves. The Explanatory Notes further state that: "[essential character] may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods." These factors are not all inclusive; they are examples of types of considerations which contribute to an essential character determination.

In this case, paper is combined with regenerated cellulose to form the sausage casing. You argue that the paper promotes size uniformity, a critical characteristic for certain uses. However, similar statements could be made about the porosity of the casing attributable to the type of viscose
present. Both of these features are noted with equal distinction in the Vista literature you provided. You state that the "principal strength of the casing derives from the paper." You also admit, however, that the cellulose material "binds and reinforces the paper." We are not comparing fibrous casings to purely cellulosic casings; the two are distinct products. However, in examining the respective roles of the component materials, we do not find that the paper, by its nature or its role in the use of the product is so predominant as to dictate that the character of the casings is essentially that of the paper.

Other factors which influence an essential character determination include the cost, weight and bulk of the constituent materials. Your letter of April 21, 1990, includes both cost and weight breakdowns for the paper, cellulose and glycerine components. While the paper is the material of greatest expense, the regenerated cellulose is higher in weight. In your letter you assert that the paper represents the greatest bulk. Customs, through our own laboratory tests, has determined that the cellulosic plastic constitutes between 63 and 68 percent (%) of the sausage casings' total thickness. Bulk is a measure of size or mass. We are uncertain of the basis for your claim that the paper represents the greatest bulk, since measurements of both weight and thickness indicate to the contrary.

As noted, the holding of HRL 082675 was based on a finding that the essential character of the sausage casings was imparted by the paper component. We find no reason to revoke or modify that finding. A review of the facts indicates to us that both materials play a role in the use of the product, and while the paper may have higher cost, the weight and bulk of the plastics are predominant. These factors, taken together, weigh in favor of the cellulosic plastics component.

Combining our essential character analysis with the language of the relevant legal and explanatory notes, we find that the sausage casings were properly classified in subheading 3917.10.10, HTSUSA. The essential character of the casings, in our opinion is imparted by the plastics component.

Further, the regenerated cellulose comprises more than half of the total thickness of the sample casings. That fact applied to the language of the notes, mutatis mutandis, indicates an intent to classify sausage casings such as those at issue in subheading 3917.10.10, HTSUSA.

Other issues

Your letter of January 26, 1989, indicates that you were unaware of a prior ruling letter, HRL 081006. That ruling letter may be found through the Legal Precedent Retrieval System (LPRS) under the keywords "fiber-reinforced cellulosic- plastic sausage casing." The LPRS is available to the public at any Customs reading room, and the ruling letter is available upon written request.

Your January 26, 1991 letter also suggests that this office did not accurately consider the tariff headings which you advocated as the correct tariff classification. We regret that the ruling letter did not present an analysis detailed to
your satisfaction. However, please be assured that all of the information you submitted was considered. The correspondence contained in the file indicates a refinement of the issues from your perspective over a period of time, and our response was directed to that issue which was considered dispositive.

HOLDING:

Headquarters Ruling Letter 082675 is affirmed. The sausage casings at issue, described as "fibrous sausage casings" and consisting of paper reinforced sausage casings of regenerated cellulosic plastic are classified in subheading 3917.10.10, HTSUSA, as tubes, pipes or hoses of plastics, including artificial guts (sausage casings) of cellulosic plastics material. This classification is based on an interpretation of the relevant notes and our finding that the essential character of the casings is imparted by the cellulosic plastics material. The duty rate applicable to this classification is 6.6 percent ad valorem.

Sincerely,

John A. Durant, Director
Commercial Rulings Division

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