HQ 953655 - Application for further review of Protest No. 1001-93-100408, dated January 21, 1993; Microlith WA; Microlith K; 3215.90; ink; EN 32.04; Corporation Sublistatica, S.A. v. U.S. (CIT 1981); BASF Wyandotte (CIT 1987) - United States International Trade Commision Rulings

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HQ 953655

March 3, 1995

CLA-2 CO:R:C:F 953655 EAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 3204.17.9085

Area Director
U.S. Customs Service
6 World Trade Center
New York, New York 10048

RE: Application for further review of Protest No. 1001-93-100408, dated January 21, 1993; Microlith WA; Microlith K; 3215.90; ink; EN 32.04; Corporation Sublistatica, S.A. v. U.S. (CIT 1981); BASF Wyandotte (CIT 1987)

Dear Area Director:

This is a decision on a protest filed January 21, 1993, against your decision in the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of merchandise entered on July 15, 1992, liquidated on November 27, 1992.

FACTS:

The protestant entered the merchandise under subheading 3204.17.5090 (now 3204.17.9085), HTSUSA, a provision for synthetic organic coloring matter and preparations based thereon as specified in Note 3 to Chapter 32, other, other, other. Customs liquidated the merchandise as entered, and collected duties at 20 percent ad valorem.

The protestant now seeks reclassification of the goods under subheading 3215.19.00, HTSUSA, a residual provision for printing ink other than black printing ink, a provision bearing duty at the column one general rate of 1.8 percent ad valorem.

The Microlith WA range of products made by protestant is water or alcohol soluble. The Microlith K range is soluble in ketone. Imported in bulk, the goods are pigments in bulk powdered form that have been surface treated to maintain the fine, micro-particle size necessary for use in making the protestant's world-wide lines of finished pigments and pigment preparations making paints, primarily printing inks and plastics. Protestant's "1992 Pigments, Pigment Preparations and Special Dyes" marketing booklet describes its Microlith K range as "Pigment preparations", the major use of which is in making liquid ink for printing on manufactures of polyvinyl chloride (PVC), with other potential uses including colorant for vinyl, acrylic and aromatic polyurethane based general industrial paints and wood stains and for coloring in the mass of flexible PVC goods. The same publication describes the Microlith WA range of "Pigment preparations" having major uses as the colorant in wood stains and in liquid inks for packaging, PVC and aqueous applications.

Protestant has been importing the subject merchandise for quite some time. For example, Microlith Red BR-K was entered by the protestant on January 15, 1979, as a benzenoid dye under item 410.32 of the Tariff Schedules of the United States (TSUS). Microlith Red RBS-WA was entered by the protestant on July 10, 1987, as a benzenoid dye under item 410.34, TSUS.

On November 21, 1994, members of this office met with counsel for protestant and a member of the pigments division of protestant.

ISSUE:

Whether the imported goods used to manufacture those lines of protestant's products known as Microlith WA and Microlith K are classified under the HTSUSA as synthetic organic coloring matter and preparations based thereon in heading 3204 or as ink in heading 3215.

LAW AND ANALYSIS:

Merchandise imported into the U.S. is classified under the HTSUSA. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes.

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order.

The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the Customs Cooperation Council on the scope of each heading and, although neither binding upon the contracting parties to the Harmonized System Convention nor considered to be dispositive interpretations, they should be consulted on the proper scope of the System.

Heading 3204 covers in pertinent part synthetic organic coloring matter and preparations based thereon, particularly synthetic organic coloring matter and preparations based thereon as specified in note 3 to chapter 32.

Heading 3215 covers ink/s.

Legal Note 3, Chapter 32, HTSUSA provides, inter alia, as follows:

Headings 3203 [-] 3206 apply also to preparations based on coloring matter . . . of a kind used for coloring any material or used as ingredients in the manufacture of coloring preparations. The headings do not apply, however, to pigments dispersed in nonaqueous media, in liquid or paste form, of a kind used in the manufacture of paints, including enamels (heading 3212), or to other preparations of heading . . . 3215.

Protestant argues in the alternative for heading 3215 by claiming that the goods are not classified under heading 3204 because thay are ink as a matter of law and in fact, or that the goods are ink by reason of legal note 3, chapter 32, or that they are ink by reason of GRI 2(a), which essentially directs, a priori, that if the imported article cannot be classified by reason of GRI 1 because it is unfinished, then it shall be classified as the finished article so long as in its condition as imported the unfinished article has the essential character of the finished article.

Liquid ink consists of three components, namely colorant, either pigment or dye, binder and solvent. See Corporation Sublistatica, S.A. v. United States. 511 F. Supp. 805, 808-809 (CIT 1981). As long as it is present in the mixture of colorant and binder, even a minimum amount of solvent will support the conclusion that merchandise is ink. See BASF Wyandotte Corp. v. United States. 674 F. Supp. 1477, 1480-1481 (CIT 1987). Dry mixtures of only coloring matter and binder, but no solvent, may be inks, i.e., powder ink, for purposes of tariff classification. Corporation Sublistatica, supra.

Based upon Customs previous laboratory analysis as well as protestant's marketing description of the finished Microlith WA and K coloring preparations, we are of the opinion that the imported merchandise itself contains no binder and only a colorant that is surface coated, such that it cannot be an "ink", not even a "powder ink" of the kind at issue in either Corporation Sublistatica, supra or BASF Wyandotte, supra.

Since we find that the merchandise is not described by the terms of heading 3215, we are of the further opinion that classification of this merchandise is not controlled by that part of legal note 3 to chapter 32, which provides that goods of heading 3215 are excluded from classification under heading 3204.

Finally, we do not accept the GRI 2(a) option. Paragraph III of the Explanatory Note to Rule 2(a) advises that the rule does not normally apply to Section VI goods in view of the scope of the headings of that section. Heading 3204 covers, among other articles, "Other preparations based on synthetic organic colouring matter of a kind used for colouring any material or used as ingredients in the manufacture of colouring preparations." EN 32.04(I)(E). Furthermore, "Synthetic organic colouring matter may be soluble or insoluble in water. It has almost completely replaced natural organic colouring matter, particularly for dyeing . . . paper or wood. It is also used to prepare . . . inks of heading 3215, and for coloring plastics, . . . etc." EN 32.04(I) at 454. We are of the opinion that the broad scope of heading 3204 is precisely the circumstance in which GRI 2(a) does not normally apply.

We are of the opinion that Microlith WA and Microlith K range pigment preparations are all classifiable under subheading 3204.17, HTSUSA, a provision for synthetic organic coloring matter and preparations based thereon as specified in Note 3 to Chapter 32, which legal note provides in part that heading 3204 applies to preparations based on coloring matter of a kind used for coloring any material.

HOLDING:

You are instructed to deny the protest in full.

Microlith WA and Microlith K range coloring preparations are classified under subheading 3204.17.9085, HTSUSA, a provision for synthetic organic coloring matter, whether or not chemically defined; preparations as specified in note 3 to this chapter based on synthetic organic coloring matter; synthetic organic products of a kind used as fluorescent brightening agents or as luminophores, whether or not chemically defined; synthetic organic coloring matter and preparations based thereon as specified in note 3 to this chapter: pigments and preparations based thereon: other: other: other.

Merchandise entered in 1992 under the foregoing provision then enumerated as 3204.17.5090, HTSUSA, was dutiable at the column one general rate of 20 percent ad valorem.

A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1992, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to your mailing of this decision to the protestant. Sixty days from the date of this decision, the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Ruling Module in ACS and the public via the diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

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