HQ 955334 - Application for Further Review of Protest No. 5501-93-100320, dated September 21, 1993 and liquidated June 25, 1993 and thereafter; plastic powder coatings; Series 49 polyester resin powder coatings; Series 69 epoxy or epoxide resin powder coatings; HRL 951239 affirmed - United States International Trade Commision Rulings

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HQ 955334

March 10, 1995

CLA-2-CO:R:C:F 955334 EAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 3907.30.0000; 3907.99.0050

District Director
U.S. Customs Service
P.O. Box 619050
Airport, Texas 75261-9050

RE: Application for Further Review of Protest No. 5501-93-100320, dated September 21, 1993 and liquidated June 25, 1993 and thereafter; plastic powder coatings; Series 49 polyester resin powder coatings; Series 69 epoxy or epoxide resin powder coatings; HRL 951239 affirmed

Dear Sir:

This is a decision on a protest filed September 21, 1993, against your decision in the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of merchandise entered in 1993 and liquidated on June 25, 1993 and during July, 1993.

FACTS:

Series 49 polyester resin powder coatings were liquidated as entered under subheading 3907.99.0050, HTSUSA, a residual provision for polyesters in primary form, dutiable at the column 1 general rate of 3.1 cents/kilogram plus 9 percent ad valorem.

Series 69 epoxy resin powder coatings were liquidated as entered under subheading 3907.30.0000, HTSUSA, a provision for epoxide resins in primary form, dutiable at the column 1 general rate of 6.1 percent ad valorem.

The protestant has notified Customs that the Series 49 powder coatings are formulated for outdoor use and contain a polyester resin mixed with a hardener, filler, pigments (organic and inorganic) and minimal amounts of accelerator. The Series 69 powder coatings are formulated for indoor use and contain an epoxy resin mixed with a hardener, filler and pigments (organic and inorganic). Upon formulation, a dry mixture is heat extruded to yield a homogenous melt which is then cooled. Once cooled, the brittle material is chipped, then ground to a fine powder. The fine powder is vacuum screened for predetermined particle size, then containerized for transportation to the end user. The end user applies the coatings as follows. The dry powder is pneumatically fed from a supply reservoir to a spray gun where a low amperage, high voltage charge is imparted to the particles. The object to be coated is grounded so that the charged particles projected at it are strongly attracted to the surface of the object and electrostatically held thereon until melted and fused into a smooth coating in baking ovens.

Protestant seeks reclassification to heading 3208, HTSUSA, (thereunder, selected subheadings for the Series 49 and Series 69 products). Failing that, protestant seeks reclassification to heading 3210 for the Series 49 products and heading 3207 for the Series 69 product.

In correspondence dated April 13, 1994, following a meeting held in the Office of Regulations and Rulings, counsel for the protestant offered supplemental argument that the goods were not plastics in primary form, but paints or pigments.

ISSUE:

Whether powdered polyester resin and epoxide resin coatings are classified under the HTSUSA as plastics in primary form or pigment preparations or paints.

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; 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 3907, HTSUSA, describes, inter alia, epoxide resins and (other) polyesters in primary forms.

Heading 3210, HTSUSA, describes, in part, (other) paints and varnishes.

Heading 3208, HTSUSA, describes, among other goods, paints and varnishes based on synthetic polymers or chemically modified natural polymers, dispersed or dissolved in a non-aqueous medium.

Heading 3207, HTSUSA, describes prepared pigments, prepared opacifiers, prepared colors and similar preparations, of a kind used in the ceramic, enameling or glass industry, and certain other goods not relevant to this decision.

Note 1, Chapter 39, HTSUSA, provides as follows:

Throughout the tariff schedule the expression "plastics" means those materials of headings 3901 to 3914 which are . . . capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence . . . by . . . extruding . . . into shapes which are retained on the removal of the external influence.

Note 6, Chapter 39, HTSUSA, defines, for purposes of heading 3901 through 3914, the expression "primary forms" to include liquids, pastes, dispersions, emulsions, suspensions, solutions, blocks of irregular shape, lumps, powders, granules, flakes and similar bulk forms.

Note 4, Chapter 32, HTSUSA, directs that solutions of the products of headings 3901 through 3914 are classified in heading 3208 only when the weight of the solvent exceeds 50 percent of the weight of the solution.

The ENs to heading 3207 indicate that, while the heading covers a range of preparations used in the ceramic and glass industries and for coloring or finishing metal articles, the goods covered by the heading are of five kinds: (1) prepared pigments, opacifiers and colors that are dry mixtures formed by the heat treatment of metal oxides or certain salts; (2) vitrifiable enamels and glazes that are mixtures of silica with other products; (3) semi-fluid pastes with a basis of clay ("engobes"); (4) solutions or suspensions of metal compounds in various organic solvents ("liquid lusters"); and, (5) glass frit and all other varieties of glass in the form of powder, granules or flakes. Neither the Series 49 polyester resin nor the Series 69 epoxide resin fits any of the preceding descriptors.

Since both the Series 49 and Series 69 resins are dry powders, the condition of legal note 4, chapter 32 is not satisfied; therefore, neither product is classifiable under heading 3208. Furthermore, the ENs to heading 3208 identify such less-than-50 percent solutions as falling in chapter 39.

Although heading 3210, HTSUSA, is a residual provision for paints and varnishes, EN 32.10(A), concerning paints and enamels, makes it clear that such products are only drying oils, liquid binders containing hardener and pigment but not any solvent or other medium, and rubber based paints as further described. Neither of the resins involved in this Protest Review Decision is any one of the three types of products described in the foregoing Explanatory Note. Whereas liquid varnishes containing no solvent do fall under heading 3210, only liquid varnishes containing no solvent and consisting of liquid plastics and a hardener do so. Even if it could be argued that the Series 49 and Series 69 resins are "varnishes" if not paints, they are not liquid varnishes of heading 3210.

The Explanatory Note to heading 3907, HTSUSA, describes some of the uses of epoxide resins and certain polyesters, such as "alkyd resins" and "p olyallyl esters," to include surface-coatings, coatings and varnishes.

In HRL 951239 (August 11, 1992), this Office held that Series 49 polyester and Series 69 epoxide resin coatings were classifiable under subheadings 3907.99.0050 and 3907.30.0000, HTSUSA, respectively.

We remain of the opinion that the classification of the goods was correctly determined in HRL 951239, supra, and upon liquidation of the entry protested herein.

HOLDING:

The protest should be denied.

Series 69 powder epoxy or epoxide resin is properly classified under subheading 3907.30.0000, HTSUSA, a provision that describes epoxide resins in primary form. Merchandise entered under the foregoing provision in 1992 was dutiable at the column one general rate of 6.1 percent ad valorem.

Series 49 powder polyester resin is properly classified under subheading 3907.99.00.50, HTSUSA, a residual provision for polyesters in primary form. Merchandise entered under the foregoing provision in 1992 was dutiable at the column one general rate of 3.1 cents/kilogram plus 9 percent ad valorem.

A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as a 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 the mailing of this decision by your office. 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 Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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