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HQ 950875




MARCH 30, 1992

CLA-2:CO:R:C:M 950875 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7326.90.90

District Director of Customs
1 East Bay Street
Savannah, Georgia 31401

RE: Reel Spool; Reel Section Component for Papermaking Machines; Paper Web Holding/Supporting Device; Headings 8439, 7326; Section XVI, Note 1(c); HQ 056271; PRD 1703-91-100086

Dear Sir:

This is our decision on Application for Further Review of Protest No. 1703-91-100086, filed by Tampella Paper Machinery, Inc., Atlanta, on the classification and appraised value of certain reel spools from Finland.

FACTS:

Reel spools are used with the reel section of a papermaking machine which essentially collects the paper in a manner which makes it easier to transport and further process. The reel spool is a rotating metal cylinder which holds paper web wound onto it by the reel prior to its being transported to the slitter/winder. When full, an overhead crane lifts the reel spool out of the reel section and replaces it with an empty one.

The merchandise was entered under subheading 8439.20.00, Harmonized Tariff Schedule of the United States (HTSUS), a duty-free provision for machinery for making paper or paperboard. You rejected this classification because of an exclusionary legal note, and liquidated the entry under subheading 7326.90.90, HTSUS, which provides for other articles of iron or steel.

Protestant now contends that subheading 8439.99.10, HTSUS, a provision for other parts of machinery for making paper or paperboard, applies. In addition, protestant contests the appraisement, noting that certain non-dutiable charges were included in the appraised value. - 2 -

ISSUE:

Whether reel spools used with papermaking machines are classifiable as parts of such machines; whether the appraisement reflects appropriate deductions for certain nondutiable charges.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with 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 provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

Bobbins, spools, cops, cones, cores, reels or similar supports of any material are precluded from classification in chapter 84. See Section XVI, Note 1(c), HTSUS. Relevant Explanatory Notes on this note indicate that these articles are to be classifiable according to their constituent material.

The common characteristic shared by the listed terms is that they wind and/or hold a variety of materials or articles. They perform no mechanical function. By application of the rule ejusdem generis, reel spools used with papermaking machines are holders of the same class as those articles enumerated in Note 1(c). Reel spools are thus precluded from either of protestant's two claimed classifications.

Protestant cites a ruling dated March 13, 1978 (056271), in which [papermaking] reels were found to be classifiable free of duty under item 668.00, Tariff Schedules of the United States (TSUS), as machines for making cellulosic pulp, paper or paperboard. Initially, rulings under the TSUS are not binding under the HTSUS but should be considered on a case-by-case basis as instructive in interpreting parallel HTSUS provisions, particularly where the nomenclature in both provisions is the same and the text of the HTSUS does not require a different interpretation. More to the point, ruling 056271 relates in part to reels which are machines used in papermaking, and does not discuss reel spools which are parts of the reel section. Our position on reel spools under the TSUS is reflected in a protest review decision, dated May 12, 1982 (069670). In that decision, we held that reel spools were classifiable under item 657.20, TSUS, other articles of iron or steel, not coated or plated with precious metal. This ruling cited Schedule 6, Part 4, Headnote 1(i), TSUS, which contains exclusionary language substantially similar to the language of Note 1(c). - 3 -

With respect to the appraisement issue, you agree with protestant that the liquidation was performed without appropriate deductions for nondutiable charges. Therefore, no further discussion of this issue is warranted.

HOLDING:

Under GRI 1, the reel spools are provided for in heading 7326. Actual classification is in subheading 7326.90.90, HTSUS, other articles of iron or steel.

The protest should be allowed as to the appraisement and denied as to the classification. A copy of this decision should be attached to the Customs Form 19, Notice of Action, and forwarded to protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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