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HQ 960961




April 27, 1998

CLA-2 RR:CR:GC 960961 MGM

CATEGORY: CLASSIFICATION

TARIFF NO.: 2707.60.90

Port Director, Port of New York c/o Chief, Residual Liquidation and Protest Branch 6 World Trade Center
Room 761
New York, New York 10048-0945

RE: Protest 1001-97-103540; Cresylic acid (with cresol levels below 75%)

Dear Port Director:

This is our decision on Protest 1001-97-103540, concerning your classification decision regarding the chemical compound "Cresylic Acid (with cresol levels below 75%)" under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this decision, consideration was given to submissions of counsel for the protestant dated August 4, 12, 13, 1997, and September 29, 1997, as well as arguments presented by counsel in a meeting at our office on August 7, 1997.

FACTS:

The subject commodity is cresylic acid. Cresylic acid is a generic name for coal tar derivatives containing isomers of meta, para, and ortho cresols, xylenols, phenol, and other higher phenols. A cresol is a compound which has both a hydroxy group and a methyl group affixed to a benzene ring. Meta, para, and ortho refer to the relative positions of these two groups on the ring. A xylenol has a hydroxy group and two methyl groups affixed to a benzene ring; five different isomers are possible. Phenol is used both to describe a specific compound where a hydroxy group is attached to the benzene ring, and to describe "a class of aromatic organic compounds in which one or more hydroxy groups are attached directly to the benzene ring. Examples are phenol...the cresols, xylenols." Hawley, The Condensed Chemical Dictionary, tenth ed. Customs Laboratory Reports (No. 2-96-21564-001 dated 5-16-96; No. 2-97-20822-001 dated 3-5-97) showed that the sample is mainly composed of isomers of xylenol, isomers of cresol, and other alkyl phenols. The sample, a mixture of phenols, does not contain metacresol, orthocresol, paracresol, and metaparacresol all the foregoing having a purity of 75% or more by weight.

Protestant was directed to enter the merchandise under subheading 2707.60.2000, HTSUS, as "Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the nonaromatic constituents: Phenols: Other." Protestant asserts that the merchandise is properly classifiable under subheading 2707.99.50, HTSUS, as "Oils and other products of the distillation of high temperature coal tar; similar products in which the weight of the aromatic constituents exceeds that of the nonaromatic constituents: Other: Other." The ten entries here protested were made from February 1996 to February 1997, and liquidated in the period from February 14, 1997, to May 2, 1997. A protest was timely filed on May 15, 1997.

ISSUE:

Whether cresylic acid is properly classifiable under subheading 2707.60.90, HTSUS, a retroactive provision of the HTSUS promulgated after the date of protest.

LAW AND ANALYSIS:

Merchandise imported into the U.S. is classified under the HTSUS. 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 requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law.

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.

Subsequent to the protest being filed, modifications were made to the HTSUS. Notice of these changes was published in the Federal Register on March 11, 1998 (63 FR 11946). Subheadings 2707.60.10 and 2707.60.20 were deleted from the HTSUS by action of the Office of the United States Trade Representative (USTR) titled "Technical correction to the Harmonized Tariff Schedule of the United States." The USTR made this modification pursuant to authority granted by Congress to the President in section 604 of the Trade Act of 1974 and delegated by the President to the USTR in Presidential Proclamation No. 6969 of January 27, 1997 (62 FR 4415). The following new subheadings were inserted in lieu of the deleted provisions:

[2707 Oils and other products of the distillation...:] [2707.60 Phenols:]
2707.60.05 Containing more than 50 percent by 2.9›/kg + 12.5% . weight hydroxybenzene.
2707.60.10 Metacresol, orthocresol, paracresol 0.9›/kg + 3.1% and metaparacresol, all the foregoing having a purity of 75 percent or more by weight.
2707.60.90 Other Free

This provision is retroactive "with respect to articles that are entered, or withdrawn from warehouse for consumption, on or after December 31, 1995." As the instant merchandise was entered after this date, the new provisions are applicable to its classification.

Evaluation of the Customs laboratory reports reveals that subheading 2707.60.05, HTSUS, and subheading 2707.60.10, HTSUS, are inapposite.

HOLDING:

The protest should be granted. Cresylic acid with cresol levels below 75% is correctly classified under subheading 2707.60.90, HTSUS, and is duty-free.

In accordance with section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office together with the Customs Form 19, Notice of Action, 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 the decision. 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 to the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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