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HQ 963541




February 23, 2000

CLA-2 RR:CR:TE 963541 RH

CATEGORY: CLASSIFICATION

TARIFFNO.: 4811.31.2010

Kenneth G. Weigel, Esq.
Kirkland & Ellis
655 Fifteenth Street, NW.
Washington, D.C. 20005

RE: Revocation of HQ 088322, dated April 8, 1991; Classification of packaging material for beverage containers; heading 4811; heading 4819; Amended Explanatory Notes; Jewelpak Corp. v. United States, 950 F. Supp. 343 (CIT 1996),

Dear Mr. Weigel:

This is in reply to your letter of August 25, 1999, on behalf of Tetra Pak, Inc., requesting reconsideration of Headquarters Ruling Letter (HQ) 088322, dated April 8, 1991, concerning the classification of rolls of packaging material for beverage containers (“folding carton stock”).

In HQ 088322, Customs classified your client’s folding carton stock in heading 4819, of the Harmonized Tariff Schedule of the United States (HTSUS), which provides, in part, for cartons, boxes, cases, bags and other packing containers, of paper or paperboard. You submit that the folding carton stock should have been classified in heading 4811, HTSUS, which provides, in part, for paper, paperboard, cellulose wadding and webs of cellulose fibers, coated, impregnated, covered or printed, in rolls or sheets.

We grant your request for confidential treatment of exhibits seven through twelve pursuant to 19 CFR § 1 77.2(b)(7). These documents provide illustrations and explanations of the detailed steps used in your client’s filling machine to create a finished beverage carton.

Pursuant to section 625(c), Tariff Act 1930, as amended (19 U.S.C. 1625(c)), notice of the proposed revocation of HQ 088322 was published on January 19, 2000, in the Customs Bulletin, Volume 34, Number 2/3. No comments were received.

FACTS:

Tetra Pak is the U.S. marketing company for Tetra Pak products in the United States, i.e., filling machines which package liquids in aseptic paper packages. Tetra Pak imports the packaging material and other items used in the filling machines.

The imported Tetra Pak packaging material is made using clay coated paperboard which is bleached and weighs more than 150 g/m2 and is 0.3 mm or more in thickness. It has a width sufficient to produce multiple package designs, which is web press printed and, as part of the printing process, scored in numerous places. This printed paper is then laminated with aluminum foil on one side and polyethylene on both sides. The packaging material consists of 65 percent paper, 30 percent polyethylene and 5 percent aluminum, by weight. After application of the foil and polyethylene, the packaging material is not scored or creased before importation. The roll of printed and coated paper is then slit into single carton design width rolls weighing approximately 200 pounds and containing the “carton images.”

Your submission lists fifteen detailed steps of the filling machine which we incorporate in this ruling, except that references to exhibits have been omitted:

1. The packaging material is in a roll that is fed into the machine.

2. In the “dating unit assembly,” the horizontal top and bottom folds for the edges of the container are creased into the packaging material by two crease bars with two creases for each crease bar. This crease is made by bending the packaging material at a 90º angle which creases the polyethylene, aluminum and paper, so that the package’s top and bottom folds can be created later.

3. A longitudinal strip is applied to the outer edge of the printed side of the packaging material, which is required to seal the packaging material together when the tube is created. The strip creates the seal that runs from the top to the bottom of the package.

4. An outer strip is applied to the outer side of the paper at the location of the opening. It is used to prevent the package from tearing when the package is opened.

5. A hole is punched into the packaging material at the location where the outer strip is applied to form the opening in each box to allow the consumer access to the product.

6. An inner patch/strip is applied to cover the access hole. The strip is applied onto the side of the paper what will be the inside of the package. It is required to preserve the sterility of the product.

7. The aluminum pull tab strip is applied to close the hole on the outside of the package. This is the strip the consumer removes to access the product.

8. At this point, the processed packaging material is still in one continuous length in flat form.

9. The material then passes through the hydrogen peroxide (aseptic) bath for sterilization. The rest of the filling process occurs in a sterile environment.

10. The prepared packaging material is then curved to form a continuous tube. By using forming stations, a tube is created and sealed using the longitudinal strip, hot air and pressure to join the two sides of the packaging material together. This tube is formed round, without any longitudinal creases because the tube must be of a circular cross section to fill properly. If the packaging material had longitudinal creases in it, the tube would not bend to a round shape; longitudinal creases would cause the tube to collapse and make filling impossible. Additionally, there is a round filling float assembly within the tube above where the longitudinal seals are formed that requires a round tube to function properly.

11. The continuous tube is then filled with product.

12. In the next step, the tube is converted into a container by the sealing of each end.

Also, the shape of the side and top begin to be formed by jaws which crease the packaging material. A set of mechanical jaws grabs the continuous tube below the liquid level, clamps the tube, and applies induction heat to form the bottom seal of the first package and the top seal of the second package. The first package is formed when the jaws clamp the tube. Knives cut the first package from the tube. The jaws then release the first package as the tube advances through the filler.

A second set of mechanical jaws grabs the tube again below the filling line and applies induction heat to form the bottom seal of the second package and the top seal of the third package. The second package is formed when the jaws clamp the tube. Knives cut the second package from the tube. The jaws then release the second package. The jaw assemblies, specifically the former flaps, create the longitudinal and transverse creases in the container. The mechanical jaw assemblies’ former flaps are similar to an external die as they have the shape of the sides of the final package. The former flaps come into and clamp down onto the product-filled tube. Through this action, the tube is compressed and the internal pressure from the product acts like a mandrel for forming the tube into the shape of the former flaps. Each of the two “flaps” has 3 panels. Additionally, the jaws serve to crease the transversal lines of the package while sealing the ends. The jaws thereby determine the shape of the sides of the package. They form the sides of the pillow shaped package. It is the shape of the flaps which causes the packaging material to crease at the paper’s scored locations and the container to take its shape.

13. Any improperly filled package or package out of design registration is ejected from the machine at this point.

14. Final forming takes place in the final forming station wheel and the completed, filled container is transferred to the exiting conveyor.

15. The completed, filled and shaped container exits the machine.

ISSUE:

What is the correct tariff classification of the packaging material under the HTSUS?

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied.

Additionally, in interpreting the headings and subheadings, Customs looks to the Harmonized Commodity Description and Coding System Explanatory Notes (EN), which are not legally binding, but are recognized as the official interpretation of the Harmonized System at the international level. It is Customs practice to follow, whenever possible, the terms of the EN when interpreting the HTSUS. T.D. 89-80.

In your opinion, the Tetra Pak packaging material is classifiable under heading 4811, HTSUS, which encompasses:

Paper, paperboard, cellulose wadding and webs of cellulose fibers, coated, impregnated, covered, surface-colored, surface-decorated or printed, in rolls or sheets, other than goods of the kind described in heading 4803, 4809 or 4810.

In HQ 088322, dated April 8, 1991, Customs classified your client’s “folding carton stock” in heading 4819, HTSUS, which provides for:

Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibers; box files, letter trays and similar articles, of paper or paperboard of a kind used in offices, shops or the like.

Customs found that the carton stock in HQ 088322 had been cut into rolls, creased, marked, punched, printed, lined and coated in such a manner that the character of the drink container became evident and it was committed to use as such. Thus, we dismissed Tetra Pak’s assertions that the imported merchandise fit within the terms of heading 4811.

We find several errors in HQ 088322. The ruling stated that heading 4811 “serves to classify unprinted, blank or bleached carton stock and parts of cartons which, by themselves, do not yet carry the character of a container.” This statement is simply incorrect. The scope of heading 4811 specifically encompasses printed products in rolls or sheets, and allows the products to be, among other things, coated or impregnated. Therefore, the material in HQ 088322 falls squarely within the terms of heading 4811, i.e., it is coated, covered printed and imported in rolls. As pointed out in your ruling request, Customs has consistently classified carton stock imported in rolls or sheets in heading 4811, and finished, but unassembled cartons in heading 4819. See NY 882641, dated March 15, 1993; NY B80969, dated January 14, 1997; NY 852997, dated June 7, 1990; NY 874961, dated June 5, 1992; NY 895794, dated March 28, 1994; and NY 867887, dated October 21, 1991.

Customs also erred in HQ 088322 in finding that the paperboard fell within the scope of heading 4819. The EN to heading 4819, both the current version and those in effect in 1991, provide, in part, that the heading includes “cartons, boxes and cases in the flat in one piece for assembly by folding and slotting (e.g., cake boxes).” Emphasis supplied. The ruling stated that the terms “in one piece” provide for cartons, boxes, etc., which “are complete in and of themselves, as opposed to boxes which have two or more components such as a bottom and top/lid.” We see no legal basis or explanatory guidance supporting this statement. The ruling further stated that “there is no restriction that would serve to exclude boxes or cartons in one piece from being imported in bulk or roll form.” We disagree.

In light of the guidance from the EN to heading 4819, we do not agree that the heading is intended to cover merchandise imported in rolls. However, even if boxes, cartons, etc. of heading 4819 were importable in bulk or roll form, we disagree that the carton stock in HQ 088322 was so far advanced that its character or identity as a container [in one piece] became evident. Customs found that the rolls of carton stock had been sufficiently advanced to be considered incomplete or unfinished containers and were no longer classifiable as a material of heading 4811, stating:

Simple coated paperboard material becomes classifiable as an [sic] carton of heading 4819, HTSUSA, when its character or identity as an article becomes evident an [sic] it has been finished or processed to the point at which it has become irrevocable committed to use as that article.

You argue that “irrevocably committed to use” and “identity as an article” are not tests under the HTSUS. Under GRI 2(a), HTSUS, the test is “essential character.” Furthermore, you assert that even if a GRI 2(a) analysis were applicable, classification would not be in heading 4819 because the printed and coated paper does not have the essential character of a container. To support these claims, you cite F.W. Myers. Inc. v. United States, 240 F. Supp. 333, 336 (Cust. Ct. 1965) (An essential characteristic of a box is that it be capable of use as a container), and Coty. Inc. v. United States, 54 Treas. Dec. 347 (1928) (Merchandise was classified as paperboard rather than unassembled boxes because the paperboard, though cut to size, was not susceptible for use as containers in that neither end was closed or capable of being closed without the addition of paste, glue, or other means of fastening).

Although Customs has applied factors such as irrevocably committed to use” and “identity of an article” to determine essential character under GRI 2(a). we nevertheless agree with you that the material in HQ 088322 does not possess the essential character of a container. The rolls of paperboard do not evolve into single beverage cartons [in one piece] until they have been creased, sanitized, filled with product, cut and sealed in the filling machine. All of these processes occur after importation as described in detail in the FACTS portion of this ruling.

Classification of the packaging material in heading 4811 is also supported by the recently amended EN to headings 4811 and 4819. The World Customs Organization, Harmonized System Committee, 15th Session, considered the classification of the “Tetra Brik” and “Tetra Brik Aseptic” products consisting of rolls of paper covered with polyethylene and/or aluminum, presented in rolls and used for the manufacture of packaging for beverages.

These products were made by the Swiss manufacturer and are the same in all material respects to the Tetra Pak products.

The Committee agreed that the creasing and printing of the products to facilitate production of the individual cartons did not justify classification as unfinished or incomplete cartons of heading 48.19. The Committee finally decided that the products should be classified under heading 48.11 rather than under heading 48.19 by application of GRI 2(a). See HSC Doc. No. 39.2 19E, ¶8 (February 17, 1995).

Amendments to the EN were adopted by the HSC on April 15, 1995, Annex L/23 to Doc 39.400E to read as follows:

CHAPTER 48.

Page 679. Heading 48.11. Item (C). New second paragraph.

Insert the following new second paragraph:

“Paper and paperboard for the manufacture of packaging for beverages and other foodstuffs, printed with texts and illustrations referring to the goods to be packaged therein, covered on both faces with thin transparent sheets of plastics, with or without a lining of metal foil (on the face which will form the inside of the packaging), are also classified in this heading. These products may be creased and marked to identify individual containers to be cut from the rolls.”

Page 686. Heading 48.19. New exclusion (c).

Insert the following new exclusion (c):

“(c) Coated, covered and printed paper or paperboard of heading 48.11, presented in rolls, used for the manufacture of containers and creased and marked to identify individual containers to be cut from the rolls.

As the court noted in Jewelpak Corp. v. United States, 950 F. Supp. 343 (CIT 1996), the EN were drafted subsequent to the Harmonized System nomenclature itself, and “will be modified from time to time by the CCC’s Harmonized System Committee.” In Jewelpak, the court confirmed that “Customs can properly use an amended EN to determine the common meaning of a tariff term, even though the merchandise at issue is then reclassified under a higher tariff.” Id. At 351.

Based on the foregoing reasons, we find that the coated, covered, printed packaging material imported in rolls is fully described by the heading test 4811 and is classifiable there by GRI 1.

HOLDING:

HQ 088322 is hereby revoked. The Tetra Pak packaging material is classifiable under subheading 4811.31.2010, HTSUS, which provides for “Paper, paperboard, cellulose wadding and webs of cellulose fibers, coated, impregnated, covered, surface-colored, surface-decorated or printed, in rolls or sheets, other than goods of the kind described in heading 4803, 4809 or 4810: Paper and paperboard, coated, impregnated or covered with plastics (excluding adhesives): Bleached, weighing more than 150 g/m2: 0.3 mm or more in thickness: Base stock for milk cartons and other beverage containers.”

Merchandise imported under this tariff provision is duty free.

HQ 088322, dated April 8, 1991, is hereby revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

John Durant, Director
Commercial Rulings Division


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