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HQ 964900




September 4, 2002

CLA-2 RR:CR:TE 964900 RH

CATEGORY: CLASSIFICATION

TARIFF NO.: 4409.10.9040

Port Director
U.S. Customs Service
111 West Huron Street
Buffalo, NY 14202

RE: Protest number 0901-00-100490; wooden loading boards; heading 4415; heading 4409; 19 U.S.C. §1625(c)(2)

Dear Sir:

This is in reply to your memorandum dated February 9, 2001, forwarding protest and application for further review of protest (AFR) number 0901-00-100490 to our office for review.

The law firm of Hughes, Hubbard & Reed, LLP, timely filed the protest on behalf of BB Pallets, Inc. The protest is against Customs classification of wood blocks with a face groove running along the length under heading 4409 of the Harmonized Tariff Schedule of the United States (HTSUS).

Customs liquidated the entry in question on September 15, 2000. Review is warranted pursuant to 19 CFR §§174.24 and 174.25.

Our office met with counsel for the protestant on August 18, 2000, to discuss the same issues raised in this protest.

FACTS:

On January 12, 2000, the protestant entered a shipment of wooden boards into the United States from Canada, under subheading 4415.20.8000, HTSUS, as loading boards. On July 6, 2000, Customs issued a Notice of Action (Customs Form 29) concerning the entry in question, advising the protestant that the correct classification of the merchandise was under subheading 4409.10.9040, HTSUS.

Counsel describes the merchandise in the protest as follows:

The entry at issue . . . consists of two different types of wooden loading blocks. One package of the merchandise includes 2592 wooden loading blocks with a groove, while the other includes 8668 loading blocks without a groove. These wooden loading blocks are made from softwood lumber

In a letter from counsel, dated July 25, 2000, to the Port of Buffalo in response to the CF 29 issued on the entry under protest, counsel stated that “. . . both hardwood and softwood lumber is included in the entries at issue.” and are imported in multiple sets of four. They have been made to customer specifications, varying in width and length to fit precisely the particular merchandise to be bound and transported.

The wooden loading blocks are shipped and used in multiple sets specifically to bind on all sides unwieldy loads of merchandise, such as lengths of pipe. Generally, four pieces are used to form a crate around the merchandise. The sets of loading blocks are either strapped to the merchandise such that the loading blocks meet each other at the corners, or, sometimes, they are nailed together after importation to form the crate. The resulting unit can then be lifted off the ground to be handled or transported as on a platform by forklifts or other appliances. The grooves or notches are necessary with some types of merchandise to prevent the strapping used to secure the wooden blocks from slipping. Some customers require the loading blocks to be further refined to avoid jamming automatic packing machines, to reduce damage to merchandise when stacked or to transport particular types of merchandise. Some merchandise requires shaped ends to provide a tighter hold and render the loading blocks stronger by reducing the likelihood the ends may split or weaken the strapping. Thus, through the combination of these features, the different types of loading blocks are tailored for the specific purpose of binding merchandise for handling and transportation, resulting in a unique product specifically suited, purchased and imported for the purpose of packing merchandise.

The protestant argues that the imported boards are properly classified under heading 4415, HTSUS, as loading boards. Additionally, the protestant claims that it has consistently entered its merchandise under heading 4415, HTSUS, and is entitled to treatment under 19 U.S.C. §1625(c)(2).

We note that the merchandise in question was commingled, and the protestant failed to present to Customs any evidence to separately classify boards with and without a groove. Accordingly, Customs liquidated all the merchandise in question under subheading 4409.10.9040, HTSUS.

ISSUES:

Are the wood boards with a groove along the edge classified in heading 4409, HTSUS, as continuously shaped wood or under heading 4415, HTSUS, as load boards?

Is the protestant entitled to a treatment under 19 U.S.C. §1625(C)(2)?

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's taken in order.

Additionally, the Explanatory Notes (EN’s) to the Harmonized Commodity Description and Coding System constitute the official interpretation of the nomenclature at the international level. The EN’s are not legally binding. However, they do represent the considered views of classification experts of the Harmonized System Committee. It has therefore been the practice of the Customs Service to follow, whenever possible, the terms of the EN’s when interpreting the HTSUS.

Heading 4415, HTSUS, provides for “Packing cases, boxes, crates and similar packings, of wood; cable-drums, of wood; pallets, box-pallets and other load boards, of wood; pallet collars of wood.”

At the time of entry, heading 4409, HTSUS, provided for “Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, molded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger-jointed.”

The protestant argues that the boards are classified under heading 4415, HTSUS, in accordance with GRI 2(a), because they are shipped in multiple unassembled sets, are specifically cut and shaped for the purpose of binding and transporting customers’ particular merchandise and have the essential character of finished, assembled loading boards.

Customs has issued several rulings addressing the type of merchandise in question. In NY F86079 dated May 10, 2000, Customs classified precut, pre-grooved wooden boards in heading 4409, HTSUS. The boards in that case were “2 x 4”, “4 x 4” or intermediate sizes, in lengths ranging from 40 inches to 10 feet. Each board had square cut ends and a groove, ¾” to 1” wide and ½” to ¾” deep,
running the entire length of one face. The boards were intended to be placed groove side down. Goods such as plywood sheets or steel mill products would be stacked on top of them and strapping would be threaded through one end of each groove, traversing its entire length and out the other side. The strapping would then be wrapped around the circumference of the stacked goods and cinched tightly to stabilize the load. The grooves in the wood were intended to ensure that the strapping, boards and load would remain secured to one another during all subsequent handling and shipping.

In that ruling, Customs addressed an argument similar to the protestant’s - that the merchandise was classifiable as load boards under heading 4415, HTSUS. We stated that a load board, as defined in the EN and contemplated by the heading, is a “platform” generally consisting of multiple pieces of wood and capable of holding a quantity of merchandise. We found that a “2 x 4”, with or without a groove, cannot reasonably be construed as a platform of heading 4415, HTSUS. Customs classified the grooved wood in that case under heading 4409, HTSUS, as wood continuously shaped along any of its edges or faces.

Additionally, in NY B86507, dated August 18, 1997, Customs classified strapping boards ranging in size from “2 x 3” to “2 x 6” and in lengths from 2 feet to 16 feet with a ¾” wide and ¼” deep groove running down the length of the board in heading 4409, HTSUS. The purpose of the grooves on the boards in that case was to hold a strap in place during shipping. See also, NY B83844 dated April 17, 1997 (grooved “2 x 4” lumber for dunnage was classified in heading 4409, HTSUS), and NY C82518, dated January 7, 1998 (lumber with a notch or bevel along the length of the board was classified in heading 4409, HTSUS).

Based on the above precedent, we find that Customs correctly classified the boards in question under subheading 4409.10.9040, HTSUS.

The second issue raised is a claim of treatment under 19 U.S.C. §1625. The revocation procedures set forth in section 625 of the Tariff Act of 1930, as amended, 19 U.S.C. §1625 (1994), read:
c) Modification and revocation

A proposed interpretive ruling or decision that would –

(1) modify (other than to correct a clerical error) or revoke a prior interpretive ruling or decision which has been in effect for at least 60 days; or

(2) have the effect of modifying the treatment previously accorded by the Customs Service to substantially identical transactions; shall be published in the Customs Bulletin. The Secretary shall give interested parties an opportunity to submit, during not less than the 30-day period after the date of such publication, comments on the correctness of the proposed ruling or decision. After consideration of any comments received, the Secretary shall publish a final ruling or decision in the Customs Bulletin within 30 days after the closing of the comment period. The final ruling or decision shall become effective 60 days after the date of its publication.

With regard to 19 U.S.C. §1625(c)(2), the protestant claims that BB Pallets, Inc., has been producing wooden loading blocks for the past seven to eight years and has been importing them into the United States since 1996, consistently under heading 4415, HTSUS. In support of that claim, the protestant submitted a chart that includes entries from May 1997 to August 2000.

To substantiate a claim for treatment under 19 U.S.C. §1625(c)(2), Customs requires evidence of a consistent classification treatment by it on identical or substantially identical transactions. The showing must go back two years prior to the date of the last liquidated entry subject to the claim. The entry information must include a list of every entry of the merchandise both liquidated and unliquidated up to the point where the importer was advised to change the classification to that asserted by Customs, the entry number, port of entries, and it must identify any entries that were subject to examination by Customs. The request must also provide the tariff classification, dollar value and the volume of the merchandise. We also require a statement from the importer or his designee that there have been no entries of the merchandise under a tariff provision different from the claimed treatment provision for the same or similar merchandise. This information will then be verified with the affected ports.

The information provided by the protestant is not only contradictory, but it does not substantiate a finding of treatment. During the time frame in question, the protestant’s entries were either paperless or defaulted in by-pass, i.e., the entries were not reviewed by Customs and liquidated as entered by the protestant.

In verifying the veracity of the protestant’s claim of treatment, Customs randomly reviewed some of the entries on the protestant’s chart. We discovered that invoices for some entries did not describe the merchandise as wooden loading blocks, but rather as pallet components, pallets tops and bottoms, pallet boards or pallet sets.

Evidently, the protestant did not review the entries it submitted to Customs, or it intentionally attempted to mislead Customs by listing entries liquidated under heading 4415, HTSUS, regardless of whether the merchandise was the same or similar to the merchandise at issue.

Moreover, our research reveals over 200 line items from various entries between October 1999 to August 2000, which the protestant failed to identify. Furthermore, entries cited on CF 29’s issued by the Ports of Champlain and Detroit, covering the same merchandise, were not identified on the protestant’s chart.

We note that Customs issued three rulings, cited above, covering merchandise with the same characteristics as the boards in question, all prior to the importation of the subject merchandise. In those rulings, the merchandise was classified under heading 4409, HTSUS. Any importer searching the publicly available rulings would have been able to locate those rulings.

Accordingly, the protestant’s claim of treatment is denied.

HOLDING:

The protest is DENIED. Customs correctly classified the merchandise in question under subheading 4409.10.9040, HTSUS, as continuously shaped wood. The merchandise is duty free.

At the time of entry of the subject merchandise, softwood lumber first manufactured into a product classifiable in subheadings 4407.10.00, 4409.10,10, 4409.10,20 or 4409.10.90 of the HTSUS in the provinces of Ontario, Quebec, British Columbia, or Alberta required that the Government of Canada issue a permit and collect appropriate fees. The imported merchandise is classifiable under subheading 4409.10.90, HTSUS, and therefore the permit information is required.

In accordance with section 3A(11)(b) of Customs Directive Number 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 30 days from the date of this letter.

Thirty days from the date of the decision, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel, and to the public on the Customs Home Page of the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B Harmon, Acting Director
Commercial Rulings Division

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