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HQ 964029




September 23, 2002

CLA-2 RR:CR:TE 964029 mbg

CATEGORY : Classification

TARIFF NO.: 4811.10; 6807

Timothy Moran
Port Director, St. Albans
50 South Main Street
Suite 100R
St. Albans, VT 05478-2198

RE: Request for Internal Advice No. 00/09; classification of fiberglass covered with asphalt

Dear Mr. Moran:

This is in response to an Internal Advice request, dated January 13, 2000, submitted by Fitch, King and Caffentzis, on behalf of IKO Industries Ltd., regarding the classification of roofing shingles under the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”).

FACTS:

This Internal Advice request concerns the classification of combinations of asphalt and fiberglass which are manufactured into roofing shingles. The issue arose when counsel for IKO Industries Ltd. (“IKO”), a Canadian manufacturer and importer of a variety of roofing products, objected to the classification, by the port of St. Albans, Vermont, of shingles made of fiberglass covered with asphalt as fiberglass in subheading 7019.39.5000, HTSUSA.

You have submitted this Internal Advice request to Headquarters to determine whether the decision in the case of IKO Industries Ltd v. United States, 904 F. Supp. 1389 (1995), concerning the classification principles for roofing shingles made of paper covered with asphalt should be applied to roofing shingles made of fiberglass completely covered with asphalt and also to roofing shingles made of textile materials completely covered with asphalt.

You have provided that based on the IKO case, you believe that fiberglass shingles completely covered with asphalt should be classified as fiberglass in heading 7019, HTSUSA, and textile materials completely covered with asphalt should be classifiable as textiles in Chapter 56 or 59, HTSUSA, rather than as articles of asphalt in heading 6807, HTSUSA.

Upon review of your request for Internal Advice, we are unable to issue a decision regarding the HTSUSA classification of roofing shingles with a base of textile fabric and completely covered in asphalt. After discussions with both the port of St. Albans and the Customs National Import Specialist for the subject merchandise, HQ is unable to determine a specific “textile” product that is at issue in the manufacturing of roofing materials. While we do not doubt that such a manufacturing process does exist in the industry, we have not received information on such a process from counsel or from other Customs offices. Therefore, we will not attempt to apply the specific factors of the IKO case to a hypothetical textiles product possibly classifiable in Chapter 56 or 59, HTSUSA, until such an issue is expressly raised with specific facts at issue and will only address the classification of shingles with a base of fiberglass or paper completely covered in asphalt.

You have also stated that you seek guidance on whether Customs has an obligation to publish a notice regarding the proposed change in classification. IKO’s counsel believes that IKO does not apply to other merchandise such as shingles with a base of textiles or fiberglass covered with asphalt.

ISSUE:

1) What is the proper classification of the subject roofing shingles under the HTSUSA?

2) Whether Customs has violated 19 U.S.C. § 1315(d), by instituting adverse to IKO Industries, a change of practice without prior publication in the Federal Register of notice thereof and requesting comments of interested parties?

LAW AND ANALYSIS:

I. CLASSIFICATION

In IKO Industries Ltd. v. United States, 904 F. Supp. 1389 (1997), aff’d in part, vac’d in part 105 F.3d 624 (Fed. Cir. 1997), vac’d in part, 969 F. Supp 1349 (1997), the Federal Circuit affirmed the decision of the Court of International Trade to classify paper based asphalt shingles and roll roofing, similar to the merchandise subject to this Internal Advice, as asphalted paper or paperboard in subheading 4811, HTSUSA. The Court opined that the shingles were more specifically provided for in heading 4811 because the ENs to Chapter 68 specifically exclude asphalted paper. IKO at 12-13. Even though lacking a definition for “roofing board”, the court determined that the scope of Chapter 68, HTS was not broad enough to cover [IKO’s roofing materials] because the term “ ‘roofing board’ suggest[ed] a stiff and rigid material.” Id. at 10. Using GRI 3(a), which provides that when goods are classifiable under two or more headings, the heading which provides the more specific description is preferred over a heading providing a more general description, the court then concluded that heading 4811 more specifically applied to the merchandise. The Court determined the classification was proper in heading 4811 because the heading described 1) the type of material (i.e., paper or paperboard); 2) the treatment to which the material was exposed (i.e., coated, impregnated, covered, etc.); and 3) the shape of the articles (i.e., rolls or sheets). Id. at 13. The Court further concluded, after analysis of the chapter notes and explanatory notes to Chapter 68, that the scope of Chapter 68, HTS cannot be interpreted broadly enough to cover the subject merchandise. Id. at 10.

Customs is bound by the decision of the CIT and therefore must classify the subject merchandise according to the factors which are established by the court in the subject IKO case. The merchandise before the court in IKO was only shingles and rolled roofing with a base of paper completely covered in asphalt. The court did not consider shingles or rolled roofing material constructed of other materials and limited its decision to those products based of paper or paperboard. Therefore, Customs will classify those roofing materials with a base of paper and completely covered in asphalt within heading 4811, HTSUSA, per the analysis of the courts in the IKO decisions.

You also seek clarification on whether the instant products may be potentially classified in chapter 70, HTSUSA. This chapter covers glass and glassware.

This chapter does not define “roofing boards”, however, it is clear from the language of the ENs to heading 7019, HTSUSA, that shingles with a base of fiberglass and completely covered in asphalt are outside of the scope of this heading. The ENs to heading 7019, HTSUSA also clearly indicate that the heading 6807 provision for "articles of asphalt" contemplates and encompasses within its coverage products consisting of a substrate, such as fiberglass, that is completely enveloped in a heavy or thick (as opposed to light or superficial) layer or coating of asphalt and used for roofing.

Application of the IKO factors to the subject merchandise constructed of fiberglass covered in asphalt is not appropriate. While the decisions of the CIT and CAFC are applicable to identical merchandise or merchandise of a class or kind that is similar, this office does not find that these products are considered to be similar merchandise. The base materials are distinctly different from one another in their physical compositions and appear to not share any common characteristics other than use as a base substance in roofing materials. While these products are roofing shingles, it is not possible to apply the principles of IKO which deal with shingles and rolled roofing material manufactured of paper covered with asphalt to shingles and rolled roofing material manufactured of fiberglass covered with asphalt. To do so would lead to misinterpretations of the Harmonized System as certain products are specifically excluded from certain headings. (See e.g. ENs to heading 7019 which specifically excludes roofing materials.)

II. APPLICATION OF 19 U.S.C. 1315(d)- ESTABLISHED & UNIFORM PRACTICE

Counsel for IKO has raised a claim of “established and uniform practice” under 19 U.S.C. 1315(d) in response to any action by Customs to reclassify the fiberglass shingles from heading 6807, HTSUSA. However, application of this statute to the subject merchandise is not appropriate. Customs does not intend to institute a change in practice and reclassify the shingles and roofing materials with a base of fiberglass and furthermore, the classification of the shingles and roofing materials with a base of paper is controlled by IKO.

It was the decision of the Court of Appeals for the Federal Circuit, not Customs, which enunciated clear principles of classification mandating the change in classification for asphalt paper, shingles and roofing material. Customs Regulations (19 CFR 152.16(e)), require that unless Customs otherwise directs, the principles of any court decision adverse to the government shall be applied not only prospectively, but also to all unliquidated entries and protested entries which have not been acted upon. Since it was the court decision which required the change in classification, no notice, either for a change of practice or for a change in a "binding" ruling, is required.

We find no need to further address IKO’s counsel’s claim for a uniform and established practice.

HOLDING:

The subject merchandise consisting of roofing materials with a base of paper completely covered in asphalt is properly classified in subheading 4811.10, HTSUSA, which provides for “Paper, paperboard, cellulose wadding and webs of cellulose fibers, coated, impregnated, covered, surface-colored, surface-decorated or printed, in rolls or rectangular (including square) sheets, other than goods of the kind described in heading 4803, 4809, 4810: Tarred, bituminized or asphalted paper and paperboard.”

The subject merchandise consisting of roofing materials with a base of fiberglass completely covered in asphalt is properly classified in heading 6807, HTSUSA, which provides for “Articles of asphalt or of similar material (for example, petroleum bitumen or coal tar pitch.”

You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles Harmon, Acting Director

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