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HQ 967022




March 31, 2004

CLA-2 RR:CR:GC 967022 AML

CATEGORY: CLASSIFICATION

TARIFF NO.: 9022.90.60.00

Mr. William Julich
Delmar International Inc.
147-55 175 Street
Jamaica, New York 11434

RE: Classification and NAFTA determination concerning selenium- coated, glass panels for Thin Film Transistor (“TFT”) instruments; Article 509

Dear Mr. Julich:

This is in response to your letter, dated March 9, 2004, on behalf of Direct Radiography Corporation, requesting a classification ruling and NAFTA eligibility determination, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of certain selenium-coated, glass panels for Thin Film Transistor (“TFT”) instruments. Photographs and technical literature were submitted for our consideration.

FACTS:

The selenium-coated glass panels at issue are manufactured according to the following steps from the following sources. The components of the panels are the beveled glass panes imported to the United States from Korea, the “backing” panel and lamination supplied and applied in the US, and the selenium coating applied in Canada. Following the application of the selenium coating in Canada, the articles are reentered into the United States for incorporation into the x-ray detectors.

The finished articles are described as TFT glass panels for x-ray detectors. The condition of the materials and stages of manufacture are described as a three-step process. You state that:

The “Korean panel” is a custom thin film transistor (“TFT”) glass panel that [following entry into the US] is inspected, laminated to a piece of plain backing glass and electrically tested by the importer. A thin film transistor (“TFT”) panel is a glass panel manufactured via a technology used for displays, whereby numerous metallic and organic coatings are applied to a sheet of glass to form a network of transistors on the surface of the glass.

The TFT panel itself is laminated to another sheet of plain glass as a “backing material.” There is no other backing, frame or channeling.

The selenium coating renders the TFT panels capable of capturing x-ray radiation in the form of an electrical charge. Until the selenium coating is applied, the TFT panel is not able to detect or capture x-ray radiation, therefore this coating is a key element in enabling these TFT panels to be used in a digital detector.

ISSUES:

What is the classification of the coated, laminated glass panels under the HTSUS, and whether the articles qualify for preferential NAFTA treatment?

LAW AND ANALYSIS:

Classification

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

The HTSUS provisions under consideration are as follows:

7007 Safety glass, consisting of toughened (tempered) or laminated glass: Laminated safety glass:
7007.29.00 Other.
9022 Apparatus based on the use of X-rays or of alpha, beta or gamma radiations, whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus, X-ray tubes and other X-ray generators, high tension generators, control panels and desks, screens, examination or treatment tables, chairs and the like; parts and accessories thereof: 9022.90 Other, including parts and accessories: Other:
Parts and accessories:
Other:
9022.90.60 Of apparatus based on the use of X-rays.
9030 Oscilloscopes, spectrum analyzers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of heading 9028; instruments and apparatus for measuring or detecting alpha, beta, gamma, X-ray, cosmic or other ionizing radiations; parts and accessories thereof:
9030.90 Parts and accessories:
Other:
Other:
9030.90.88 Other.

When interpreting and implementing the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, while neither legally binding nor dispositive, provide a guiding commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

In classifying the articles, Note 1 to Chapter 90 applies, and provides, in pertinent part, that:

1. This chapter does not cover:
(e) Goods of heading 7007, 7008, 7011, 7014, 7015 or 7017[.]

Similarly, Note 1(d) to Chapter 70, HTSUS, states that that chapter does not cover "... optically worked optical elements ... of [C]hapter 90[.]"

Heading 7007, HTSUS, provides, in pertinent part, for safety glass consisting of laminated glass.

EN 70.07, provides, in pertinent part, that:

The term “safety glass” covers only the types of glass described below and does not refer to protective glass such as ordinary wired glass and selective absorption glasses (e.g., anti-glare glass, X-ray protective glass). Safety glass incorporated in other articles and thus in the form of parts of machines, appliances or vehicles is classified with those machines, appliances or vehicles . . . (emphasis added).

We stated in Headquarters Ruling Letter (“HQ”) 966459 regarding similar articles that:

We find that the laminated panels of glass, in and of themselves, would not be referred to commercially as “safety glass.” The unrefuted evidence is that the Korean TFT panels are laminated with a glass backing only to provide stability in transit. There is no indication that the lamination enhances in any manner the function of the TFTs when they are complete. The addition of the selenium coating (in preparation for use as parts of X-ray apparatus) prior to entry supports this conclusion. Hence, the articles are not classifiable as articles of glass within Chapter 70 and therefore Note 1 to Chapter 90 does not exclude the articles from classification within Chapter 90.

Once the panels are coated with selenium in Canada, they have been further worked, and, for tariff purposes, can no longer be considered mere panels of laminated glass. However, as imported, they are incomplete or unfinished articles which must be further processed into detector modules which are X-ray receptor devices whose function is to detect radiations, convert them to light then to electrical signals. A CT scanner then processes these signals to create images that are displayed on a monitor. Information available to us with respect to substantially similar glass panels indicates that the further processing whereby the selenium coated glass panels are completed into X-ray receptor devices or digital detectors includes the depositing of additional, unspecified proprietary coatings on top of the selenium, attachment of various electronic components around the periphery of the glass panels, followed by mounting each assembled panel into a mechanical frame along with printed circuit assemblies and other electronic assemblies and cables. Note 2 to Chapter 90, HTSUS, provides as follows:

Subject to Note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules:

(a) Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8485, 8548 or 9033) are in all cases to be classified in their respective headings;

(b) Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading (including a machine, instrument or apparatus of heading 9010, 9013, or 9031) are to be classified with the machines, instruments or apparatus of that kind;

(c) All other parts and accessories are to be classified in heading 9033.

Note 2(a) to Chapter 90 is not applicable here. As indicated by Note 2(b), if the subject panels are suitable for use solely or principally with goods of heading 9022, HTSUS, they are classified in heading 9022, HTSUS. We find that the selenium-coated panels, designed and constructed to act as transistors in the x-ray machines, are classified under heading 9022, HTSUS, as other parts of x-ray machines.

This classification determination comports with prior CBP rulings: in NY H86818, dated January 30, 2002, and HQ 966459, dated August 5, 2003, we classified similar articles under heading 9022, HTSUS.

NAFTA Preference

The rules for determining whether the panels are "originating goods" of Canada and thus eligible for preferential tariff treatment under the provisions of the North American Free Trade Act (“NAFTA”) are provided for in General Note (“GN”) 12 of the HTSUS, which provides, in relevant part, as follows:

(a) Goods in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided therein. For the purposes of this note –

(a)(i) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (whether or not the goods are marked), when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn followed by the symbol “CA” in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Implementation Act. (b) For purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if:

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico, and/or the United States so that --

(A) except as provided in subdivision (f) of this note [de minimis provision], each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(B) the goods satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note.

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials....

Thus, by operation of GN 12, the eligibility of an article for NAFTA preferential treatment is predicated upon a finding that the goods are originating in the territory of a NAFTA party under GN 12(b) and that they are goods of Canada or Mexico under the NAFTA Marking Rules.

The components of the panels are the beveled glass panes from Korea, the “backing” panel and lamination supplied in the US, and the selenium coating applied in Canada. Therefore the panels qualify for NAFTA treatment only if the provisions of General Note 12(b)(ii)(A) are met; i.e., if the merchandise is transformed in the territory of Canada so that the non-originating materials (Korean panes) undergo a change in tariff classification or otherwise satisfy the rules set forth in subdivisions (r), (s), and (t) of that note.

As stated in the “Facts” above, the original beveled panes are imported to the US from Korea. Based on the information provided, the Korean panes are classified under heading 7006, HTSUS. Following importation into the US, the panes are laminated and are transformed by that process to be articles classifiable under heading 7007, HTSUS. The laminated panels are sent to Canada where they are coated with selenium. As discussed in the “classification” section above, the selenium coating transforms the articles into parts classifiable under heading 9022, HTSUS.

Because the panels are classified under subheading 9022.90.60, HTSUS, we apply the tariff shift rule for that subheading. General Note 12(t)/90.53 states "(A) a change to subheading 9022.90 from any other heading; or (B) no required change in tariff classification to subheading 9022.90, provided there is a regional value content of not less than: 1) 60 percent where the transaction value method is used, or 2) 50 percent where the net cost method is used.” Thus, the laminated glass (a product of Chapter 70) is transformed to an article of subheading 9022.90, HTSUS, by the application of the selenium coating and the articles will meet the tariff shift requirement. Therefore, the articles qualify as NAFTA originating goods.

HOLDING:

The subject selenium-coated panels are classified under subheading 9022.90.60.00, HTSUS, which provides for other parts and accessories of apparatus based on the use of X-rays. The General Column 1 rate of duty is 0.8% ad valorem. The articles qualify as NAFTA originating goods.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 181.100(a)(2). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 181.100(a)(2), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted.

Sincerely,

Myles B. Harmon, Director

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