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HQ 967436




November 30, 2005

CLA-2 RR:CTF:TCM 967436 RSD

CATEGORY: CLASSIFICATION

TARIFF NO.: 8464.20.50

Port Director
U.S. Customs and Border Protection
610 S. Canal Street
Room 306
Chicago, Illinois 60607

RE: Protest #3901-04-101291; Classification of Optical Glass Lens Grinding Machines

Dear Port Director:

This is our decision on Protest number 3901-04-101291 filed by counsel on behalf of Loh Optical Machinery (Loh) against your classification of optical lens grinding machines under the Harmonized Tariff Schedule of the United States (HTSUS). The entries were liquidated on June 11, 2004, and the protest was timely filed on September 11, 2004. Counsel has notified us that after the protest was filed, Loh merged with Satis Vacuum of America, to form Satisloh North America, Inc., but in this decision we will continue to refer to the Protestant as Loh.

FACTS:

Protest 3901-04-101291 concerns three entries of three different models of lens-grinding and polishing machines. The machines at issue are the Loh Processing Center Model Gll-3A, the Spheromatic 120-2SL (SPM 120-2SL) and the Asphere Robotic Polisher All. The technical data sheets that were submitted with the protest indicate that the SPM, 120-2 SL, and the Gll-3A can work on the “producible materials” such as mineral glass, quartz, ceramics, crystals, suitable metals, semiconductor materials, composites and materials with similar characteristics.

The most common composite material that the subject machines work on is called “Zerodur”. A brochure from Schott North America, the company that produces “Zerodur”, describes the product as a glass ceramic material having the chemical characteristics and the hardness similar to optical glass. It is used for mirrors and lenses in astronomical telescopes among other applications.

The literature for the Spheronorm System indicates that it is used in precision optic manufacturing. Each system includes one Spheromatic Fining Machine Model (the SPM) and one Synchrospeed Polishing Machine Model (the SPS). The machine at issue here is the SPM. In addition to surfacing, it is used for diameter edging and chamfering, as well as for the processing of steps and recesses and tool dressing. The technical data sheet for the SPM 120-2 SL indicates that the function of the machine is for generating spherical lenses. It lists the producible materials that it works on as: mineral glass, quartz, ceramics, crystals, suitable metals, semi-conductor materials, composites and materials with similar characteristics. The technical data sheet for the GII-3/GII-3A also lists the producible materials that the machine works on as: mineral glass, quartz, ceramics, crystals, suitable metals, semi-conductor materials, composites and materials with similar characteristics.

Although Loh states that it does manufacture machines that work on both plastic and glass, according to Protestant’s counsel, the machines under consideration are used only to work glass and glass like materials. The machines under consideration are different from Loh’s other machines, which work both glass and plastic for several reasons. The items worked on by machines that work both plastic and glass are in continual rotation, while the items that are worked upon by the machines under consideration in this case are not in continual rotation. Furthermore, Protestant’s counsel explains that according to Loh’s technical staff, the machines at issue cannot be used for working plastic because the diamond-sintered tools in these machines would be quickly gummed up if they were used to work on plastic.

Counsel further explains that while Loh’s machines that work plastic and glass materials are used mostly to make lenses for eyeglasses, the three machines at issue are never used to make spectacle lenses. Instead, they are strictly used in the precision optics industry, for making items such as lenses for arthroscopic surgery devices, military sighting devices such as aircraft target sighting devices, and periscopes for military tanks. The subject machines are also used to produce prisms for various applications in which the direction of a light beam or a laser beam is to be changed.

Counsel further elaborates that machinery for precision optics is considerably more expensive than machinery used to make lenses for eyeglasses. Purchasers of precision optic machinery expect that this machinery will be used for precision optical applications only, and there is virtually no overlap as between the eyeglass industry and the precision optics industry.

Loh’s website lists their machines as either being “precision optics” or “opthamics”. The machines at issue are all listed as being “precision optic” machines. On September 21, 2005, counsel sent an e-mail to Office of Regulations and Rulings, which contained an attached affidavit from Lynn Stigler, who is a sales representative for Satisloh North America, Inc. Mr. Stigler states in his affidavit that Satisloh is the successor corporation after Loh merged with Satis Vacuum of America, and his responsibilities include the entire line of precision optical machines offered by Satisloh for the eastern part of the United States. The affidavit indicates that 28 precision optical machines were sold during the years 2002 through 2005. Out of these 28 machines, 21 of them were sold to companies that used them to work on glass. With regard to the SPM line of machines, 9 machines were sold during this period. Companies that work solely with glass purchased 6 of these SPM machines. The affidavit further states that in excess of 70 percent of the precision optical machines were used to work on glass.

The protest record indicates that there are three entries of merchandise under protest. The machines at issue were liquidated in subheading 8465.93, HTSUS as machine tools for working hard plastics, on June 11, 2004. A protest was timely filed against the liquidation of the entries in subheading 8465.93, HTSUS on September 9, 2004.

ISSUE:

Whether the three machines are at issue, Loh Processing Center Model Gll-3A, Spheromatic 120-2SL and the Asphere Robotic Polisher All, are classified as machine tools for working glass in heading 8464, HTSUS, or as machine tools for working plastic under heading 8465, HTSUS.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI’s). 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:

8464 Machine tools for working stone, ceramics, concrete, asbestos-cement or like mineral materials or for cold working glass:

8464.20 Grinding or polishing machines:

8464.20.50 Other

8465 Machines tools (including machines or nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone hard rubber, hard plastics or similar hard materials:

Other:

8465.93.00 Grinding, sanding or polishing machines.

In understanding the language of the HTSUS, the Harmonized Commodity Description And Coding System Explanatory Notes (ENs) may be utilized. The ENs constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system. Customs & Border Protection (CBP) believes the EN’s should always be consulted. See T.D. 8980, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

Section XVI, Note 3, provides:

Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.

Section XVI, Note 5, HTSUS, provides that, for the purposes of the section notes, the term machine means any machine, machinery, apparatus and the like cited in Chapters 84 and 85, HTSUS. Therefore, we may substitute the term machine tool for machine for the purposes of Note 3. The General EN (VI) to Section XVI, HTSUS, which explains the scope of Note 3, provides, in pertinent part, as follows:

Multi-function machines are, for example, machine-tools for working metal using interchangeable tools, which enable them to carry out different machining operations (e.g., milling, boring, lapping).

It should be noted that multi-purpose machines (e.g., machine tools capable of working metals and other materials) are to be classified according to the provisions of Note 7 to Chapter 84.

Note 7 to Chapter 84, HTSUS, provides, in part, that “[a] machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose.” Regarding machines governed by Note 7, General EN (D) to Chapter 84 states, in relevant part, that “[m]achines which fall in two or more headings, none of which is within headings 84.01 to 84.24, are classified in that heading which provides the most specific description of the goods, or according to the principal use of the machine.”

Heading 8464, HTSUS, provides, in part, for machine tools for cold working glass. EN 84.64 (II) states, in part, that these machine tools may be for specialized work, such as optical or watch-making. They include glass-cutting machines of the wheel or diamond type, among others. This heading also provides for optical finishing and polishing machine tools.

EN 84.64 in describing machine-tools for cold working glass, states:

This category covers machines-tools used for cold-working glass, but it excludes machines used for hot-working glass (i.e., glass heated until it becomes fluid or plastic (heading 84.75).

Many of these machines carry out operations similar to those mentioned in paragraph (I) above in connection with stone or the like.

Others, on the other hand, are employed for more specific work, e.g., decorative finishing, or for certain specialised uses (e.g., optical or watch-making) The following, in particular, fall in this latter category:

(1) Glass cutting machines,
(2) Glass cutting (shaping) machines,
(3) Trueing, grinding, etc., machines,
(4) Polishing machines
(5) Engraving machines of the grinding wheel or diamond type; (6) Machine-tools used for finishing or polishing optical, spectacle or clock or watch glass.

Heading 8465, HTSUS, provides, in relevant part, for machine tools for working hard plastics and similar hard materials. EN 84.65 states that the heading includes machine tools for shaping or surface working hard materials. EN 84.65 (A) describes a variety of tools not normally specialised for a particular industry. Included in the list are:

(4) Grinding, sanding and polishing machines. Grinding machines which use grindstones are principally used for hard products such as corozo, hard rubber, horn and ivory. EN 84.65 further indicates that “[t]his heading covers machine-tools for the shaping or surface-working (including cutting, forming and assembling) of wood (and materials derived from wood), cork, bone, hardened rubber, hard plastics and similar hard materials (horn, corozo, mother of pearl, ivory, etc.).”

Neither of the two headings at issue, heading 8464, HTSUS, or heading 8465, HTSUS, provides a more specific description of the machine tools under consideration. Therefore, we must determine the machine’s principal use. Under the GRIs, it is the principal use of the class or kind of goods to which the imports belong at or immediately prior to the time of importation and not the principal use of the specific import that is controlling. See Group Italglass U.S.A., Inc. v. United States, 17 C.I.T. 1177, 1177, 839 F. Supp. 866, 867 (1993); see also Additional U.S. Rule of Interpretation 1(a), HTSUS ("ARI 1(a)").

Principal use in each case depends on the evidence presented, with the burden of proof falling on the one seeking to establish such use. See HQ 952878, dated February 11, 1993. Factors tending to support a principal use are well established and include channels of trade, environment of sale such as advertisements, and recognition of use in the trade. See, HQ 962677, dated September 23, 1999. In other words, the article's principal use in the United States at the time of importation determines whether it is classifiable within a particular class or kind (principal use) is distinguished from actual use; a tariff classification controlled by the latter is satisfied only if such use is intended at the time of importation, the goods are so used and proof thereof is furnished within 3 years after the date the goods are entered (U.S. Additional Note 1(b); 19 CFR 10.131 - 10.139)).

The courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See Lenox Collections v. United States, 19 CIT 345, 347 (1995); G Heileman Brewing Co. v. United States, 14 CIT 614 (1990); and United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (1976).

Whenever possible, CBP will view available evidence in the light most favorable to the importer. The technical data sheets for machines that were submitted with the protest indicate that the SPM, 120-2 SL, and the Gll-3A can work on the “producible materials” such as mineral glass, quartz, ceramics, crystals, suitable metals, semiconductor materials, composites and materials with similar characteristics. We note that these technical data sheets do not indicate that machines can be used for cutting and working on plastics. Protestant submitted an affidavit from one of its sales representative. CBP normally accords affidavits little probative value unless the information they contain corroborates evidence already in the file or their contents are independently verifiable. See HQ 958315, December 1, 1995. However, in HQ 961408 dated November 24, 1998, we stated in administrative proceedings, particularly where there is no other evidence available and there is no reason to believe that the information in the study is flawed, incomplete or is otherwise unreliable, CBP has considerable latitude in evaluating that information. In this instance, we have no reason to believe that information contained in the affidavit is not accurate.

The affidavit indicates that the machines were used for working optical glass. In the affidavit, a list of all the companies that purchased the machines between 2002 and 2004 is included. According to counsel, all the purchasers of the machines from Loh from 2002 through 2004 are companies that make precision optical products. In addition to listing the buyers of the machines, the affidavit identifies that each company purchased the machines to work on a specific material. All the companies that purchased machines employed them to work on glass, zinc sulfide, or silicon. Zinc sulfide and silicon are ceramic and mineral like materials. We note that machines that principally work on any of these three materials are classified in heading 8464.

The technical data sheets that were submitted indicate that the machines were intended to work on glass, minerals, ceramics or composite type materials. There is no indication that the machines can work on plastics. We also note that the machines under consideration would not be used for working plastic materials because items being worked upon are not in continual rotation. Moreover, there is information in the protest file that the diamond-sintered tools on the machines could not function if they were used to work on plastic materials because they would become “gummed up”. Protestant’s contention that the machines are used for high-end glass optics rather than for working eyeglass lenses is supported by the fact that the machines are listed under the precision optics section of its web site.

Although the technical data sheets indicate that the machines could be used for working suitable metals, the information that is available indicates that all the companies that bought the machines from Loh were optical companies that used them to work on glass, silicon or a ceramic material like zinc sulfide. We have no contrary information that indicates that anyone used the machines for working metal materials. Consequently, because all the machines that Loh sold were purchased by established optical companies that used them to perform work on glass, mineral or ceramic materials in order to produce precision optical products, we believe that the physical characteristics, the expectation of the ultimate purchaser, the channels of trade, the environment of sale demonstrates that the principal the use of these machines that are the subject of this protest were for working glass and similar type materials.

Based on the evidence presented, we conclude that the protestant has met its burden in establishing that the three machines in this case are used principally to work on optical glass or similar type mineral or ceramic materials. Since the three machines under consideration are only used to work precision optical glass, or similar type materials, we find that they are classified in heading 8464, HTSUS, as machine tools for working glass.

HOLDING:

The evidence establishes that the principal use of the three machines in question the Center Model Gll-3A, Spheromatic 120-2SL and the Asphere Robotic Polisher is for working glass or similar mineral or ceramic materials. In accordance with GRI 1, all three machines are classified in heading 8464, HTSUS as machine tools for working glass. They are specifically provided for in subheading 8464.20.50 as: “Machine tools for working stone, ceramics, concrete, asbestos-cement or like mineral materials or for cold working glass: grinding or polishing machines: Other” at a general column one rate of duty of 2 percent ad valorem. Duty rates are provided for the protestant’s convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

You are instructed to GRANT the protest, in full. In accordance with the Protest/Petition Processing Handbook (CIS HB, June 2002, pp. 18 and 21), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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