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HQ W968417




March 5, 2007

CLA-2: RR:CTF:TCM W968417 KSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 8103.30.0000

Area Director
U.S. Customs and Border Protection
JFK International Airport Area
Chief Liquidation and Protest Branch
Building 77
JFK International Airport
Jamaica, New York 11430

RE: Application for Further Review of Protest 1001-01-101196

Dear Port Director:

This is in reply to your correspondence dated September 19, 2006, forwarding Application for Further Review of Protest (AFR) 1001-01-101196, filed by Kittredge, Donley, Elson, Fullem & Embick, LLP, on behalf of its client Hi-Temp Specialty Metals, Inc.

The protest is against Customs and Border Protection’s (CBP) classification and liquidation of one entry of scrap tantalum anodes under subheading 8103.90.0000 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

On November 23, 1999, protestant entered the merchandise subject to this protest in subheading 8103.30.0000, HTSUSA, which provides for “Tantalum and articles thereof, including waste and scrap: Waste and scrap.” On March 26, 2000, CBP issued a Request for Information seeking a description of the anodes and capacitors being imported and proof of payment. In May 2000, a Notice of Rate Advance of was issued to protestant advising that the merchandise would be liquidated in subheading 8103.90.0000, HTSUSA. The merchandise was liquidated on December 22, 2000 in subheading 8103.90.0000, HTSUSA, which provides for “Tantalum and articles thereof, including waste and scrap: Other.”

On March 20, 2001, protestant filed a protest and application for further review against the classification and liquidation of the merchandise in subheading 8103.90.0000 HTSUSA. Protestant’s AFR request was approved on September 8, 2006. The protest was timely filed pursuant to 19 U.S.C. 1514 (c)(3) and 19 C.F.R. 174.12 (e)(1).

In support of protestant’s application for further review, protestant alleges that the protest involves is inconsistent with court decisions and Headquarters Ruling Letters (HQ) 955769, dated May 27, 1994; HQ 053142, dated 1978 and; HQ 045659, dated June 5, 1977. See 19 C.F.R. 174.24(a). Further review is warranted pursuant to 19 CFR §§174.24(a) and 174.25.

FACTS:

The merchandise at issue consists of spent tantalum anodes. The scrap anodes are obtained from rejected anodes intended for use in the manufacture of chip capacitors, previously used or spent anodes no longer usable as anodes and anodes scrapped from capacitors which failed to meet specifications. After importation the anodes are placed in an acid bath where the impurities are stripped from the tantalum. The anodes are then sold to metal refiners who further refine the product. In an alternate processing, the scrap is burned in a high melt furnace that results in the production of tantalum oxide in powder form.

ISSUE:

Whether the scrap anodes are classified in subheading 8103.90.0000, HTSUSA, as other tantalum and articles thereof or in subheading 8103.30.0000, HTSUSA, as waste and scrap of tantalum.

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. It is Customs and Border Protections’ (CBP) practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUSA. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

In support of the application for further review, protestant argues that the spent anodes are imported in anode form but are not usable as an anode because they are worn. Accordingly, protestant argues the merchandise meets the terms of scrap and waste as set forth in Note 8(a) to Section XV, HTSUSA.

Note 8(a) to Section XV, HTSUSA, provides:

8. In this section, the following expressions have the meanings hereby assigned to them:

(a) Waste and scrap

Metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons.

In HQ 955769, dated May 27, 1994, spent copper anodes were imported into Canada from a country other than the U.S where the spent anodes were remelted and cast into anode molds in a casting furnace, thereby creating new anodes. Those anodes were then suspended by their lugs in a chemical acid bath that also contains thin "starting sheets" of refined copper. An electric current is sent from the anode to the starting sheet through the chemical bath to begin the electrolytic refining process. During this process, copper ions are stripped from the anode and plated onto the starting sheet to form a pure refined copper cathode. After enough pure copper has plated onto the cathode so that it has reached the desired thickness and weight, the cathode is removed and replaced with another starting sheet. Once this second cathode reaches the desired weight, both it and the anode are replaced and a new cycle begun. The finished copper cathodes are then imported into the U.S. The anodes were classified as copper waste and scrap because the copper anodes were no longer effectively and commercially usable as anodes because of wear and were required to be remelted for the recovery of metal and recast before they can be reused as new anodes. In so classifying the copper anodes we noted the spent copper anodes met the provisions of section XV, note 8(a), HTSUSA.

Similarly, the instant merchandise meets the terms of Note 8(a) to Section XV, HTSUSA. In their imported condition, the tantalum anodes cannot be used as anodes. They must first be subjected to a process that will remove the impurities and effect recovery of the metal. As such, the tantalum anodes are classified in subheading 8103.30.0000, HTSUSA.

HOLDING:

Protest number 1001-01-101916 is granted in full. The tantalum anodes are classified in heading 8103, HTSUSA. They are specifically provided for in subheading 8103.30.0000 HTSUSA, which provides for “Tantalum and articles thereof, including waste and scrap: Waste and scrap.” The rate of duty is free.

In accordance with the Protest/Petition Processing Handbook, (CIS HB, January 2002, pp 18 and 21), you are to mail this decision, together with the Customs 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 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
Commercial and Trade Facilitation Division

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