H305268

 HQ H305268 September 28, 2020 OT:RR:CTF:CPMM H305268 RRB CATEGORY: Classification TARIFF NO: 3206.49.6050 Port Director U.S. Customs and Border Protection Port of Cleveland 6747 Engle Road Middleburg Heights, OH 44130 Re: Application for Further Review of Protest No. 4101-18-100059; tariff classification of pearlescent pigments Dear Port Director, The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 4101-18-100059, timely filed on September 14, 2018, on behalf of Kuncai Americas LLC (“Protestant”). This AFR concerns U.S. Customs and Border Protection’s (“CBP”) classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of pearlescent pigments. FACTS: The protested merchandise consists of various pearlescent pigments made up of platelets having a synthetic mica substrate coated with a thin film or layer of either titanium oxide, iron oxide, or a mixture of the two. Pearlescent pigments deliver superior brilliance, luster, and unique optical effects ranging from a fine-grained luster to bold silver white sparkles. Pearlescent pigments are used in a variety of products including cosmetics, plastics and coatings, precisely because of these extraordinary optical effects. The pearlescent pigments at issue in the Protest consist of the following: 1) mica substrate coated with titanium oxide; 2) mica substrate coated with iron oxide; and 3) mica substrate coated with a mixture of titanium oxide and iron oxide. Pearlescent pigments consisting of a mica substrate coated with titanium oxide produce colors ranging from various silvery white effects while pearlescent pigments coated with iron oxide produce colors ranging from brown to different shades of red. Included with the protest documentation are various Material Safety Data Sheets (MSDS) consisting of specifications for each pearlescent pigment at issue in this protest. We sent these MSDS to CBP’s Laboratories and Scientific Services Division (“LSSD”) for analysis. In an email to our office, dated September 25, 2020, LSSD explained that “[t]he colors in pearlescent pigments are caused by interference in thin layers of one material on another.” They also confirmed that each of the pearlescent pigments are mica-based pigments coated with titanium or iron oxide. The protested merchandise consists of one (1) entry that was entered under subheading 3206.40.60, HTSUS, at the Port of Cleveland (“Port”) on August 9, 2017. On June 28, 2018, CBP issued a Notice of Action (“CBP Form 29”), stating that “[p]igments based on titanium oxide should be classified as HTS 3206.19.0000/6% and pigments based on iron oxide should be classified as HTS 3206.49.2000/6.5%. Pigments in which mixtures of oxides are used in similar quantities should be classified as HTS 3206.40.6050/3.1%.” The protested merchandise was liquidated on July 6, 2018. The pearlescent pigments consisting of a mica substrate coated with titanium oxide were liquidated under subheading 3206.19.0000, HTSUSA (“Annotated”) (2017), as “Other coloring matter; . . . : Pigments and preparations based on titanium oxide: Other,” at a duty rate of 6% ad valorem. The pearlescent pigments consisting of a mica substrate coated with iron oxide were liquidated under subheading 3206.49.2000, HTSUSA (2017), as “Other coloring matter; . . . : Other coloring matter and other preparations: Other: Preparations based on iron oxides,” at a duty rate of 6.5% ad valorem. The pearlescent pigments consisting of a mica substrate coated with a mixture of titanium oxide and iron oxide were liquidated under subheading 3206.49.6050, HTSUSA (2017), as “Other coloring matter; . . . : Other coloring matter and other preparations: Other: Other: Other,” at a duty rate of 3.1% ad valorem. The Protestant filed this Protest and AFR on September 14, 2018, asserting that all of the subject merchandise is properly classified under the residual tariff provision for other coloring matter and other preparations in subheading 3206.49.6050, HTSUSA (2017), as “Other coloring matter; . . . : Other coloring matter and other preparations: Other: Other: Other.” ISSUE: Whether various types of pearlescent pigments are classified under subheading 3206.19.00, HTSUS (2017), as “Other coloring matter; . . . : Pigments and preparations based on titanium oxide: Other;” under subheading 3206.49.20, HTSUS (2017), as “Other coloring matter; . . . : Other coloring matter and other preparations: Other: Preparations based on iron oxides;” or under subheading 3206.49.60, HTSUS (2017), as “Other coloring matter; . . . : Other coloring matter and other preparations: Other: Other: Other.” LAW AND ANALYSIS: The protest was properly filed as a decision on classification under 19 U.S.C. § 1514(a)(2). The protest was timely filed within 180 days of liquidation of the entries. See 19 U.S.C. § 1514(c)(3). Further Review of Protest Number 4101-18-100059 was properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to substantially similar merchandise. Specifically, the Protestant argues that CBP’s liquidation of the protested merchandise is inconsistent with EM Industries v. United States, 22 CIT 156 (1998) (hereinafter “EM Industries”), where the Court of International Trade (“CIT”) held that pearlescent pigments with a mica substrate coated with either titanium dioxide, iron oxide, or a mixture of the two were properly classified under the residual tariff provision for “other coloring matter and other preparations: other: other.” Protestant alleges that the subject pearlescent pigments, which are substantially similar to those in EM Industries, should be similarly classified in subheading 3206.49.60, HTSUS (2017). Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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 2 through 6 may then be applied in order. GRI 6 provides that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section and chapter notes also apply, unless the context otherwise requires. The 2017 provisions under consideration are as follows: 3206 Other coloring matter; preparations as specified in note 3 to this chapter, other than those of heading 3203, 3204 or 3205; inorganic products of a kind used as luminophores, whether or not chemically defined: Pigments and preparations based on titanium dioxide: 3206.19.0000 Other... Other coloring matter and other preparations: 3206.49 Other: 3206.49.2000 Preparations based on iron oxides... 3206.49.60 Other… 3206.49.6050 Other… * * * * The Explanatory Notes (“ENs”) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). The EN to 32.06 states, in pertinent part: The coloring matter of this heading includes: (1) Pigments based on titanium dioxide. These include titanium dioxide which is surface-treated or mixed with calcium o

The protest was properly filed as a decision on classification under 19 U.S.C. § 1514(a)(2). The protest was timely filed within 180 days of liquidation of the entries. See 19 U.S.C. § 1514(c)(3).Further Review of Protest Number 4101-18-100059 was properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to substantially similar merchandise. Specifically, the Protestant argues that CBP’s liquidation of the protested merchandise is inconsistent with EM Industries v. United States, 22 CIT 156 (1998) (hereinafter “EM Industries”), where the Court of International Trade (“CIT”) held that pearlescent pigments with a mica substrate coated with either titanium dioxide, iron oxide, or a mixture of the two were properly classified under the residual tariff provision for “other coloring matter and other preparations: other: other.” Protestant alleges that the subject pearlescent pigments, which are substantially similar to those in EM Industries, should be similarly classified in subheading 3206.49.60, HTSUS (2017). Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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 2 through 6 may then be applied in order. GRI 6 provides that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the