H293671

HQ H293671 January 6, 2023 CLA-2 OT:RR:CTF:EMAIN H293671 ALS CATEGORY: Classification TARIFF NO.: 7326.90.86 Mr. Raymond S. Polley Port Director 2350 North Sam Houston Parkway E, Suite 1000 Houston, Texas 77032 RE: Application for Further Review Protest No. 5501-17-100504; Tariff classification of Certain Steel Parts Dear Mr. Polley: This letter is in reply to an Application for Further Review (“AFR”) of Protest number 5501-17-100504, filed on behalf of GE Oil and Gas Pressure Control Group (also referred to herein as “Protestant”) on July 20, 2017. The Protest is against U.S. Customs and Border Protection’s (“CBP’s”) tariff classification of the above-referenced certain steel parts under subheading 7326.90.85 of the Harmonized Tariff Schedule of the United States (“HTSUS”). FACTS: The steel parts at issue are distinct parts of Wellhead and “Christmas Tree” assemblies for an oil rig. They consist of a tubing head adapter body, tee body and cross body, a casing head/casing spool, a housing and a packoff body. The casing head/casing spool holds pressure in the Wellhead. The tubing head adapter body is an attachment between the Wellhead and the Christmas Tree that serves as a fluid conduit. The housing is an attachment between the Wellhead and Christmas Tree. The packoff body is used between the Wellhead and a string of tubing. The packoff body is started by the protestant to be necessary to contain high and potentially dangerous gas pressure that may be present in the Wellhead or Christmas Tree, but it is not part of the Christmas Tree. The Wellhead is installed on the oil well “during the initial drilling process” and is a suspension point and pressure seal at the top of the well. The Christmas Tree is installed on top of the Wellhead. It consists of valves, spools, and fittings. The Christmas Tree controls the flow of oil or natural gas out of the well and serves as a valve when the well is closed. A diagram of the Wellhead/Christmas Tree is directly below: 
 A diagram of a Christmas Tree and its specific components and parts is directly below: 
 The Protestant entered the subject merchandise under headings 7307, 7326, 8479, and 8481, HTSUS. The Protestant now contends that the subject parts are properly classified under heading 8481, or alternatively heading 8431, HTSUS. ISSUE: Are the tubing head adapter body, tee body and cross body, casing head/casing spool, housing, and packoff body, as described above, properly classified under heading 7326, HTSUS, which provides for “Other articles of iron or steel”, or under heading 8481, HTSUS, as parts of valves, or, alternatively, heading 8431, HTSUS, as parts of boring machinery? LAW AND ANALYSIS: Initially, we note that the Protest was timely filed on June 20, 2017, which is within 180 days of the earliest date of the liquidation of the subject entries, January 6, 2017. See 19 U.S.C. §1514(c)(3)(B). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. §1514(a)(2). Further Review of Protest No. 5501-17-100504 is properly accorded to the Protestant pursuant to 19 CFR 174.24(b). Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order. The following headings and subheadings of the HTSUS are under consideration in this case: 7326 Other articles of iron or steel: 7326.90 Other: 7326.90.86 Other... * * * 8431 Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: 8431.43 Parts for boring or sinking machinery of subheading 8430.41 or 8430.49: 8431.43.40 Of offshore oil and natural gas drilling and production platforms... * * * 8481 Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: 8481.90 Parts: 8481.90.90 Other… Note 1(f) to Section XV, under which heading 7326 is covered, provides the following: This section does not cover: (f) Articles of section XVI (machinery, mechanical appliances and electrical goods)…. Note 2 to Section XVI, HTSUS, provides, in pertinent part, the following: 2. Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; Thus, parts of valves of heading 8481 or parts of boring machinery classified under heading 8431 would be excluded from classification under heading 7326. 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. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The Protestant contends that the subject articles are classifiable under heading 8481, HTSUS, as parts of valves because they are suitable for use principally with Wellheads and Christmas Trees in accordance with Note 2(b) to Section XVI. The Protestant alternatively contends that the subject articles are classifiable under heading 8431, HTSUS, as parts of boring or sinking machinery. Boring or sinking machinery is generally classifiable under heading 8430, HTSUS. It is well-settled that goods must be classified in their condition as imported. See Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994); see also CBP Ruling HQ H292799 (September 16, 2019). In its condition as imported, the tubing head adapter body is a steel article that is to be used as an attachment between the Wellhead and the Christmas Tree and is a fluid conduit between them. However, both the Wellhead and the Christmas Tree are complete apparatus before the tubing head adapter body is used to attach them together. Thus, the tubing head adapter body is not a part of either the Wellhead or the Christmas Tree. In their condition as imported, the tee body and cross body are steel articles that are to be used as a transition conduit for the flow of production fluid from the “main run” or vertical main body of the Christmas Tree to the horizontal valves of the Christmas Tree. The ENs to heading 8481 state the following: This heading covers taps, cocks, valves and similar appliances, used on or in pipes, tanks, vats or the like to regulate the flow (for supply, discharge, etc.), of fluids (liquid, viscous or gaseous), or, in certain cases, of solids (e.g., sand). The heading includes such devices designed to regulate the pressure or the flow velocity of a liquid or a gas. The appliances regulate the flow by opening or closing an aperture (e.g., gate, disc, ball, plug, needle or diaphragm). They may be operated by hand (by means of a key, wheel, press button, etc.), or by a motor, solenoid, clock movement, etc., or by an automatic device such as a spring, counterweight, f

Initially, we note that the Protest was timely filed on June 20, 2017, which is within 180 days of the earliest date of the liquidation of the subject entries, January 6, 2017. See 19 U.S.C. §1514(c)(3)(B). Additionally, CBP’s classification of the merchandise is a protestable matter under 19 U.S.C. §1514(a)(2). Further Review of Protest No. 5501-17-100504 is properly accorded to the Protestant pursuant to 19 CFR 174.24(b).Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order.The following headings and subheadings of the HTSUS are under consideration in this case:7326 Other articles of iron or steel:7326.90 Other:7326.90.86 Other...* * *8431 Parts suitable for use solely or principally with the machinery of headings 8425 to 8430:8431.43 Parts for boring or sinking machinery of subheading 8430.41 or 8430.49:8431.43.40 Of offshore oil and natural gas drilling and production platforms...* * *8481 Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof:8481.90 Parts:8481.90.90 Other… Note 1(f) to Section XV, under which heading 7326 is covered, provides the following:This section does not cover:(f) Articles of section XVI (machinery, mechanical appliances and electrical goods)….Note 2 to Section XVI, HTSUS, provides, in pertinent part, the following:2. Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 8