NY 891514 - The tariff classification of construction demolition materials from Canada. - United States International Trade Commision Rulings

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NY 891514

October 25, 1993

CLA-2-:S:N:N1:112 891514

CATEGORY: CLASSIFICATION

Mr. David Honing
Budget Steel Ltd.
2770 Pleasant Street
Victoria, B.C. Canada V8T 4V3

RE: The tariff classification of construction demolition materials from Canada.

Dear Mr. Honing:

This classification decision under the Harmonized Tariff Schedule of the United States (HTS) is being issued in accordance with the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

DATE OF INQUIRY : October 5, 1993

DESCRIPTION OF
MERCHANDISE : Construction demolition materials

Construction debris is to be imported into the United States from Canada over their inland border. The construction debris consists of materials including wood, metal, concrete, brick, glass and various other materials from the demolition of buildings. You advise us that it is impossible to segregate the construction debris into their component materials.

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes. Where goods cannot be classified on the basis of GRI 1, the remaining GRI will be applied in order.

The HTSUSA does not contain a general provision for demolition debris. However, there are 30 provisions for waste and scrap of various specific materials. In addition, the HTSUSA contains numerous basket provisions which would describe those materials which are not classifiable as waste and scrap. Accordingly, a separate tariff provision will provide for each component material of the debris.

GRI 2(b) states that:

Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. (Emphasis added).

Thus "goods", as well as "mixtures or combinations," of materials and substances are classifiable pursuant to the principles of GRI 3.

Goods are commodities or wares. They are generally useful objects capable of yielding commercial or other advantage. As construction debris are not commodities or objects, and have no commercial use or value, they are not goods.

Furthermore, the terms "mixtures" and "combinations" suggest that materials or substances must be united or blended in some fashion in order for GRI 3 to be applicable. Garbage and debris are not combined in any fashion. Rather, they are merely a collection of unrelated and miscellaneous objects that have been compacted together. Hence, they are not mixtures or combinations. It follows that the principles of GRI 3 are not applicable and that the materials making up the debris are separately classifiable.

We recognize that it is impractical to classify the materials comprising debris individually. In order to resolve this difficulty, we resort to General Note 5, HTSUSA.General Note 5 provides for commingled goods and states:

(a) Whenever goods subject to different rates of duty are so packed together or mingled that the quantity or value of each class of goods cannot be readily ascertained by customs officers (without physical segregation of the shipment or the contents of any entire package thereof), by one or more of the following means:

(i) sampling,

(ii) verification of packing lists or other documents filed at time of entry, or

(iii) evidence showing performance of commercial settlement tests generally accepted in the trade and filed in such time and manner as may be prescribed by regulations of the Secretary of the Treasury.
the commingled goods shall be subject to the highest rate of duty applicable to any part thereof unless the consignee or his agent segregates goods pursuant to subparagraph (b) hereof.

Hence, commingled goods which cannot be segregated are generally subject to the rate of duty applicable to the material or substance which carries the highest rate.

In addition, subparagraph (c) provides that:

The foregoing provisions of this note do not apply with respect to any part of a shipment if the consignee or his agent furnishes, in such time and manner as may be prescribed by regulations of the Secretary of the Treasury, satisfactory proof --

(i) that such part (A) is commercially negligible, (B) is not capable of segregation without excessive cost and (C) will not be segregated prior to its use in a manufacturing process or otherwise, and

(ii) that the commingling was not intended to avoid the payment of lawful duties.

Any goods with respect to which such proof is furnished shall be considered for all customs purposes as a part of the goods, subject to the next lower rate of duty, with which they are commingled.

If the requirements of subparagraph (c) are met, the commingled goods shall be assessed at the next lower rate of duty.

Finally, subparagraph (d) sets forth another option:

The foregoing provisions of this note do not apply with respect to any shipment if the consignee or his agent shall furnish, in such time and manner as may be prescribed by regulations of the Secretary of the Treasury, satisfactory proof --

(i) that the value of the commingled goods is less than the aggregated value would be if the shipment were segregated.

(ii) that the shipment is not capable of segregation without excessive cost and will not be segregated prior to its use in a manufacturing process or otherwise; and

(iii) that the commingling was not intended to avoid the payment of lawful duties.

Any goods with respect to which such proof is furnished shall be considered for all custons purposes to be dutiable at the rate applicable to the material present in greater quantity than any other material.

Thus, if the goods cannot practically be segregated, and the value of the commingled goods is less than the value for the component materials segregated, the importer may elect the rate of duty applicable for the material of greatest quantity.

Shipments of construction debris shall be classified pursuant to the terms of General Note 5, HTSUSA.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

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