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HQ 953754

June 27, 1984

CLA-2 CO:R:C:F 953754 ALS

TARIFF NO.: 3402.20.5000; 3402.90.5030

District Director of Customs
300 S. Ferry Street
Terminal Island, CA 90731

RE: Request for Further Review of Protest 2704-93-100591, Dated February 18, 1993, Concerning an Industrial Cleaning Fluid for Compressors of Gas Turbines

Dear Mr. Heinrich:

This ruling is on a protest that was filed against your decisions of December 18 and 28, 1992, in the liquidation of entries covering the referenced product.


The product under consideration is a gas turbine compressor cleaner known as ZOK 27 which is a mixture of ethylan HB-2, triethanolamine, organic solvent, water and a rust inhibitor. The article is imported in 20 liter cans and 200 liter drums and is sold by the importer to the user in those containers. The label identifies the product as ZOK 27 and indicates its purposes. The label further indicates that the product is non- hazardous, the ratio of dilution for proper use, etc.


Is the product classifiable as a preparation put up for retail sale?


Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by - 2 -
the General Rules of Interpretation (GRI's) taken in order. GRI 1 provides that the classification is determined first in accordance with the terms of the heading and any relative section and chapter notes. If GRI 1 fails to classify the goods and if the heading and legal notes do not otherwise require the remaining GRI's are applied, taken in order.

In considering this matter we noted that both Customs and the importer agreed as to the nature of the product. Both agreed that the product was classifiable under the provisions for surface active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of heading 3401, provided for in heading 3402. The importer states that it only sells the product, without repackaging, to end users, that these sales are retail sales and that the product should be classified in subheading 3402.50.5000, HTSUSA. The importer references the dictionary definition of the word retail and notes that it is only licensed to sell products at retail.

Customs noted that the product was imported in 20 liter (6.6 gallon) and 200 liter (52.8 gallon) containers and that the product was available in various price groupings depending on the quantity purchased. It was concluded that because of the size of the containers and the fact that they were sold in quantity discounts, the merchandise was not put up for retail sale and the product was, therefore, classifiable in subheading 3402.90.5030, HTSUSA.

In considering this matter we note that merchandise is classifiable in its condition as imported. The instant product is imported in both a 6.6 gallon (25 liter) high-density polythene cans and a 52.8 gallon (200 liter) high-density polythene containers. These containers are sold, without repackaging, to the end users. The end users do not sell or repackage the product.

Pictures of the containers provided by the importer reveal that the outside of the import containers lists the qualities of the product as well as the size of the containers. It is noted, for example, that the product is anti-corrosive, nonflammable, nonhazardous, and that it meets certain technical standards. Directions for dilution, that rinse and dryout are not essential, shelf life, the wearing of rubber gloves for prolonged contact with the product, etc. are also noted on the containers. The information on these containers would appear to be directed at the end user since the distributor would have technical - 3 -
information containing this information and need not rely on the information on the containers.

In considering whether these goods are put up for retail sale we note that the term "retail" is defined in the Second College Edition, The American Heritage Dictionary as "[T]he sale of goods or commodities in small quantities to the consumer." Although the import containers hold a sizeable quantity of the product, we do not believe, as noted in Headquarters Ruling Letter 088701 of July 31, 1992, the container size is conclusive as to the retail or wholesale disposition of the product. The product is sold in the import containers to consumers without repackaging. It, however, is necessary to determine when a commodity ceases to be in a small quantity and when it is in a large quantity. It is further necessary to determine this at the time of importation.

While the importer apparently sells the product only to end users, such is not controlling in the determination as to whether the packages are retail or wholesale. We do not believe that 200 liters is a small quantity or that a container of such size could be considered a retail package. While the importer sells such packages directly to end users we note that others sell products in packages of such size to parties who repackage them and sell them to consumers. While the products so sold may differ from that of the importer, we believe the fact that such packages contain a large quantity and that they may be sold to either end users or parties who will repackage and resell them indicates that such packages are not retail packages.

We believe the question as to whether the 6.6 gallon can containing the instant cleaning preparation which is sold directly to an end users is a small quantity sold to a consumer is a much closer issue. Since the product is the same regardless of the container, it is necessary to consider whether a 6.6 gallon (25 liter) can holds a small quantity and whether such size can is sold to parties who will repackage their contents. In examining this issue we note that a 6.6 gallon container is the approximate metric equivalent of a 5 gallon can. We further note that it is quite common for packages of such size to be sold in retail establishments for end users with small requirements such as home owners. Products so sold may include roofing tar, asphalt for resurfacing driveways, paint and birdseed. In light of the above we believe it is reasonable to conclude that packages of such size are retail packages in that they contain a small quantity of the product and they are usually sold to end users thereof, i.e., somebody who will use the product and not repackage and resell it.


ZOK 27, a gas turbine compressor cleaner, is considered a preparation put up for retail sale and is classifiable in subheading 3402.20.5000, HTSUSA, when imported in 6.6 gallon (25 liter) cans and is subject to a free general rate of duty. ZOK 27, is not considered a preparation put up for retail sale and is classifiable in subheading 3402.90.5030, HTSUSA, when imported in 52.8 gallon (200 liter) drums. Merchandise so classified is subject to a general rate of duty of 3.7 percent ad valorem.

You are instructed to deny the protest, except to the extent reclassification of the merchandise as indicated above results in a duty reduction and partial allowance. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be provided by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this 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 take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.


John Durant, Director
Commercial Rulings Division

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