HQ 951644

April 23, 1993

CLA-2 CO:R:C:M 951644 LTO

CATEGORY: Classification

TARIFF NO.: 8523.20.00

District Director

U.S. Customs Service

Thomas P. O\'Neill, Jr. Federal Building

10 Causeway Street, Room 603

Boston, Massachusetts 02222-1052

RE: Protest No. 0401-91-100191; Unburnished Cookies (Media); 19

CFR 177.9(d)(1); HQ 085845; NY 837610; NY 837610 Amendment

revoked; 53 Fed. Reg. 38045; 54 Fed. Reg. 6433; 54 Fed. Reg.

13406; 56 Fed. Reg. 36775; Royal Business Machines, Inc., et

al v. U.S.

Dear Sir:

This is our decision on Protest No. 0401-91-100191, dated

April 3, 1991, which concerns the classification of unburnished

media or \"cookies\" under the Harmonized Tariff Schedule of the

United States (HTSUS). The protestant, Kao Infosystems Company

(KIC), also seeks the reliquidation of entries subject to this

protest without the assessment of antidumping duties.

FACTS:

The articles in question are mylar polyethylene disks known

as \"cookies\" from Japan. Before importation, the cookies are

coated with a thin film of magnetic particles. After

importation, the subject merchandise will be magnetized, mounted

on an aluminum center hub, and enclosed within a plastic casing.

The disks will then be ready for formatting.

On September 29, 1988, the U.S. Department of Commerce

issued an affirmative preliminary antidumping determination for

3.5\" microdisks and media from Japan, and instructed the Customs

Service to assess antidumping deposits on items covered by the

determination \[Case A-588-802\]. 53 Fed. Reg. 38045 (September

29, 1988). Because KIC imported unburnished cookies that were - 2 -

found to be classifiable under subheading 8523.20.00, HTSUS

(prepared unrecorded magnetic disks), the tariff number specified

in the preliminary determination, Customs began assessing

antidumping duties on KIC entries. Commerce subsequently issued

an affirmative final antidumping determination and order. 54

Fed. Reg. 6433 (February 10, 1989); 54 Fed. Reg. 13406 (April 3,

1989).

Counsel for the protestant contends that in February 1989,

Customs officials suggested to KIC that the cookies they were

importing were not covered by Commerce\'s antidumping

determination and advised KIC to obtain a classification ruling

to that effect. In a letter dated February 29, 1989, to Customs

in New York, the protestant requested a binding classification

ruling concerning the cookies.

In NY 837610, dated March 13, 1989, it was determined that

the cookies were not \"magnetic,\" and they were held to be

classifiable under subheading 8523.90.00, HTSUS (\"other prepared

unrecorded media\"). At this time, the protestant states that

Customs stopped collecting antidumping duties on KIC entries.

KIC continued to import the cookies free of antidumping

duties until April 1990. At this time, Customs rejected a KIC

entry on the grounds that the cookies were in fact covered by

Commerce\'s scope determination (based on a Customs laboratory

report that indicated that the disks were \"magnetized\"). Customs

began assessing antidumping duties on KIC entries, including

those entries made by KIC following the March 13, 1989, ruling

that had not yet been liquidated.

On June 8, 1990, New York issued another ruling (NY 837610

Amendment) which purportedly modified the ruling of March 13,

1989\. This amended response to the protestant\'s February 29,

1989, request for a classification ruling, stated that the

subject merchandise was classifiable under subheading 8523.20.00,

HTSUS.

On June 26, 1991, Commerce issued a scope ruling to the

protestant concerning KIC\'s unburnished cookies. 56 Fed. Reg.

36775 (August 1, 1991). This ruling stated that the cookies were

within the scope of their earlier, affirmative final antidumping

determination.

The protestant states that, in reliance on NY 837610, they

imported a large number of cookies between March 1989 and April

1990\. They claim that because of their reliance on this ruling,

and because of subsequent actions taken by Customs officials

(specifically, the issuance of NY 837610 Amendment and the

retroactive assessment of antidumping duties on KIC entries made

\- 3 -

after March 1989 until April 1990 that had not yet been

liquidated), they have suffered severe business hardship.

ISSUES:

1\. Whether the unburnished cookies are classifiable under

subheading 8523.20.00, HTSUS, which describes prepared unrecorded

magnetic disks for the recording of other phenomena.

2\. Whether the entry can be reliquidated without antidumping

duties regardless of the scope determination made by the U.S.

Commerce Department concerning the application of these duties to

3.5\" microdisks and coated media thereof from Japan.

LAW AND ANALYSIS:

1\. Classification

The General Rules of Interpretation (GRI\'s) to the HTSUS

govern the classification of goods in the tariff schedule. GRI 1

states in pertinent part that \"for legal purposes, classification

shall be determined according to the terms of the headings and

any relative section or chapter notes . . . .\"

The articles in question are covered by heading 8523, HTSUS,

which provides for \"\[p\]repared unrecorded media for sound

recording or similar recording of other phenomena.\" The

subheadings at issue are as follows:

8523.20.00 Magnetic discs

8523.90.00 Other

In NY 837610, dated March 13, 1989, the unburnished cookies

were held to be classifiable under subheading 8523.90.00, HTSUS.

In NY 837610 Amendment, dated June 8, 1990, this ruling was

purportedly modified and the cookies were held to be classifiable

under subheading 8523.20.00, HTSUS. However, according to

section 177.9(d)(1) of the Customs Regulations \[19 CFR

177.9(d)(1)\], \"\[m\]odification or revocation of a ruling letter

shall be effected by Customs Headquarters . . . .\" This office

has recognized that \"under current instructions the New York

office cannot modify or revoke its rulings.\" See HQ 085845,

dated June 27, 1990. Thus, the June 8, 1990 ruling was without

effect and is hereby revoked. We must now consider whether the

articles in question are classifiable under subheading

8523.20.00, HTSUS, or subheading 8523.90.00, HTSUS.

Counsel for the protestant contends that the cookies are not

\"magnetized\" or \"magnetically charged,\" but merely \"magnetic,\" - 4
-

and argues, therefore, that the cookies cannot be classified as

magnetic disks. We disagree.

The Harmonized Commodity Description and Coding System

Explanatory Note (EN) to heading 8523, HTSUS, pg. 1372, states

that the heading includes \"media for magnetic recording, e.g.,

discs or cards (of plastics or paper) . . . either capable of

being magnetised or so rendered by coating with a lacquer

containing dispersions of magnetic powder or by electrolytic

deposit of a ferromagnetic coating (e.g., for magnetic wire)

\[emphasis added\].\" The articles in question are coated with a

thin film of magnetic particles prior to the time of importation.

Thus, while the cookies are not \"magnetised,\" they are \"capable

of being magnetised\" and are therefore, classifiable as magnetic

disks under subheading 8523.20.00, HTSUS.

2\. Anti-dumping duties

Counsel for the protestant requests that the entries of

unburnished cookies be reliquidated without antidumping duties.

Because antidumping scope and tariff classification have

fundamental differences, the tariff classification of the

unburnished cookies by Customs does not affect the Commerce

Department\'s antidumping scope determination. The Court of

International Trade has stated:

The Court distinguishes between the authority of

the Customs Service to classify according to tariff

classifications \[19 U.S.C. 1500\] and the power of

the agencies administering the antidumping law to

determine a class or kind of merchandise. The

determinations under the antidumping law may

properly result in the creation of classes which do

not correspond to classifications found in the

tariff schedules or may define or modify a known

classification in a manner not contemplated or

desired by the Customs Service.

Royal Business Machines, Inc., et al v. U.S., 1 CIT 80, 87 (CIT

1980), 507 F.Supp. 1007, aff\'d 669 F. 2d 692 (1982).

Thus, the Commerce Department\'s antidumping scope

determination applies to the merchandise named in that

determination regardless of where Customs classifies that

merchandise, and Customs is not empowered to grant the relief now

sought by the protestant.

HOLDING:

The unburnished cookies are properly classifiable under - 5 -

subheading 8523.20.00, HTSUS, which provides for \"\[p\]repared

unrecorded media for sound recording or similar recording of

other phenomena . . . \[m\]agnetic discs.\" The corresponding rate

of duty for articles of this subheading is 4.2% ad valorem.

Commerce\'s final antidumping scope determination of June 26,

1991 \[56 Fed. Reg. 36775\] is unaffected by this ruling. Thus,

the protestant\'s request for reliquidation of the entries subject

to this protest without the assessment of antidumping duties must

be denied.

Accordingly, the protest should be denied in full. 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.

Sincerely,

John Durant, Director