1 The United States Customs Service since has been renamed as the U nited States Bureau of Customs and Border Protection. See Homeland Security Ac t of 2002, Pub. L. 107-296, § 1502, 116 Stat. 2135, 2308-09 (2002); Reorganization Plan Modification for the Department of Homeland Security, H.R. Doc . No. 108-32, at 4 (2003). RHODIA, INC. , Plaintiff,

v. UNITED STATE S , Defend ant. Slip Op. No. 06-118 UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Timothy C. Stanceu, Judge Court No. 00-00174

OPINION [Granting plaintiff’s motion for summary judgment on tariff classification of imported good consisting in part of various rare earth c arbonates and deny ing defendant’s cross-motion for summary judgmen t] Dated: July 28, 2006 Neville P eterson LLP

( John M. Peterson and Curtis W . Knauss ) for plaintiff. Peter D. Keisler , Assistant Attorney Gene ral, Barbara S. Williams , Attorney-in-Char ge, International Trade

Field Office, and Bruce N. S tratvert , Trial Attorney, Commerc ial Litigation Branch, Civil Divi sion, Unite d States De partmen t of Justice , for def

endant. Stanceu, Judge: Plaintiff Rhodia, Inc. (“Rhodia”) challenges the determination of tariff classification that the United States Customs Service (“Customs”) 1 applied in 1999 to two entries of an imported product identified by plaintiff as “rare earth car bonate mixture” and moves for summary judgmen t. Defen dant Unite d States cross-mov es for su mmary judgmen t. The co urt, exercising jurisdiction under 28 U.S.C. § 1581(a) (2000), grants summary judgment to plaintiffCourt No. 00-00174 Page 2

because there are no g enuine issues of fact material to the tariff classifica tion issue presented by this case and bec ause the

classifi cation c laimed by plaintiff before the cour t is corre ct. I. B ACKGROUND Customs, upon liquidating the two entries, classified the imported product as a cerium compound in subheading 2846.10.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”) (1999) (“Compounds, inorganic or organic, of rare-earth metals, of y ttrium or of scandium , or of mixtur

es of the se metals : Cerium c ompounds” ), subject to duty at 5.5 per

cent ad valorem . In a separate

protest filed on each of the two liquidations, plaintiff asserted that the imported good is not described by the term “cerium compounds” as used in subheading 2846.10.00 and claimed classification in a “basket” subheading of heading 2846, subheading 2846.90.80, HTSUS (1999). Although Customs denied the protests, defendant United States now claims in its cross-motion for summary judg ment that subheading 2846.90.80, HTSUS is the

correct classif

ication f or the g ood. At the

time of en

try in 1999, tha

t tariff provision

read in pertine nt part a s follows: 2846 Compounds, inorga nic or or ganic, of rare -earth

metals, of

yttr ium or of sc andium, or of mixtur

es of the se metals :

* * * 2846.90.80 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7%. Bef ore th e co urt , R hod ia c lai ms cla ss ifi cat io n i n su bhe adi ng 3 824 .90 .39 , HT SU S (1 999 ). In pertine nt part, that tarif

f provision, as of the date of entry , was as f

ollows: 3824 . . . chemical products and preparations of the che mical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included . . . 3824.90 Other:Court No. 00-00174 Page 3 * * * Mixtures of

two or mor

e inorg anic com

pounds: 3824.90.39 Other: . . . . . . . . . . . . . . . . . . . . . . Free. II. D ISCU SSI ON The cour t procee ds de novo in actions brought to contest the denial of a protest under section 515 of the Tariff Act of 1930. See 28 U.S.C. § 2 640(a)( 1) (2000) . Summary judgmen t is appropriate when the parties’ submissions “show that there is no g enuine issue as to any ma terial fact and that the moving party is entitled to a judgment as a matter of law.” USCI T R. 56(c). Where tariff classification is at issue, “summary judgment is appropriate when there is no genuine dispute as to the underly ing factual issue of exactly what the merchandise is.” Bausch & Lomb, Inc. v. United States , 148 F.3d 1363, 1365 (Fed. Cir. 1998). Plaintiff has the burden of establishing that the governme nt’s classification of the product was incorrect but does not bear the burden of e stablishing the correct tariff classifica tion; instead, the correct tariff classification is to be deter mined by the court. Jarvis Clark Co. v. United States , 733 F.2d 873, 878 (Fed. Cir. 1984). I n determining the correct tariff c lassification, the court first must “ascertain[] the proper meaning of specif ic terms in the tariff provision.” David W. Shenk &

Co. v. United States , 21 CIT 284, 286, 960 F. Supp. 363, 365 (1997). That meaning is a question of law. See Russell Stadelman & Co. v. United States , 23 CIT 1036, 10 37-38, 83 F. Supp. 2d 1356, 1358 (1999), aff’d , 242 F.3d 1044 (Fe d. Cir. 200 1). Second, the co urt is to determine the tariff provision under which the subject merc handise is properly c lassified. See Bausch &Lomb, 148 F.3d at 1365-66. This determination also is a question of law. Id . at 1366. The statu tory presumpt ion of cor rectne ss given

Customs cla ssificat

ion decis ions by

28 U.S.C.Court No. 00-00174 Page 4

§ 2639(a)(1) does not apply if the court is presented with a question of law by a proper motion for summary judg

ment. See Universal Elecs., Inc. v. United States , 112 F.3d 488, 492 (Fed. Cir. 1997). The General Rules of I nterpretation of the HTSUS govern the determination of tar iff classification. N. Am. Processing Co. v. United States , 236 F.3d 695, 698 (Fed. Cir. 2001). General Rule of Inte

rpretation (“GRI”)

1, HTSUS, initially requires that tariff c lassification “be determined according to the terms of the he adings and any relative section or chapter notes.” GRI 1 , HTSUS. GRIs 2 throug h 4 then ap

ply “provide d such he adings or notes do not other wise require.” Id

. For guidance as to the scope a nd meaning of tariff terms, the court may resort to the Explanatory Notes to the Harmonized Commodity Description and Coding Syste m (“Explanatory Notes”), which, although not part of U.S. law, are “indicative of proper interpretation” of the tariff schedule. Lynteq, Inc. v. United States , 976 F.2d 693, 699 (

Fed. Cir . 1992) (q

uoting H .R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988), reprinte d in 1988 U.S.C.C.A.N. 1547, 1582) (internal quotation marks omitted).

A. Absence of a Genuine I ssue of Material Fact The court finds that there is no genuine issue of fa ct material to the tariff classification of the imported merchandise. The good, a produc t of the People’s Republic of China, is a mixture that consists principally of various ra re earth carbonates, which collec tively comprise by

weight 62 percent of the product. Pl.’s R. 5 6 Stateme nt of Mater

ial Facts No t in Dispute

¶ 9. In addition to

the rar e earth carbona tes, the product c ontains r are ea rth ammoni

um double s

ulfates,Court No. 00-00174 Page 5

2 The various rare earth car bonates present are cerium car bonate (31 percent), lanthanum carbonate (18 percent), neody mium carbonate (9 percent), praseody mium carbonate (3 percent), and other rare earth car

bonates (1 percent). The remaining 38 percent of the product consists of rare earth ammonium double sulfates (4 perce nt), bound water (32 percent), and impurities (2 perc ent). De fendant

charac terizes th e impuriti es as inc luding the rare earth a mmonium dou

ble sulfates ( i.e. , defendant characterizes the product a s consisting of 6 percent total impurities). bound wat

er, and i mpurities

. 2 Id. According to plaintiff, the bound water assists in the transport of the product by a

llowing it to flow and thereby be pumped. Tr. of Aug. 10, 2005 Oral Argument at 11 (“ Tr. ”). The par ties ag ree tha t the impor

ted merc handise was produc ed by subjectin g bastna site ore to processing that includes crushing, g rinding, treatment with sulfuric acid, and crac king in a kiln, res ulting in a product that Rhodi a identif ied as “Ra

re Eart h crude” in a submiss ion to Customs during the protest proceeding. Def.’s R esp. to Pl. ’s Statem ent of Mate rial Facts Not in Issue ¶ 12 & Ex. A at 2. The Rare Earth crude is further processed into sulfate solution, precipi tated, a nd filter ed to y ield the im

ported g ood, to whi ch Rhodia ’s submissi on in the pr otest proceeding referr

ed as “mixed Rare Earth carbonate.” Id. ¶ 13 & Ex. A at 2. Following importati on, the pr

oduct is f urther processe d to extract rare e arth ca rbonate s. The parties also agree that the r are earth carbonates in the mixture have commer cial value. T he record made b efore t

he court , howeve

r, does not establish whethe r the ra re ear th ammonium double sulfates in the mixture have commercial value. Plaintiff concedes that the rare earth ammonium double sulfates “may have no separate commercial value.” Tr. at 18. Because the effect of the presence of the rare e arth ammonium double sulfates on the determination of tariff classification would be the same whethe r or not the rare earth ammonium double sulfates have commercial value, as discussed infra , the court concludes that the issue ofCourt No. 00-00174 Page 6

the commercial value of the rare e arth ammonium double sulfates is not a genuine issue of material fact for purposes of Rule 56. The cour t conclud es, simila rly , that the

issue of w

hether t he rare earth a mmonium dou

ble sulfates are “by

-products” or “impurities” is not an issue of material fact pre cluding summary judgment. Defendant submitted in support of its cross-motion for summary judgment an affidavit of Mr. Larr

y D. Fluty

, Director of Scientific Services, U.S. Customs and Border Protection, in which Mr. Fluty stated tha t “[t]he rare-earth ammonium double sulfates that make up 4 percent of the imported merchandise are by-products (impurities).” Decl. of L arry D. Fl uty ¶ 12 (“ Fluty Aff. ”). His affidavit further stated that the rare earth ammonium double sulfates “are the result of the processing of the rare -earth crude into sulfate solution and then precipitation as the mixed ra

re-ea rth car bonate. A s such, the

y a re allow ed impurit

ies pursu ant to Note

1(a) to Chapter 28.” Id. Defendant, based in part on Mr. Fluty ’s affidavit, maintained in its submissions in support of summary judg

ment that the rare earth ammonium double sulfates, which comprise 4 pe rcent of the goo d by

weight , should be

consider ed an impu

rity or by -product for pur

poses of N ote 1(a)

to Chapter 28, HTSUS, and, therefore, do not result in the exclusion of the product from Chapter 28. Def.’s Mem. in Supp. of its Mot. for Summ. J. and in Opp’n to Pl.’s Mot. for Summ. J. at 7. Plain

tiff does not conte st the poin

t made in Mr . Fluty ’s affid avit that t he rare earth ammonium do

uble sulf ates re sulted fr

om the pro cessing

of the ra re ear th crude into sulfa

te solution and subsequent precipitation. Mr. Fluty’ s further statement to the effect that the rare earth ammonium double sulfates “are allowed impurities pursuant to Note 1(a ) to Chapter 28,” however, is not an assertion of fact but a conclusion of law tha t is based on Mr. Fluty’s ownCourt No. 00-00174 Page 7

construction of that tariff provision. Fluty Aff. ¶ 12. The construction of Note 1(a) to Chapter 28 is an issue of law to be determined by the court. For reasons discussed infra , Mr. Fluty’s construction of Note 1(a) to Chapter 28, HTSUS, which defendant a dopts in its argument on cross-motion for summary judg ment, is an impermissible one. Finally, defe

ndant, at a late stage of the summary judgment proceedings, appea rs to have attempted to raise an issue of fact pertaining to the c omposition of the imported good and, specifically, to whe

ther the good actually

contains rare earth ammonium double sulfates. See Def.’s Br. Addressing the Court’s Questions of Sept. 7, 2005 at 1. Here also, the court finds no genuine issue of material fact for pur poses of USCIT R. 56. Defendant, having previously taken issue with

plaintiff ’s descr iption of the good a s a “rar e earth carbona te mixture, ” stated

in its submission in response to questions of the court following oral argument that def endant “is not certain whether the merchandise imported in the e ntries in issue is indeed a mixture of compounds because the merchandise is described on the commercial invoices as a ‘mixed rare earth carbonate’ . . . .” Id. Defend ant’s re sponse fu

rther sta ted that [t]his description appears to indicate that there is only one c arbonate compound consisting

of a var iety of rare earths. Without a la

borator y r eport on t he analy sis of the composition that make [ sic ] up the impor ted merc handise, defenda

nt is unable to ascertain whether the imported mercha ndise consists of a mixture of different rare earth ca

rbonates as well as, on an as-is basis, 4 percent by weight of various r are ea rth ammoni

um double s

ulfates. Id. Earlier, in its response to plaintiff’s statement of material facts not in dispute that it filed under USC IT R. 5 6(h), de fendant admitted t

hat the imp orted g ood conta ins vario us rare earth carbonate compounds and also contains rare e arth ammonium double sulfates, further admittingCourt No. 00-00174 Page 8

that the r are ea rth ammoni

um double s

ulfates c omprise 4

percen t of the pr oduct on a

n “as is” basis. See Def.’s Resp. to Pl.’s Statement of Material Facts Not in Issue¶ 9, 16 & Ex. A at 2. At oral ar gument, defenda

nt agai n conce ded that r

are ea rth ammoni

um double s

ulfates a re pres ent in the product and constitute 4 percent of the product. Tr. at 32. If defenda nt is raising, or attempting to raise, following that oral arg ument an issue of material fact as to whether the imported merchan

dise cont ains var ious rar e earth carbona tes and r are ea rth ammoni

um double sulfates, defendant is contradicting its own Rule 56(h) response to plaintiff’s statement of uncontested facts. It is not clear that defenda nt intended its response to the court’s questions as an opposition to summary judgment. But if so, def endant did not satisfy Rule 56(e) , under which a party opposing

summary judgme

nt “must set forth specific facts showing that there is a g enuine issue for trial.” USCIT R. 56(e). Plaintiff’s desc ription of the imported good on the invoices as “mixed rar

e earth carbona te,” alth ough ind icating a name un

der whic h the impor

ted merc handise was sold in

commerc e, does not establi sh as a fa ct that the imported good is a ca

rbonate compound

instead o f a mixture

containi ng var ious rar e earth carbona tes, nor d oes it esta blish as a fact that rare earth ammonium double sulfates ar e lacking in the imported product. Defendant’ s own admiss ions, made

in its state

ment unde

r Rule 56(

h), also d efeat it s subseque

nt attempt

to raise an issue of material fact. As require d by Rule 56(c), the c ourt will enter summary judg ment because the pleadings and admissions on file show that there is no genuine issue as to any material facts, including the facts to which def endant alluded in its written response to the court’s questions following

oral ar gument.Court No. 00-00174 Page 9

B. The Classification Determined by Customs upon Liquidation Was Incorre ct In deny ing the two protests, Customs affirmed the tariff classification deter mination that it had made in liquidating the two entries, i.e. , classif ication a s “ceri

um compoun

ds” in subheading 2846.10.00, HTSUS (1999) (“Cerium compounds”). This classifica tion determination, which defendant does not advocate bef ore the court, was plainly incorrect. The merchandise under consideration cannot be de scribed as a “cerium compound.” As discussed infra , the merchandise is not a single compound but instead is a mixture consisting principally of

severa l compound s of vari ous rare earth me tals. A ce rium compo

und, cer ium carb onate, is present only as a

component of the mixture, comprising 31 percent of the whole. Moreove r, as also discussed infra , the good is properly classified under another heading a nd not under heading 2846. C. By Application of Ge

neral Rule of Interpr

etation 1, Heading 2846 I s Precluded, and Heading 3824 Is the

Correct Heading for Classification of the Good The parties have identified two headings as r elevant to the classification issue presented by t his case . They

are hea ding 284 6, HTSUS (“ Compounds, inorga nic or or ganic, of rare -earth metals, of yttrium or of sca ndium, or of mixtures of these metals”) and heading 3824, HTSUS (“. . . chemical products and prepara tions of the chemical or allied industries . . . not elsewhere specified or included . . .”). The court’s examination of the var ious headings, section notes, and chapter notes causes it to conclude that no other heading s merit consideration.Court No. 00-00174 Page 10

3 The term “chemical compound” is gene rally used to ref

er to “a substance composed chemically of two or

more elements in definite proportions (as opposed to a mixture).” 3 The Oxford En

glish Dict ionary 629 (2d ed. 1989) (emphasis in original).

4 The term “mixture” is defined as “[a]n aggregate composed of two or more distinct chemical components which retain their identities rega rdless of the degree to which they have become mingled.” McGraw- Hill Ency clopedia of Chemistr

y607 (5th ed. 1983). The imported good does not conform to the usual definitions of the term “compound,” as that term is gene rally used in re ferring

to chemic al substa

nces. 3 According to the uncontested facts as established for purposes of summary judgment, the product is, instead, a “mixture” of various rare earth compounds, i.e. , rare e arth ca rbonate s and rar

e earth ammonium do

uble sulfates with addit

ional subs tances present. 4 Heading 2846, HTSU S, howeve

r, is not c onfined t

o separate chemically

defined compounds, and, because it contains the heading term “compounds . . . of mixtures of these metals,” heading 2846 includes within its scope certain substance s that can be described as “mixtures.” See USR Optonix, Inc. v. United States , 29 CIT ___, ___ , 362 F. Supp. 2d 136 5, 1374-7 5 (2005). The Explanatory Note to he ading 2 8.46 addr esses in the first paragraph the question of which mixtures of rare earth compounds fall within the heading and which do n

ot. The Expl anatory

Note pro vides as f

ollows: This headi ng [ i.e. , heading 28.46] cov ers the in

organ ic or org anic compounds of yttrium, of scandium or of the rare-earth metals of heading 28.05 (lantha num, cer ium, pras eody

mium, neod

ymiu m, samari um, europ ium, gadolin ium, terbi um, dy sprosium, holmium, er bium, thuliu

m, y tterbium, lutetium). The heading also covers compounds derived dire ctly by chemical treatme nt from mixtur

es of the elements . This mea

ns that the

heading will include m ixtures of o xides or hy

droxides of

these el ements or

mixtures of

salts having the same anion (e .g., ra

re-ea rth metal chloride s), but not

mixtures of

salts having differe nt anions, whether

or not the

cation is t

he same. The hea

ding will not therefore, for example, cover a mixture of europium and sama rium nitrates with the oxa

lates nor a mixture of

cerium c hloride a nd ceriu m sulphate

since the se examples are not compounds derived directly from mixtures of elements, but areCourt No. 00-00174 Page 11

5 A “cation” is “[a]n ion carry ing a positive charge which moves towa rd the cathode (negative electrode) dur

ing electroly sis.” 3 The Oxfor d English D ictionary

990 (2d ed. 1989). An “anion” carries “a neg ative charge which moves towards the anode (positive electrode) during electrolysis.” 1 The Oxfor d English D ictionary

478 (2d ed. 1989). mixtures of compounds which could be conceived as having been ma de intentionally for special pur poses and which, accordingly , fall in heading 38.24

. Explanatory Note 28.46 (emphasis in original). In the text bey ond the first sentence, the paragraph is directed, at lea st in part, to explaining the intended meaning of the heading te rm “compounds . . . of mixtures of these metals.” Id. The second sentence describes this heading term as including “compounds derived directly by chemica

l treatment from mixtures of the elements.” Id. The note as a whole clarifies that the term “c ompounds derived directly by chemical treatment from mixtures of the elements” includes certain mixtures as well as chemically de fined compounds. See id. Concern ing the p articula

r question of mixture s of salts of rare earth metals, the note draws a distinction between mixtures in which all the salts present contain the same anion (regardle ss of whether they have different rare ea

rth metal cations) and those mixtur

es in whic

h the salts contain d iffere nt anions. 5 Rare earth carbonates and ra re earth ammonium double sulfates conform to technical definitions of the term “salts.” A “salt” is defined as a “substanc e produced by the reaction of an acid with a base. A salt consists of the positive ion of a base and the neg ative ion of an acid.” 10 The N ew Enc yclop ædia Brit anni ca (Micr opæd ia) 363 (15th ed. 1986). A “carbonate” is “any member of two classes of chemical compounds derived f rom carbonic acid or carbon dioxide . . . . The inorganic carbonates a re salts of carbonic acid (H2 CO 3 ), containing the carbonate ion, CO 3 2- , and ions of metals such as sodium or calcium.” 2 The New Encyclopædia Britannica (Micro pædi a) 851 (15th ed. 1986). A “sulfate” is “any of numerous chemical compounds relatedCourt No. 00-00174 Page 12

to sulfuric acid, H 2 SO 4 . One group of these derivatives is composed of sa lts containing the sulfate i on, SO 4 2- , and positively charg ed ions such as those of sodium, magnesium, or ammonium . . . .” 11 The N ew Enc yclop ædia Brit anni ca (Micr opæd ia) 366 (15th ed. 1986). Because the product under consider ation contains rare earth carbonate s but also contains rare earth ammonium double sulfates, the individual salts within the mixture cannot be described as dif ferin g in st ructu re from one an other only in h aving d iffere nt rar e earth catio ns. Al thou gh the rar e earth carbona tes and the rare

earth a mmonium dou

ble sulfa tes in the m

ixture all c ontain rare earth cations, they

do not all contain the same anion. See Explanatory Note 28.46 (stating that this heading will not include “mixtures of salts having different anions, whether or not the cation is the same”). Thus, the mixture under consideration is outside the scope of the heading as interpreted consistently w ith Explanatory Note 28.46, which clarif ies the meaning of the heading term “compounds . . . of mixture s of these metals” s uch that t he mixture u

nder con siderati on is not described by this term. B ecause no term of heading 2846 desc ribes the good, classification thereunder is precluded by application of GRI 1, HTSUS. De fe nd an t c ha ra ct er iz es th e r ar e e ar th am mo ni um do ub le su lf at es as “i mp ur it ie s” or “b yproducts” and directs the court’s attention to Note 1(a) to Chapter 28, HTSUS, under which, defenda nt argu es, the c ourt shoul d disreg ard the presenc e of the r are ea rth ammoni

um double sulfates for cla ssificat

ion purpos es. The c ourt find s no merit i n this arg ument. No te 1(a)to Chapter 2 8 provide s that “[e]xc ept wher e the con text otherw

ise requ ires, the heading s of this chapter apply

only to: (a) Separa

te chemical elements and separate che mically defined compounds, whether or not containing impurities . . . .” Note 1(a) to Ch. 28, HTSUS (1999). This chapter note

does not a

ddress, l et alone

resolve , the issue

of wheth er the r

are ea rthCourt No. 00-00174 Page 13

ammonium double sulfates should be disregarded as impurities for purposes of determining whether the import

ed good is descr ibed by the term “ compound s . . . of mixtur es of the se metals ” as used in heading 2846. I nstead, t he chap ter note

establishes the pr

inciple that a sepa

rate chemical element or a separate c hemically define d compound that contains impurities will not be excluded, solely

on the bas is of those

impuritie s, from a

heading within Cha

pter 28 that is confine d (as ar

e most of the headin

gs of the chapter ) to sepa rate ch emical e lements or separa te chemically de fined compounds. Heading 2846, however, is not confined to se parate chemical elements and sepa rate ch emically

defined compound s, as is mad

e clear by E xplanator y N ote 28.46 and also by the Ge

neral Explanatory Note to Chapte r 28, which lists heading 2846 as one of the spe cified “ exception s to the ru le that thi s Chapter

is limited to

separa te chemic al eleme

nts and separate chemically

defined compounds.” Thus, any valid arg

ument that the imported good is classified under heading 2846 c annot rely on Note 1( a) to Chapter 28, HTSUS. Defendant, however, also adva nces an argument to the effect that the rare ear

th ammonium double sulfates, even when considered apart fr om Note 1(a) to Chapter 28, must be treated as an impurity and disregarded because

plaintiff has not demonstr ated tha t the rar e earth ammonium do

uble sulf ates hav e a comme

rcial use . A flaw i

n this arg ument is ap

parent f rom an exa

mination of

the scope of headi ng 2846, the artic le descrip tion for w

hich explic itly

identifie s “compou

nds . . . of rare e arth meta

ls.” The r are ea rth ammonium double sulfates that defendants would have the court chara cterize as “impurities” are actually salts of r are ea rth metal s. Salts of

rare e arth meta

ls are, in disputabl y, r are ea rth compound s within the

scope of heading 2846; inde ed, Explanatory Note 28.4 6 sugg ests that s alts of rare earth metals are a

mong the principal groups of rare earth compounds that are classifiedCourt No. 00-00174 Page 14

within heading 2846. Because rar e earth compounds, including salts of rare ea rth metals, are the very subject o f headin

g 2846, t he court conclude s that it is im

permissib le to trea

t particu lar salts of rare earth metals that are pre sent within the imported mixture as “impurities” for purposes of determin ing whe ther the good und

er consi deration – a mixture consisting

principa lly o f rare earth compounds – falls within the scope of heading 2846. The difficulty with def

endant’s argument is even more appa rent when the scope of the heading is analy

zed according to Explanatory Note 28.46, which in the context of defining the heading term “compounds . . . of mixtures of these metals” confirms that ce rtain mixtures of rare earth c ompounds a

re within the scope of the he ading a

nd also pr ovides the

above-d escribe d test for mixture s of salts o f rare earth me tals, unde r which only

certain mixtures of

rare e arth salt s ( i.e. , those in w

hich all sa

lts prese nt have the same a

nion) fa ll within the

scope. I n setting forth the test, the Explanatory Note does not provide a n exception for rare earth salts present within a mixture that do not have, or may not have, a commercial use after isolation resulting from furthe r process ing of the mixture that occurs followin g import ation. The

Explanator

y N ote, rat

her, is concerned with the identity of the particular salts included in the mixture and in no way addresses the commercial uses, or absence of commer cial uses, to which components of the mixture may be suscepti ble follow

ing post- importati on proce ssing. T hus, the note sets forth a spe cific te st to define a critical term of the heading , “compounds . . . of mixtures of these metals,” which defendant’s classification argument e ssentially would require this cour t to disregard. Defendant’s argument, in this respect, would ha ve the court resolve the issue posed by the presence of the rare ea

rth ammonium double sulfates by resor t to a use-related principle that is at odds with the Explanat

ory Note and that appe ars nowh ere in th e langu age of the artic leCourt No. 00-00174 Page 15

descrip tion for h eading

2846 or in a

ny r elated s ection or

chapter note of th e HTSUS. F or these reasons, the court is unable to accept defe ndant’s overly br

oad construction of the scope of heading 2846. In re sponding

to a quest

ion by the cour t as to wha

t rule or t ariff c lassific ation prin

ciple other than Note 1(a) to Chapter 28 would require the c ourt to disregard the presence of the rare earth ammonium double sulfates, defendant points the court to the principle of de minimis non curat lex . Defendant cites as instructive the decisions in United States v. Cavalier Shipping Co. , 60 CCPA 152, C.A.D. 1103, 478 F.2d 1256 (1973), and Ginger Dry Ginger Ale, Inc. v. United States , 43 Cust. Ct. 1, C.D. 2094 (1959). However, neither Cavalier Shipping nor Ginger Dr

y Ginger Al e establishes a rule or principle applicable to the tariff c lassification issue presented by this case. Cavalier Shipping

involved the classification under the previous Tariff Schedule of the Un it ed St at es (“ TS US ”) of tw o f or mu la ti on s o f a li qu id pe st ic id e p ro du ct in wh ic h m et hyl bromide was the sole active ingredient. Cavalier Shipping , 478 F.2d at 1257. One formulation consisted of 98 percent methy l bromide and 2 percent chloropicrin; the other was comprise d of 68.6 percent methy

l bromide, 30 percent petroleum hy drocarbons (an inactive ingredie nt included as a diluent or propellant), and 1.4 percent chlor opicrin. Id. In both formulations, the chloropi crin, wh

ich in the low level s presen

t had no pe sticidal propertie s, was inc luded to provide a unpleasant aroma that would serve as a warning of the hazardous presence of the methyl bromide in the event of le akage of the product. Id. The U.S. Court of Customs and Patent Ap peals (“ CCPA”), affirming the judg ment of the

U.S. Customs

Court, re jected the claim that the product was classifiable under item 405.15, TSUS as a pesticide obtained, der ived, orCourt No. 00-00174 Page 16

manufactured in part from a benzenoid product, eve n though appellant had established that the chloropicrin was of benzenoid origin. Id. at 1259. The CCPA adopted the reasoning of the Customs Court, which applied a quantitative-functional test under which the TSUS provision for pesticides in part of benzenoid origin will describe an article c ontaining any amount of a benz enoid ingred ient t hat pl ays a part i n the a rticl e’s pri ncipa l func tion or an ar ticl e cont ainin g a benzenoid

ingred ient that d

oes not pla

y a part in the

article ’s princ ipal function, but is nevertheless present in commercially meaningful quantities. Id. at 1257-5 9. By the same reasoni ng, the CCPA rejec

ted appe llant’s a

lternati ve class ification in item 409 .00, TSUS, a s a mixture in part of a benzenoid pesticide product and affirmed classification in item 429.48, TSUS, which applied to other halogenated hy drocarbons. Id. at 1259. The CCPA in Cavalier Shipping reached its determination of classification by construing various TSUS provisions that are not analogous to the HTSUS provisions at issue in this case, including a headnote that defined “in part of” as containing “a significant quantity of the named material” and to which a de minimi s rule was applicable, and a TSUS principle assessing mixtures at the highest rate applicable to any component material. 478 F.2d at 1257-59. Accordingly , Cavalier Shipping does not establish a rule or principle under which the court may disreg ard the presenc e of the r are ea rth ammoni

um double s

ulfates. Ginger Dr

y Ginger Ale , which also arose under the previous TSUS, involved the issue of the tariff classification of an imported flavoring extract used in manufacturing ging er ale. 43 Cust. Ct. a

t 1. The extract con

tained a n amount of

ethy l alcohol found upon testing

to comprise 0.49 percent of the product by weight. Id. at 2. The

alcohol p erforme d no func tion in the imported flavoring extract and was present in a tra ce amount as a result of the process byCourt No. 00-00174 Page 17

which ginger extract, an ing redient in the imported flavoring extract, had been obtained f rom ginger root using alcohol as a solvent. Id. The Customs Court, rejecting the government’s classification of the product as “a flavoring extract containing not over 20 per centum of alcohol,” determined the proper classification to be a s “a flavoring extract ‘not containing alcohol, and not specially pr ovided for.’” Id. at 1-2, 9. The Customs Court reasoned that “the maxim de minimis non curat lex is applicable to the imported merchandise.” Id. at 9. After analyzing other

cases in which the de minimi s principle was either applied or rejected, the Customs Court applied the principle, finding significant that the alcohol was prese nt only in a trace amount, had not been deliberately added, and performed no function. Id. at 3-9. The de minimi

s principle applied in Ginger Dr y Ginger Aledoes not a

llow the c ourt to disregard the presence of

the rare earth ammonium double sulfates for purposes of determining the scope of headi ng 2846, HTSUS. The

alcohol i n the impor

ted flav oring extract wa s presen t in

a trace amount (0 .49 perc ent). Tha t cannot b e said of

the rar e earth ammonium do

uble sulf ates, which are present at a level of 4 per cent (6 percent on a dry

weight basis) and which, as discussed above, consist of rare earth salts rather than a substance outside the scope of the heading under consideration. D. The Imported Merc

handise Properly I s Classified in Subheading 3824.90.39, HTSUS (“Mixtures of Two or More Inorg anic Compounds”) Heading 3824, HTSUS, broadly includes within its scope “. . . chemical products and preparations of the chemical or allied industries . . . not elsewher e specified or included . . . .” As indicated by Explanatory

Note 38.24, the heading includes numerous products and pre parations for whic h the comp osition is no t chemica lly d efined. The term s of the he ading a re suff icientlyCourt No. 00-00174 Page 18

broad to include the imported good. Within the heading, subheading 3824.90.39, HTSUS pertains generally

to “[m]ixtures of two or more inorganic compounds” that do not fall within the speci fic mi xtu res of i norgan ic com pound s desc ribed in su bhead ings 3 824.9 0.31 t hrough 3824.90.3 6, HTSUS. All compoun ds in the imp orted mixtur e indisput ably are inor ganic compounds, including the carbonates, which, although c ontaining the carbon atom, are considered to be inorganic. 6 The New Encyclopædia Britannica (Micropædia) 327 (15th ed. 1986) (stating that an “inorganic c ompound” is “any substance in which two or more chemical elements other than carbon are combined, ne arly alwa ys in definite proportions” and tha t “[c]ompounds of carbon are classified as orga nic except for carbides, carbonates, cy anides, and a few others”). Defendant argues that the imported produc t is excluded from heading 3824 because of the heading term “no t elsewhe

re spec ified or i

ncluded, ” based o

n its conte

ntion that t

he produ ct is described by

the terms of heading 2846. The court reje cts this contention for the reasons previous ly d

iscussed . Defen

dant off ers no other rea son why

the import

ed produ ct would not fall within hea

ding 382 4 and be d

escribe d by

subhead ing 3824 .90.39, H TSUS. III. C ONCLUSI ON The imported product is properly classified in subheading 3824.90.39, HTSUS (1999), fr ee of du ty. Ju dg me nt wi ll be en te re d a cc or di ng ly. /s/ Timothy C. Stanceu Timothy C. Stanceu Judge Dated: July 28, 2006 New York, New York