CAFC Rules Surface-Modified Silicon Dioxide is Classified in HTS Chapter 38
In Degussa Corp. v. U.S., the Court of Appeals for the Federal Circuit reversed the Court of International Trade's classification decision and agreed with the government that certain surface-modified silicon dioxide AEROSIL products should be classified under Harmonized Tariff Schedule heading 3824.
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The AEROSIL products consisted of silicon dioxide (also known as "silica"), which had been surface-modified with silanes or silicone oil. The resultant surface was comprised of hydrocarbon parts bonded to the silica surface in the manufacturing process. This modification changed the silica from hydrophilic or water-attractive to hydrophobic or water-repellent.
Customs had asserted that a modified surface in the form of hydrocarbon parts, introduced in the manufacturing process prevented classification of Degussa's products under HTS 2811 citing Explanatory Note 1(a) to HTS Chapter 28. This Note states that when substances are deliberately left in the product with a view to rendering it suitable for a specific use, they are not regarded as permissible impurities.
The CIT, while acknowledging that the silica contained an impermissible impurity, reasoned that because this impurity was not specifically cited as one of the listed exclusions in the Explanatory Note, it was properly classified under HTS Chapter 28.
The CAFC reviewed the Explanatory Note, however, and concluded that the listed examples were not exhaustive, and that since the product contained an impermissible impurities (water-repellents), it was excluded from classification in HTS Chapter 28.
The CAFC further noted that since the surface-modification of the silica was not in exact portions, it could not be considered a separate chemically defined compound. Therefore, the court ruled that Degussa's surface-modified silica was properly classified under HTS 3824 as a miscellaneous chemical product.
(See ITT's Online Archives or 09/15/06 news, 06091520, for BP summary of the CIT's ruling that silicon dioxide is classified under Chapter 28.)
CAFC decision 07-1020 (dated 11/26/07) available at http://www.cafc.uscourts.gov/opinions/07-1020.pdf