CLA-2 CO:R:CV:G: 081550 JLV
Paul C. Rosenthal, Esq.
Collier, Shannon, Rill & Scott
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20007
RE: Silicon electrical steel in toroids; unfinished parts of
transformers; 19 U.S.C. 1516
Dear Mr. Rosenthal:
In a petition of January 4, 1988, on behalf of Armco,
Inc. and Allegheny-Ludlum Steel Corp., filed pursuant to
section 516, Tariff Act of 1930, as amended (19 U.S.C. 1516),
you challenged our classification of certain toroids as parts
of transformers in item 682.60, Tariff Schedules of the United
States (TSUS). The petition was accepted and notice of
receipt of the petition was published on July 14, 1988, in the
Federal Register (53 FR 26605). Six commentors, including the
petitioners, responded to the notice and request for comments.
This letter is our decision on the petition.
FACTS:
The articles in issue are called "toroids" and consist of
lengths of silicon electrical steel which are wound in a
specific manner so as to be layered to produce air gaps at
specific distances. The size of the toroid and the number of
layers of silicon steel are specific and determine the
application of the toroid. The toroids may either be welded
or riveted to maintain the shape.
Subsequent processing of a toroid includes forming into a
rectangular shape, annealing to remove mechanical stresses,
disassembly and reassembly in the same order around a coil,
and addition of insulation and binding materials.
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In a ruling letter of December 23, 1986 (file 077880), we
held that these toroids were unfinished electrical components
and classified as parts of transformers in item 682.60, TSUS.
ISSUE:
Are the toroids unfinished parts of transformers and,
therefore, classifiable in item 682.60, TSUS, or are they
basic shapes (sheets or strip) in coil form, and classifiable
in schedule 6, part 2, subpart B, TSUS?
LAW AND ANALYSIS:
Note 1(iv), schedule 6, part 2, TSUS, excludes from that
part "(iv) other articles specially provided for elsewhere in
the tariff schedules, or parts of articles." The scope of
this exclusion has been discussed in many judicial opinions.
See, for example, E.R. Hawthorne & Co, Inc. v. United States,
730 F.2d 1490 (Fed. Cir. 1984), and cases cited therein. In
this case, if the toroids are recognizable as parts of
transformers, then they are precluded from classification in
schedule 6, part 2, TSUS, even though they may be unfinished
at the time of importation. General Interpretative Rule
10(h), TSUS.
Among the arguments presented by you, the policy
consideration (intent of the voluntary restraint arrangements
on steel products) and the substantial transformation issue
are not relevant to the classification issue challenged by the
the petitioners.
Although cutting to length and winding into a
specifically layered coil may not constitute high-cost
processing operations, the resulting article is recognizable
as an unfinished core for a transformer. The relevant
specifications, i.e., the inside circumference, the cross
sectional area, the location of the joints, and the number of
sheets, are specific characteristics of the toroids and limit
the use of the toroids as parts of electrical transformers.
The toroids have a character and identity that is fixed with
certainty. We distinguish these cut and assembled lengths of
silicon electrical steel from the material lengths, in coil,
of silicon electrical steel. In the latter case, there is no
recognizable article and is precluded from classification as a
part, even though the material may be dedicated for making the
individual articles. Avins Industrial Products Co. v. United
States, 515 F.2d 782 (CCPA 1975).
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HOLDING:
The toroids are unfinished parts of transformers. We
affirm our classification set forth in the ruling letter of
December 23, 1986 (file 077880).
Sincerely,
Harvey B. Fox
Director
Regulations and Rulings
6cc: AD NY Seaport
2cc: Chief, CIE
1cc: Chief, Regulations & Disclosure Law Branch
1cc: Director, Trade Ops
1cc: AC, CO
1cc: Director, ComRulDiv
1cc: Director, Agreements Compliance (ITA, Dept. of Commerce)
1cc: Reading File
LIBRARY: valentin
FILE NAME: 081550