CLA-2 RR:TC:MM 957535 JAS
Port Director of Customs
477 Michigan Avenue
Detroit, Michigan 48226
RE: I/A 27/95; Profile Slabs, Semifinished; Chapter 72, Note
1(ij); Slab Rolled From Ingot, Hot Scarfed Between
Rollings; Flat-Rolled Products, Chapter 72, Note 1(k),
Further Worked, Chapter 72, Additional U.S. Note 2; NY
896625, HQ 088116; Established and Uniform
Practice, 19 U.S.C. 1315(d); Invoicing, Section 141.86,
Customs Regulations
Dear Port Director:
This request for internal advice was initiated by
letter, dated May 31, 1995, from counsel for Wirth Limited, to
the Area Director of Customs, New York, and concerns the tariff
classification of certain hot-rolled carbon steel products
produced in Brazil. In preparing this ruling, we have taken into
consideration counsel's supplemental submissions dated July 31
and September 19, 1995, and January 25, 1996.
FACTS:
The merchandise in issue is carbon steel profiling
(profile) slabs that were hot rolled in Brazil from ingots by
Companhia Siderurgica de Tubarao (CST). These products range from
118 to 492 inches long, from 25 to 78 inches wide and from 4 to
18 inches in thickness. The ingots are heated in a batch furnace
to rolling temperatures of 2,400 degrees F, then subjected to
multiple rolling passes. After one or more lengthwise rolling
passes in the slabbing mill, they are hot scarfed in a process
designed to remove surface imperfections arising from defects in
the ingot or during the initial heating and rolling. In a
typical 4-inch thick slab, both surfaces are hot scarfed,
effectively removing 3 mm from the entire surface of the slab.
In this process, the slab is rolled directly to the hot scarfer,
then returned to the rolling stand, where the remainder of up to
twenty four rolling passes are completed.
- 2 -
The resulting product is called profile slab, and is
said not to be intended for reheating and rerolling after
importation. Rather, the slabs are cut into profile shapes by
gas-cutting processes which counsel maintains makes them suitable
for use as counter weights for lifting equipment , cranes and
drag lines, machine bases for presses, molds for tire
manufacturers, spacers/washers for steel cylinders, and for other
non-structural applications. These profile slabs are rolled
longitudinally only and have rolled mill edges and tong marks, as
well as rough surfaces and roll marks, which are claimed to be
characteristic of semifinished steel mill products.
The profile slabs in issue were entered under a provision in
heading 7207 for other semifinished products of iron or nonalloy
steel of rectangular (other than square) cross section. Counsel
maintains these profile slabs are semifinished for tariff
purposes because they have not been further worked beyond primary
hot rolling, as the term "further worked" is defined in the
relevant Additional U.S. Note to Chapter 72. Moreover, counsel
claims that pursuant to 19 U.S.C. 1315(d), there is an
established and uniform practice to classify profile slabs as
semifinished products of iron or nonalloy steel. Your office
believes the merchandise is a flat-rolled product of iron or
nonalloy steel of the type provided for in heading 7208.
The provisions under consideration are as follows:
7207 Semifinished products of iron or
nonalloy steel:
Containing by weight
less than 0.25 percent of carbon:
7207.12.00 Other, of
rectangular (other than square) cross
section...3.4 percent ad
valorem
* * * *
7208 Flat-rolled products of iron or
nonalloy steel, of a width of 600
mm or more, hot-rolled, not clad, plated or coated:
Other, not in coils,
not further worked than hot-rolled:
7208.42.00 (now 51.00) Of a thickness exceeding
10 mm...4.8 percent
ad
valorem
ISSUE:
Whether an established and uniform practice exists in the
classification of carbon steel profile slabs; whether these
profile slabs are semifinished articles for tariff purposes. - 3 -
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part
that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized System. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes
the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg.
35127, 35128 (Aug. 23, 1989).
The term Semifinished products is defined, in relevant part,
as other products of solid section, which have not been further
worked than subjected to primary hot-rolling or roughly shaped by
forging, including blanks for angles, shapes or sections.
Chapter 72, Note 1(ij), HTSUS. The term Flat-rolled products is
defined, in relevant part, as rolled products of solid
rectangular (other than square) cross section, which do not
conform to the definition at (ij), in the form of straight
lengths, which if of a thickness less than 4.75 mm are of a width
measuring at least 10 times the thickness or if of a thickness of
4.75 mm or more are of a width which exceeds 150 mm and measures
at least twice the thickness. Chapter 72, Note 1(k), HTSUS.
Counsel asserts that under 19 U.S.C. 1315(d), an
established and uniform practice exists to classify profile slabs
under subheading 7207.12.00, HTSUS, based on the principles of
Heraeus-Amersil, Inc. v. United States, 9 CIT 412 (1985), and
related cases. Specifically, counsel maintains that twenty six
(26) entries of merchandise invoiced as profile slabs, made by
two importers - the internal advice applicant and one other - at
eight different ports of entry over a six-year period, from 1989
through and including 1994, were uniformly liquidated under the
claimed provision. The Court stated in Heraeus that
determinations under 19 U.S.C. 1315(d) can be made on a case-by-case basis according to certain guiding principles. Factors to
be considered are the number of entries resulting in the alleged
uniform classifications, the number of ports at which the
merchandise was entered, the period of time over which the
alleged uniform classifications took place, and whether there had
been any uncertainty regarding the classification over its
history. In Washington Handle Co. v. United States, 34 CCPA 80,
C.A.D. 346 (1946), questions as to the identity of merchandise,
its manner of invoicing, and/or its method of manufacture were - 4 -
held to create "considerable uncertainty" as to the proper
classification of twenty eight (28) shipments of broom handles so
as to result in a finding that no established and uniform
practice of classifying this merchandise existed.
In the present case, invoices for an entry submitted by
counsel and for 7 randomly selected by the appropriate National
Commodity Specialist were reviewed for accuracy of description.
These were deemed representative of the twenty six (26) entries
under consideration. The invoices for 6 of these 8 entries
describe the merchandise as slabs or hot rolled slabs, which
would lead a Customs officer to believe that they were, in fact,
semifinished articles. There is no reference in any of these
invoices to profile or profiling slabs. Since the invoice
descriptions in a number of entries were misleading, or at best
inaccurate, we conclude there is uncertainty during the time
period represented by the sampled entries whether the merchandise
was correctly classified. For these reasons, the record does not
support a finding that an established and uniform practice exists
as to the classification of the merchandise in issue.
As to whether the merchandise is "semifinished" for tariff
purposes, slabs and other semifinished steel products are not
made to American Society for Testing and Materials (ASTM) or
other industry specifications. On the other hand, plate and
other finished steel products, are made to an ASTM or recognized
industry specifications. Specifically, ASTM Specification A 6 is
the Standard Specification for Rolled Steel Plates, Shapes, Sheet
Piling, and Bars for Structural Use, and contains
dimensional/tolerance/flatness requirements for rolled steel
plate. ASTM Specification A 36 is the Standard Specification for
Structural Steel, and contains chemical and tensile requirements
for carbon steel plates and other structural quality steel. For
a product to conform to industry specifications for plate, it
must meet both the requirements of ASTM A6 and A 36. Therefore,
any steel product described as semifinished, but which conforms
to an ASTM or other industry specification for plate or other
finished steel product, must be classified as a finished steel
product.
The definitions for "semifinished" and "flat-rolled" do not
define the terms "primary hot-rolling" and "rolling" which are
used to describe the condition of the steel products that result
from these processes. It is noted that hot scarfing is a
conditioning operation normally conducted after rolling to remove
surface defects from semifinished steel before it is rolled,
forged or otherwise hot formed into a finished steel product.
Normally, reroll slab is a type of semifinished steel product
intended for further hot working and is usually hot scarfed after
the rolling process is completed. In this instance, the steel is
hot scarfed prior to completion of the rolling, but no reason is
given. Also, in the production of reroll slab the ingot is
normally rolled several times, whereas in this case, the steel is
subjected to as many as twenty four passes. However, no
definitive conclusions can be drawn from these apparent
deviations from normal slab production. - 5 -
In discussing slabs and sheet bars of heading 7207, relevant
ENs at p. 991 refer to heading 7208 ENs regarding the distinction
between these products and certain plates. The heading 7208 ENs
at p. 994 state in relevant part that certain sheets and plates
may have dimensions similar to those of slabs and sheet bars.
However, they can be distinguished from slabs and sheet bars
since:
(1) They are most often cross-rolled (longitudinally and
transversely) and sometimes oblique-rolled
whereas
slabs and sheet bars are roughly rolled
longitudinally
only (in the slabbing or roughing mill).
(2) Their edges are normally sheared or frame-cut and show
traces of the shears or frame whereas slabs and
sheet
bars have round edges.
(3) Tolerances as to thickness and surface defects are very
strict whereas slabs and sheet bars are not of
uniform
thickness and show various surface defects.
The available information indicates these profile slabs have
rough surfaces and are rolled in the longitudinal direction only
and have rolled edges. These are characteristics of semifinished
slabs, not finished plates. Moreover, the concerned import
specialist confirms the mill sheets bear the designation "A 36"
which represents the steel's chemical composition. The mill,
however, guarantees only nominal thicknesses and widths.
The profile slabs in issue do not comport with the cited
ENs. Specifically, there is no evidence in the file that the
imported hot-rolled products meet an industry standard for the
close tolerances required for flat-rolled plate, nor is there
evidence that the profile slabs are rolled to requirements
established by the importer or specific end-user, to tolerances
which are comparable in accuracy to an industry standard for
flat-rolled products. NY 896625, dated April 21, 1994, is in
accord.
Our decision to classify the profile slabs in issue as
semifinished products of iron or nonalloy steel is based on the
information available to us at this time. Any change in the
facts, as presented, to include laboratory analysis, and other
credible evidence as to the existence of production standards for
dimensional tolerances equivalent to those for flat-rolled
products, may result in a different conclusion. See HQ 088116,
dated February 27, 1991.
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We are advised that representative invoices for the entry or
entries under consideration here describe "slabs" or "hot rolled
slabs." This creates the permissible inference, without further
inquiry, that the steel was, in fact, semifinished. Particularly
where merchandise of this type is involved, greater care should
be exercised to insure that the merchandise is accurately
invoiced. See Section 141.86(a)(3), Customs Regulations.
HOLDING:
Under the authority of GRI 1, carbon steel profile slabs,
the subject of this ruling, are provided for in heading 7207.
They are classifiable in subheading 7207.12.00, HTSUS.
You should mail this decision to the internal advice
applicant, through counsel, no later than 60 days from the date
of this letter. On that date 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 to the public
via the Diskette Subscription Service, the Freedom of Information
Act, and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division