CLA-2 RR:TC:MM 958865 JAS
F. Gordon Lee, Esq.
O'Connor & Hannan, L.L.P.
1919 Pennsylvania Avenue, Suite 800
Washington, D.C. 20006-3483
RE: NY 809749 Modified; Slider Plate Blank; Flat-Rolled Article of Iron or Nonalloy Steel, Heading 7208, Chapter 72 , Note 1(k); Article of Iron or Steel Forged or Stamped but Not Further Worked, Heading 7326; Automotive Parts or Accessories, Heading 7208; Unfinished Article, Essential Character, GRI 2(a); HQ 956790, Motor Wheel Corporation v. United States, Avins Industrial Products Co. v. United States
Dear Mr. Lee:
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C.
1625(c)(1)), as amended by section 623 of Title VI (Customs
Modernization) of the North American Free Trade Agreement
Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993),
notice of the proposed modification of NY 809749, dated May 28,
1995, was published on November 13, 1996, in the Customs
Bulletin, Volume 30, Number 45/46.
FACTS:
In NY 809749, dated May 28, 1995, issued to the broker for
your client, Holland Hitch Company, the Area Director of Customs,
New York Seaport, held that merchandise described as slider plate
blanks were classifiable in subheading 7225.40.30, Harmonized
Tariff Schedule of the United States (HTSUS), as flat-rolled
products of other alloy steel.
Slider plate blanks are produced in Canada from hot-rolled
flat-rolled steel in coils. These coils are slit into uniform
widths specified by the client, after which they are cold rolled
to reduce their thickness by 1 to 2 thousandths of an inch. The - 2 -
product is then cut to eight different, specific lengths and
rolled again to insure uniform flatness along the entire surface.
This second rolling does not significantly reduce the products'
thickness. In their condition as imported, these blanks are
946.15 mm wide, 7.93 mm thick, and vary in length from 833.1 mm
to 2387.6 mm.
After importation, two holes are punched at the forward end
of each blank to accommodate air hoses after which the blank is
placed in an edge bending machine which curls both side edges
into a U-shape. This completes the slider plate. A rack,
described as a gear-like piece designed to position a fifth wheel
trailer so as to properly distribute its weight on the truck
tractor is then welded to the slider plate along the curled edges
to form a slider base. The center portions of the six shortest
plates are removed by torch cutting to reduce their weight. The
centers of the two longest plates are not removed because
increased strength is required in their applications with heavy
duty vehicles. Blocks called stop bars are then welded to the
front end of the plate on each slider base, a fifth wheel member
is mounted, and stop blocks welded to the back end of the plate.
This completes an automotive component known as a fifth wheel
assembly which will be mounted on the rear of a truck tractor to
facilitate the coupling of a trailer.
As a preliminary matter, we agree that NY 809749 mistakenly
classified the slider plate blanks in a provision for products of
other alloy steel when, in fact, a review of the chemistry
confirms that most, though not all of them, are of nonalloy
steel. More specifically, you contend that slider plate blanks
are unfinished automotive parts and accessories for tariff
purposes, provided for in appropriate provisions of HTS heading
8708. Alternatively, you contend they are articles of iron or
steel, forged or stamped but not further worked, provided for in
provisions of heading 7326. In either case, you contend that
these Canadian articles are fabricated components and, therefore,
eligible for duty-free entry under the Automotive Products Trade
Act of 1965, as amended (APTA).
The provisions under consideration are as follows:
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: - 3 -
7208.52.00 Of a thickness of 4.75 mm or more but not exceeding 10 mm
* * * *
7225 Flat-rolled products of other alloy steel, of
a width of 600 or more:
Other, not further worked than hot-rolled,
not in coils:
7225.40.30 Other
* * * *
7326 Other articles of iron or steel:
Forged or stamped, but not further worked:
7326.19.00 Other
* * * *
8708 Parts and accessories of the motor vehicles
of headings 8701 to 8705:
Other parts and accessories:
8708.99 Other:
Other:
8708.99.80 Other
ISSUE:
Whether slider plate blanks are flat-rolled products of iron
or nonalloy steel, articles of iron or steel, or unfinished
automotive parts or accessories.
LAW AND ANALYSIS: - 4 -
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. GRI 2(a)
states in part that any reference in a heading to an article
shall include that article incomplete or unfinished, provided
that, as entered, the unfinished article has the essential
character of the complete or finished article.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENS) constitute the official interpretation of
the Harmonized System. While not legally binding, 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 "flat-rolled products" is defined in part to
include rolled products of solid rectangular (other than square)
cross section, which do not conform to the definition of
"semifinished products" in Note (ij) in the form of straight
lengths, which if of a thickness 4.75 mm or more are of a width
which exceeds 150 mm and measures at least twice the thickness.
See Chapter 72, Note 1(k), HTSUS.
Your first claim is that, at the time of importation, the
slider plate blanks are unfinished automotive parts and
accessories, having the essential character of complete or
finished goods provided for in heading 8708. This claim is based
on your assertion that the blanks have exacting measurements and
sizing, extremely tight surface tolerances, meeting high strength
and durability specifications required of a finished slider
plate. You state these latter characteristics are achieved by
altering the chemical composition of the product and through
thermal/mechanical processing. In support of this claim you cite
several court cases decided under the Tariff Schedules of the
United States, the HTSUS' predecessor tariff code, on stainless
steel wire, seamless tubing, contact tape, nematic liquid
crystals and aluminum plates. The issue in each case was whether
a material may be considered an unfinished article for tariff
purposes, that is, whether upon importation it had been advanced
to a point where it was dedicated to and commercially fit for use
only as the finished article. As you know, cases decided under - 5 -
the TSUS are not dispositive in interpreting the HTSUS. However,
on a case-by-case basis such decisions may be instructive,
particularly where the nomenclature remains unchanged and no
dissimilar interpretation is required by the text of the HTS.
The cases you cite do not deal with rectangular, nonalloy steel
shapes, nor do they contain any discussion of essential
character, a concept that did not exist under the TSUS. For
these reasons, the cited cases are of little value as precedent
under the HTSUS.
In our opinion, the provisions of GRI 2(a) relating to
unfinished articles apply to the imported merchandise if they
qualify as blanks. The ENS to GRI 2(a) provide specific guidance
on the application of the rule to articles referred to as
"blanks." EN (II) to the GRI states on p. 2:
(II) The provisions of this rule also apply to
blanks unless these are specified in a
particular heading. The term "blank" means
an article, not ready for direct use,
having the approximate shape or outline of
the finished article or part, and which can
only be used, other than in exceptional
cases, for completion into the finished
article or part.
Semi-manufactures not yet having the
essential shape of the finished articles
(such as is generally the case with bars,
discs, tubes, etc.) are not regarded as
"blanks."
The ENS establish two criteria for articles which are
"blanks" for GRI 2(a) purposes: approximate shape or outline and
sole use for completion into the finished article or part. It is
apparent to us that the slider plate blanks fail both parts of
the test. In our opinion, these articles do not have the
approximate shape or outline of a slider plate. It is only after
the side edges are formed into a U-shape and the holes punched
that the identity of a slider plate is established. As imported,
these blanks have neither the form nor shape, or any visually
identifiable characteristic of an automotive component. As
imported, they are flat-rolled products with a rectangular shape
and nothing more. Of equal importance, there is no evidence that
rectangular steel shapes with the same chemical composition,
close dimensional tolerances, and mechanical and yield
characteristics can only be used for completion into slider - 6 -
plates. The record does not establish that rectangular shapes
with identical chemistry and dimensional tolerances are incapable
of being made into more than one article. See Avins Industrial
Products Co. v. United States, 72 Cust. Ct. 43 (1974), aff'd. 515
F. 2d 782 (CCPA 1975). For these reasons, the articles in issue
do not qualify as blanks for tariff purposes, and do not have the
essential character of parts and accessories of heading 8708. By
contrast, HQ 956790, dated October 28, 1994, held that certain
cut-to-length and processed steel tubes did meet the criteria for
blanks, having the essential character of finished or complete
rear drive axle assemblies. In that case, however, the cut-to-length tubes were subjected to considerably more processing
before importation. They were rolled inside and outside to
create uneven wall thicknesses, and the ends tapered to
accommodate a mounted wheel bearing on one end and an axle
carrier on the other end. It was clear in HQ 956790 that the
tube lengths could only be used for completion into axle
assemblies.
Your alternative claim is that, upon importation, the slider
plate blanks are provided for in heading 7326 as articles or iron
or steel, forged or stamped, but not further worked. In support
of this claim you cite Motor Wheel Corp. v. United States, Slip
Op. 95-49 (Ct. Int'l Trade, decided March 20, 1995), in which
circular or octagonal shapes cut from hot-rolled steel coil were
held to be classifiable in subheading 7326.19.00, HTSUS, as
articles of iron or steel, forged or stamped, but not further
worked, rather than as flat-rolled products of iron or nonalloy
steel. The articles in Motor Wheel were processed, after
importation, into finished automotive wheel discs by undergoing
between five and nine additional forming operations. The
finished wheel discs were then assembled with wheel rims created
by a separate process. In our opinion, the court's finding was
predicated on the proviso in HTS Chapter 72, Note 1(k), that
flat-rolled products of a shape other than rectangular or square
are removed from headings for flat-rolled products if they assume
the character of articles or products of other headings. Because
the slider plate blanks in issue here are rectangular in shape,
the proviso in Note 1(k) does not operate to remove them from
headings 7208 and 7225. We note also that the ENs at p. 981
state, in part, that very light cold-rolling processes applied to
certain hot-rolled flat products that do not significantly reduce
their thickness does not change their character of finished hot-rolled products. This describes the cold rolling of the slider
plate blanks in issue. - 7 -
You also cite the ENs at p. 1037 which state that heading
7326 covers all iron or steel articles obtained by forging or
punching, by cutting or stamping or by other processes such as
folding, assembling, welding, turning, milling or perforating.
The slider plate blanks, you contend, meet this description.
However, the ENs which you cite exclude from heading 7326
articles included in the preceding headings of Chapter 73, or
covered by Note 1 to Section XV, or included in Chapter 82 or 83,
or more specifically covered elsewhere in the Nomenclature. The
slider plate blanks are squarely within the Chapter 72 legal note
defining flat-rolled products. Because they are not within the
proviso in HTS Chapter 72, Note 1(k), these articles are
specifically covered by headings 7208 and 7225. For these
reasons, the potential eligibility of this merchandise under the
APTA is moot.
HOLDING:
Under the authority of GRI 1, slider plate blanks made from
hot-rolled, flat-rolled steel in coils are provided for in
heading 7208, if nonalloyed, or in heading 7225, if of other
alloy steel, as defined in Chapter 72, Note 1(f), HTSUS. They
are classifiable in subheading 7208.52.00 or in subheading
7225.40.30, HTSUS, as appropriate.
NY 809749, May 28, 1995, is modified accordingly. In
accordance with 19 U.S.C. 1625(c)(1), this ruling will become
effective 60 days after its publication in the Customs Bulletin.
Publication of rulings or decisions pursuant to 19 U.S.C.
1625(c)(1) does not constitute a change of practice or position
in accordance with section 177.10(c)(1), Customs Regulations (19
CFR 177.10(c)(1)).
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division