CLA-2 RR:CR:GC 961291 JAS
Port Director of Customs
P.O. Box 1490
St. Albans, VT 05478
RE: PRD 0201-97-100272; Titanium Sheets; Waste and Scrap, Section XV, Note 8(a), Subheading 8108.10.10; Remelt Scrap; Titanium Sheet, Subheading 8108.90.60; Remelt Titanium, Articles of Metal to be Used in Remanufacture by Melting, Subheading 9817.00.90; HQ 958806
Dear Port Director:
This is our decision on Protest 0201-97-100272, filed
against your classification under the Harmonized Tariff Schedule
of the United States (HTSUS) of titanium from Germany imported in
rectangular shaped pieces. The entry under protest was
liquidated on September 12, 1997, and this protest timely filed
on December 10, 1997.
FACTS:
The titanium under protest is described as scrap imported as
a raw material for the production of titanium ingots. It is
imported in rectangular shapes, typically 4ft. x 8ft. as
evidenced by a sample submitted to your office, and may have the
physical characteristics and appearance of mill products such as
rod, bar and billet. After importation, the titanium is
subjected to one or more of the following processes: cold hearth
melting by electron beam or plasma torch, vacuum arc remelting or
plasma consolidation with sponge, alloy titanium and other
titanium scrap materials, all processes utilized in titanium
ingot production.
The merchandise was entered under a provision in HTS heading
8108 for titanium waste and scrap. In a memorandum of law filed
in support of the protest counsel for the protestant maintains
that, as imported, the titanium is waste and scrap as it is
suitable for no other purpose than remanufacture. This
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contention is based on market pricing information that
merchantable titanium is priced almost three times higher than
the titanium under protest. Alternatively, a claim is made under
a provision in HTS heading 9817 as articles of metal to be used
in remanufacture by melting. Counsel claims there is compliance
with the three-part test under heading 9817 outlined in numerous
administrative rulings. Among the documents submitted in support
of this claim is a declaration of intent by the importer to
process the titanium as to render it fit only for the recovery of
the titanium content and a statement of actual use covering the
entry under protest, attesting to the fact that the merchandise
was submitted to a process of compacting and mutilating so as to
render it fit only for the recovery of metal content. On the
belief that the submitted sample was neither waste and scrap nor
an unwrought form of titanium, but rather titanium sheet, you
liquidated the entry under a provision in HTS heading 8108 for
other titanium.
The provisions under consideration are as follows:
8108 Titanium and articles thereof, including waste and scrap:
8108.10 Unwrought titanium; waste and scrap; powders:
8108.10.10 Waste and scrap
8108.90 Other:
8108.90.60 Other
* * * *
Unwrought metal including remelt scrap
ingot...in the form of ingots...which are
defective or damaged, or have been produced from melted down metal waste and scrap for
convenience in handling and transportation without sweetening, alloying, fluxing or
deliberate purifying, and which cannot be
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commercially used without remanufacture...;
Articles of metal (...not including unwrought
metal provided for in chapters 72-81) to be
used in remanufacture by melting...:
9817.00.90 Other
ISSUE:
Whether the titanium in issue is waste and scrap of heading
8108; whether it is eligible for duty-free entry in heading 9817
as articles of metal to be used in remanufacture by melting.
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.
Initially, Section XV, Note 8(a), HTSUS, defines Waste and
scrap as "Metal waste and scrap from the manufacture or
mechanical working of metals, and metal goods definitely not
usable as such because of breakage, cutting-up, wear or other
reasons." Photographs purporting to show the condition of the
merchandise, as imported, to be waste and scrap are not a part of
the protest file. There is no further argument that, or evidence
in the file from which we can independently determine whether the
titanium conforms to the definition in Note 8(a).
Pursuant to Chapter 98, U.S. Note 1, HTSUS, even if the
merchandise is other titanium of subheading 8108.90.60, HTSUS, or
is classifiable elsewhere in HTS chapters 1 through 97, if it is
an article described in any provision in chapter 98 it is
classifiable in said provision if the conditions and requirements
thereof and of any applicable regulations are met.
As stated in HQ 958806, dated July 26, 1996, and related
cases, subheading 9817.00.90 describes three types of goods:
(1) Unwrought metal including remelt scrap ingot (except copper, lead, zinc and tungsten) in the form of pigs, ingots, or billets
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(a) which are defective or damaged, or have been
produced from melted down metal waste and scrap
for convenience in handling and transportation
without sweetening, alloying, fluxing or
deliberate purifying, and
(b) which cannot be commercially used without
remanufacture;
(2) relaying or rerolling rails; and,
(3) articles of metal (except articles of lead, or zinc or
of tungsten, and not including metal-bearing materials
provided for in section VI, chapter 26 or subheading
8548.10 and not including unwrought metal provided for
in chapters 72-81) to be used in remanufacture by
melting or to be processed by shredding, shearing,
compacting, or similar processing which renders the
fit only for the recovery of the metal content.
The titanium under protest is not unwrought for tariff purposes,
nor is it relaying or rerolling rails. However, pursuant to
section 54.5(a), Customs Regulations (19 CFR 54.5(a)), articles
predominating by weight of metal to be used in remanufacture by
one or more of the processes described in (3), above, and which
are so used, are eligible for duty-free entry under subheading
9817.00.90, HTSUS.
HOLDING:
Under the authority of GRI 1, the titanium under protest is
provided for in heading 9817 as articles of metal. It is
eligible for classification in subheading 9817.00.90, HTSUS.
The protest should be ALLOWED upon satisfactory evidence of
compliance with section 54.6, Customs Regulations (19 CFR 54.6).
In accordance with Section 3A(11)(b) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, you should mail this decision, together with the
Customs Form 19, to the protestant no later than 60 days from the
date of this letter. Any reliquidation of the entry or entries
in accordance with the decision must be accomplished prior to
mailing the decision. Sixty days from the date of the decision
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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
Commercial Rulings Division