CLA-2 RR:CR:GC 964551 JAS
Port Director of Customs
Second & Chestnut Sts.
Philadelphia, PA 19106
RE: Protest 1101-00-100153; Stainless Steel Wire Rods, Shaved or Peeled
Dear Port Director:
This is our decision on Protest 1101-00-100153, filed against your classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of shaved or peeled stainless steel wire rods. The entry under protest was liquidated on June 2, 2000, and this protest timely filed on
July 18, 2000. Counsel for the protestant presented additional facts and legal arguments in a letter to you, dated November 16, 1999. These were supplemented in a letter to us, dated April 2, 2001.
FACTS:
The merchandise at issue is produced from wire rod initially hot rolled from billets. This product, typically between .240 and .870 inch in outside diameter, is then annealed and pickled. The product is then either shaved or peeled, as described, to remove surface defects and improve its dimensional regularity. Shaving involves a two-step operation. The annealed and pickled wire rod is first cold-drawn through a carbide die into what protestant describes as wire, to reduce the outside diameter by .008 to .012 inch. This imparts a rounded profile to prepare the product for shaving using a reverse conical die as a cutting tool to effectively remove a layer of metal. Peeling is referred to as a machining operation in which rotating cutting tools remove a layer of metal, typically .012 inch from the annealed and pickled wire rod’s outside diameter. An abrasive belt then grinds the rod to eliminate surface defects and an imperfect profile.
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The merchandise was entered under a provision of heading 7223, HTSUS, for wire of stainless steel. Your office determined that the processing of the wire rod, as described, did not change its characteristics, but that the shaving or peeling were cold finished operations. The entry was liquidated under a provision of heading 7222, HTSUS, for bars and rods, not further worked than cold-formed or cold-finished. On protest, counsel again asserts the heading 7223 classification, noting that the shaved product, at least, results from a cold-forming operation and meets a recognized American Society for Testing and Materials (ASTM) standard for wire. Counsel also asserts that the shaving and peeling of stainless steel wire rod both accomplish identical goals, i.e., the mechanical removal of metal to eliminate defects resulting from hot-rolling. The conclusion is that in use and application the peeled product is regarded commercially as a wire product and should be classified in the same provision as the shaved product. However, counsel agrees that if heading 7223, HTSUS, is found not to apply, then subheading 7222.20.00, HTSUS, represents the proper classification. Counsel argues, however, that in no event does either the shaved or peeled product qualify as hot-rolled bars and rod of stainless steel.
The HTSUS provisions under consideration are as follows:
7221.00.00 Bars and rods, hot-rolled, in irregularly wound coils, of stainless steel
* * * *
7222 Other bars and rods of stainless steel…:
7222.20.00 Bars and rods, not further worked than cold-formed or cold-finished
* * * *
Wire of stainless steel
7223.00.10 Round wire
ISSUE:
Whether shaving or peeling of stainless steel wire rod, as described, results in a product classifiable as wire.
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LAW AND ANALYSIS:
Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified 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 at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Chapter 72, Note 1(m), HTSUS, in part, defines Other bars and rods as products that do not conform to the definition for hot-rolled bars and rods or to the definition for wire and which have a uniform solid cross section along their whole length in the shape of circles, segments of circles or ovals. Chapter 72, Note 1(o), HTSUS, in part defines Wire as cold-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products (in Note 1(k)).
The 72.17 ENs, wire of iron or non-alloy steel, apply by appropriate substitution of terms, to the products of heading 7223, wire of stainless steel. On p. 1090, these ENs state that wire is mostly produced from hot-rolled bars and rods of heading 72.13 by drawing them through a die but may also be obtained by any other cold-forming process (e.g., cold-rolling).
It is clear that shaving and peeling are forms of cold-working that preclude the hot-rolled provisions of heading 7221, HTSUS, from applying. The question is whether the products at issue are “cold-formed” for purposes of heading 7223. The 72.17 ENs cite (cold) drawing and cold-rolling as examples of cold-forming wire products. These involve realigning the cross sectional area of the metal or moving metal around, rather than removing metal. The shaving operation first involves a drawing of the product, but then a reverse conical die removes portions of metal to provide a uniform surface free of defects. The peeling operation involves the use of a rotating cutting tool followed by grinding, both of which involve removing metal. Shaving and peeling operations, as described, are akin to sizing, turning or centerless grinding, which are finishing operations designed to impart moderate reduction in cross section or improve out-of-roundness to a bar or rod product. Counsel cites ASTM designation A 555/A555M – 94a, General Requirements for Stainless Steel Wire and Wire Rods, which, in part, defines wire as any round or shaped cold-reduced product, in coils only, produced by cold-finishing coiled wire rod. To the extend this designation does not describe a
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product produced by a cold-forming operation, it is inconclusive as authority for identifying the merchandise at issue as a wire product of heading 7223. The shaving and peeling, as described, are operations designed to remove metal. As they are not cold-forming operations as described in the cited ENs, the products produced by these operations cannot be classified as wire.
HOLDING:
Under the authority of GRI 1, the shaved or peeled stainless steel wire rod is provided for in heading 7222. It is classifiable in subheading 7222.20.00, HTSUS.
The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to 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 the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division