CLA-2 CO:R:C:G 086289 CMS
9802.00.60
RE: Steel Tubular Arms For Power Transmission Towers
Dear ,
This responds to your request dated September 26, 1989,
supplemented November 15, 1989, on behalf of
, for a binding classification
ruling on certain steel arms for power transmission towers
imported from Mexico. The matter was referred to Customs
Headquarters by the Regional Commissioner of Customs, New York
Region. You advised by telephone on March 2, 1990 followed up by
facsimile transmission on March 7, 1990 that the grinding
operations are limited to the grinding of bracket edges. Our
ruling follows.
FACTS:
The merchandise consists of steel tubular arms for electric
power transmission towers. Steel plates of U.S. manufacture are
exported to Mexico where they are processed into eight sided
tapered arms ranging in length from 4' to 15', in width from 3"
to 6 1/4", and in thickness from 1/4" to 5/16". Brackets are
welded onto the arms for the purpose of mating the arms to the
vertical power transmission tower pole(s), and for the attachment
of insulated lines and electric wires to the arms.
After their export to the United States, the arms are
subjected to one or more of the following operations:
1) hot-dip galvanizing or electro-galvanizing,
2) grinding of bracket edges,
3) deburring.
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ISSUES:
1) Are the steel arms classified in Heading 7308 as parts
of structures, or in Heading 7306 as pipes, tubes and hollow
profiles?
2) Which of the three post-import operations satisfy the
"further processing" requirement of subheading 9802.00.60?
LAW AND ANALYSIS:
Classification
The steel arms in their condition as imported are dedicated
to use as arms for electrical power transmission towers. The
arms have welded brackets designed to support insulating lines
and electric wires. The arms are manufactured to the proper
length and have a larger end designed for the mating of the arms
to the vertical tower pole(s). The arms are specifically
identifiable as parts of power transmission towers classified in
Heading 7308. The arms are much more advanced than the "tubes,
pipes and hollow profiles" classified in Heading 7306 and thus
cannot be classified there.
The importer takes the position that the arms are
classifiable in subheading 7306.30.30, which describes tapered
steel pipes and tubes principally used as parts of illuminating
articles. Even if the arms were in a class of articles
specifically identifiable as parts of illuminating articles they
would not be classifiable in this subheading; in order to fall in
subheading 7306.30.30 the arms must first satisfy the criteria
for Heading 7306. The Explanatory Notes to Heading 7306, p.
1018, provide that "[t]his heading excludes: ...[t]ubes, pipes
and hollow profiles made up into specific identifiable
articles...". As determined above, the arms are specific
identifiable articles. They are excluded from Heading 7306 and
thus are not classifiable in subheading 7306.30.30. The arms are
classified in subheading 7308.90.90.
Hawthorne v. United States, 572 F. Supp. 1279 (1279), rev'd.
730 F. 2d 1490, a TSUS decision brought to our attention in the
ruling request is inapposite. The arms under consideration do
not fall within the class or kind of merchandise at issue in
Hawthorne. The Hawthorne "class" consisted of articles chiefly
used as parts of illuminating articles; the instant "class"
consists of articles principally used as parts of power
transmission towers.
Further, the Hawthorne masts in their condition as imported
required substantial manufacturing including cutting the masts to
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proper length, squaring the ends and attaching plates and clamps;
the arms under consideration at the time of import have undergone
all significant manufacturing except galvanizing. On appeal, the
Hawthorne articles were found to be parts of illuminating
articles under the TSUS; since the instant articles are more
advanced than the Hawthorne articles, Hawthorne lends no support
to the position that the instant articles are less than parts of
power transmission towers classifiable in Heading 7308.
Applicability Of HTSUSA Subheading 9802.00.60
HTSUSA subheading 9802.00.60 provides a partial duty
exemption for:
[a]ny article of metal (as defined in U.S. note 3(d)
of this subchapter) manufactured in the United States
or subjected to a process of manufacture in the United
States, if exported for further processing, and if the
exported article as processed outside the United
States, or the article which results from the
processing outside the United States, is returned to
the United States for further processing.
This tariff provision imposes a dual "further processing"
requirement on qualifying metal articles: one foreign, and when
returned, one domestic. More specifically, "'further' processing
has reference to processing that changes the shape of the metal
or imparts new and different characteristics which become an
integral part of the metal itself and which did not exist in the
metal before processing; thus, further processing includes
machining, grinding, drilling, threading, punching, forming,
plating, and the like, but does not include painting or the mere
assembly of finished parts by bolting, welding, etc.". C.S.D.
84-49, November 15, 1983.
However, not all "processing" to which articles of metal can
be subjected are significant enough to qualify as "further
processing" within the purview of subheading 9802.00.60. To
satisfy the "further processing" requirement, an article must be
subjected to a further manufacturing process. Intelex Systems,
Inc. v. United States, 59 CCPA 138, C.A.D. 1055, 460 F.2d 1083
(1972), aff'g, 65 Cust. Ct. 306, C.D. 4093, 318 F. Supp. 515
(1970). The Court in that case stated that it did "...not
think that processes to which an already completed article is
subjected, incident to using it for the purpose intended, are
necessarily part and parcel of manufacturing processes performed
on that article." 59 CCPA at 141. (Court's emphasis).
Thus, we have held that operations performed on otherwise
finished studs incident to utilizing them at a building site
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do not constitute "further processing". HQ Ruling 555001
(December 16, 1988). Similarly, welding performed in the
assembly of imported parts does not constitute "further
processing" under subheading 9802.00.60. HQ Ruling 025776
(February 14, 1973); C.S.D. 84-49.
Hot-Dip Galvanizing and Electro-Galvanizing. Hot-dip
galvanizing or electro-galvanizing are operations which satisfy
the "further processing" requirement of subheading 9802.00.60.
HQ Ruling 555001 (December 16, 1988); HQ Ruling 067675 (February
12, 1982).
Grinding Bracket Edges. The grinding down of edges is a
limited operation which does not constitute "further processing"
for these steel arms. The removal of material to make rough
edges smooth does not significantly change the shape of the arms.
The radius formed by the grinding does not impart any new
characteristics to the arms. Prior to the grinding the arms are
completed articles under Intelex Systems, Inc., supra.
Deburring. The deburring of protruding metal burrs does not
constitute "further processing" for these steel arms. The
removal of protruding burrs does not change the shape or impart
new characteristics to steel arms 4' to 15' in length. Prior to
the deburring the arms are completed articles under Intelex
Systems, Inc., supra.
HOLDING:
The steel arms are classified in subheading 7308.90.90.
The hot-dip or electro-galvanizing performed on the arms after
their export to the United States constitutes "further
processing" which qualifies the arms for the duty treatment of
subheading 9802.00.60. The grinding of bracket edges and
deburring performed after export to the United States do not
constitute "further processing" under subheading 9802.00.60.
Sincerely,
John Durant, Director
Commercial Rulings Division