DRA-4 CO:R:C:E 224702 TLS
Mr. Herbert E. Harris II
Harris & Ellsworth
2600 Virginia Avenue, N.W. Suite 1113
Washington, D.C. 20037-1905
RE: Ruling request on the fungibility of different sizes of wire
rope; same condition substitution drawback; 19 U.S.C. 1313(j)(2);
19 CFR 191.2.
Dear Mr. Harris:
This office has received the above-referenced request for a
ruling as provided for under Customs regulations. We have
considered the request and made the following decision.
FACTS:
Your client manufactures wire rope in different sizes. The
wire rope is manufactured using carbon steel wire woven into
strands which are then wound around a core wire. The same type
of steel and grade of steel are used in every instance for a
particular type of wire rope. The core may consist of steel or
fibers. The steel cores may be either a single strand or an
independent wire rope (IWRC).
The wire rope comes in different sizes, according to how
many wires are used to produce a strand and how many strands are
wound around a core. Strands are produced using either a tubular
strander or planetary strander. The strands are wound around the
core in a similar fashion, respectively. The completed wire
ropes are distinguishable by diameter, the number and
construction of strands, the grade and type of steel, and the
kind of core.
You have described the four classifications of wire rope at
issue here in the following fashion:
Nominal
Classification
6X7
6X19
6X37
8X19
Description
Contains 6 strands, each of
which is made up of from 3 to
14 wires, of which no more
than 9 are outside wires.
Contains 6 strands, each of
which is made up of from 15
through 26 wires, which no
more than 12 are outside
wires.
Contains 6 strands, each of
which is made up of from 27
through 49 wires, of which no
more than 18 are outside
wires.
Contains 8 strands, each of
which is made up of from 15
through 26 wires, of which no
more than 12 are outside
wires.
In the commercial setting, wire ropes are identified by the
following nomenclature:
An example: 3/4" 6x19 FW IPS IWRC. This describes a
wire rope that is 3/4 inches in diameter, with six
strands of 19 wires per strand of filler wire
construction. The grade of steel is improved plow
steel (IPS). The strands are closed around an
independent wire rope core (IWRC). The "6x19"
designation may encompass different constructions of
wire rope; for instance, 6x21 and 6x26 may also be
found under the 6x19 designation. Regardless of the
number of wires per strand, each wire rope under a
particular designation have the same nominal strength
and weight per foot, and are sold at the same price.
See American Iron and Steel Institute, Wire Rope Users
Manual 2d ed. (1981).
This request is being made for a determination of fungibility on
the four different nominal classifications as described above
(also termed as "designations" herein) for the purposes of
substitution same condition drawback.
ISSUE:
Whether improved wire rope of the same nominal
classification, or designation, is fungible with its domestic
counterpart.
LAW AND ANALYSIS:
The importer seeks to have the importations of wire rope
ruled eligible for substitution same-condition drawback under 19
U.S.C. 1313(j)(2), which provides that:
If there is, with respect to imported merchandise on
which was paid any duty, tax, or fee imposed under
Federal law because of its importation, any other
merchandise (whether imported or domestic) that-
(A) Is fungible with such imported merchandise;
(B) Is, before the close of three-year period beginning
on the date of importation of the imported merchandise,
either exported or destroyed under Customs supervision;
(C) Before such exportation or destruction-
(i) Is not used within the United States, and
(ii) Is in the possession of the party claiming
drawback under this paragraph; and
(D) Is in the same condition at the time of exportation
or destruction as was the imported merchandise at the
time of its importation;
then upon the exportation or destruction of such other
merchandise the amount of each such, duty, tax, and fee
paid regarding the imported merchandise shall be
refunded as drawback, but in no case may the total
drawback on the imported merchandise, whether available
under this paragraph or any other provision of law or
any combination thereof, exceed 99% of that duty, tax,
or fee. (Emphasis added.)
Under 19 CFR 191.2(k)(1), "fungible merchandise" is defined
as "merchandise which for commercial purposes is identical and
interchangeable in all situations." See also Guess? Inc. v.
United States, 752 F. Supp. 463, 14 CIT 770 (1990). Whether
merchandise is identical and interchangeable in all situations
hinges upon how merchants, consumers, wholesalers, etc., respond
to a certain item vis-a-vis another in the marketplace. See
Guess? Inc., supra, and cases cited therein. You have noted that
the industry standards allow for varying numbers of wires per
strand within a particular designation and that such would not
preclude the wire rope from being bought and sold at the same
price. The nominal strength, weight per foot, and price of wire
rope is said to be the same within the particular nominal
classification even if the number of wires per strand vary. See
Wire Rope Users Manual, supra. We recognize here, as we have
done in previous rulings, that industry standards are useful as
guidelines for determining fungibility. See, e.g., Customs
ruling HQ 219181 (June 6, 1989).
Documentation has been submitted that shows customer
preference to be for a particular nominal classification of wire
rope and nothing beyond that. These documents consist of several
copies of purchase orders for wire rope of different dimensions.
The purchase orders note the nominal classification for each size
of wire rope ordered and the price for each. In each case, the
wire rope is specified only to the extent of its nominal
classification and model number; no further specificity is noted.
This is true even though, as noted above, the number of wires per
strand within a particular nominal classification may differ from
rope to rope.
In this instance, Exhibit 6 shows an order of 6x19 wire rope
with a 7/8" diameter with 25 wires per strand. Exhibit 7 shows
an order of wire rope with the same dimensions but with 26 wires
per strand. The price for each is recorded as $1.48 (our office
has been informed through telephone conversation between you and
Tony Shurn of this office that the price is for a "per foot"
measurement).
We also note that your various submissions to us indicate
that there may be wire ropes within a particular classification
that may be further distinguished by what type of core is used
(steel or fiber), the type of "lay" it has (right regular lay
[RRL], left regular lay [LRL], right lang lay [RLL], or left lang
lay [LLL]), the type of steel used (plow or otherwise), how the
steel is processed (uncoated or galvanized), and diameter of the
rope. Fiber cores are more flexible than steel cores. Regular
lays are stated to be more stable and resistant to crushing while
lang lays are more fatigue and abrasion resistant. Whether a
rope is a right or left lay is of no consequence. Galvanized
steel is more corrosion resistant. It has been noted that the
vast majority of wire ropes manufactured are of standard
construction; this ruling will apply only to such wire rope and
not to non-standard constructions.
Based on this evidence, we find that your claim of
fungibility of wire rope of different numbers of wires per strand
within a nominal classification to be valid. We find that wire
ropes of standard construction within a particular nominal
classification with the same lay (regular or lang), same type of
core, and same type of steel are fungible.
HOLDING:
The wire rope at issue here is fungible on a nominal
classification basis when they are of standard construction, have
the same lay (regular or lang, regardless of whether left or
right), same type of core, same type of steel (plow or
otherwise), the steel is processed the same (galvanized or non-galvanized), and the diameter of the rope is the same. This is
true even of ropes within a classification that differ in the
number of wires per strand. This ruling is based upon the
evidence provided under cover letters of November 17 and 24,
1993, and December 2, 1993.
Sincerely,
John Durant, Director
Commercial Rulings Division