CLA-2:CO:R:C:M 951620 JAS
District Director of Customs
Patrick V. McNamara Bldg.
477 Michigan Avenue
Detroit, Michigan 48266
RE: Circular and Octagonal Steel Blanks; Steel Circles;
Wheel Discs; Unfinished Car Wheels; Fabricated Component;
Automotive Products Trade Act of 1965 (APTA); Other Parts
of Motor Vehicles; Heading 8708; Flat-Rolled Products of
Iron or Nonalloy Steel; Heading 7208; PRD 3801-89-002171
Dear Sir:
This is our decision on Application for Further Review of Protest No. 3801-89-002171, dated July 12, 1989, filed on behalf of Motor Wheel Corporation, against your action in liquidating multiple entries of steel wheel blanks.
FACTS:
No samples or descriptive literature were submitted with the protest. The imported merchandise is identified on the Customs Form 6445 as circular steel blanks. Protestant indicates that octagonal blanks are also involved. These articles of nonalloy steel are imported for fabrication into automotive wheel discs. The process involves pressing blanks out of coils of SAE 1015 steel by an automated cookie cutter process. This type steel is claimed to provide the tensile and yield strength required for wheel disc manufacture.
Each blank is die sunk with an identifying part number designating a specific wheel for a particular automobile. One such octagonal blank, cited as an example, has a listed thickness of 0.190 inch with a variance of +.010 and -0. The minimum dimension of this blank must be 16.410 x 15.280 inches with no deviations. This is the condition of the merchandise as imported. - 2 -
After importation, the wheel blanks are formed either automatically on a transfer press or manually on single station presses. This process involves drawing the blank by elongating the center portion to form a mound. The center is then reversed in a process designed to strengthen the steel. Forming presses then shape the pockets, bolt hole mounting pads and other specific features necessary to achieve a specific design. The diameter of each blank is then trimmed and the outer edge is turned under to form a rim. The vents or windows and center hole are then punched. This completes the wheel disc.
Thereafter, each disc is press fit into the wheel rim, which has been created by a separate process, to make an automotive wheel. In two cited examples, the value added by the processing in the United States is 26 percent and 44 percent, respectively of the value of the finished articles.
Protestant maintains that, as imported, the wheel discs have been processed beyond the stage of materials and are fabricated components intended for use as original equipment in the manufacture in the United States of a motor vehicle. Despite the substantial further processing required after importation, it is claimed the wheel blanks have been processed to a point where they have characteristics which identify them as automotive components.
For purposes of classification, protestant maintains that the merchandise is a blank having the essential character of a finished automotive component. It is therefore an unfinished article under General Rule of Interpretation 2(a), Harmonized Tariff Schedule of the United States (HTSUS). Subheading 8708.70.80, HTSUS, a provision for road wheels and parts and accessories thereof, for vehicles other than tractors, is the primary claim. An alternative claim is made under subheading 8708.99.50, a provision for other parts of motor vehicles. Both provisions are duty-free under APTA.
Based on Customs Forms 6431 on similar merchandise, you liquidated the entries under subheading 7208.90.00, HTSUS, a provision for other flat-rolled products of a width of 600 mm or more, of iron or nonalloy steel.
ISSUE:
Whether the merchandise, as imported, is a blank under GRI 2(a), HTSUS, and therefore an unfinished article for tariff purposes. - 3 -
LAW AND ANALYSIS:
Flat-rolled products of heading 7208 are rolled products of solid rectangular (other than square) cross section, which are not semifinished products for tariff purposes. This heading
includes flat-rolled products of a shape other than rectangular or square, of any size, provided they do not assume the character of articles of other headings. Therefore, circular and octagonal articles are encompassed by heading 7208, if otherwise qualified.
GRI 2(a), HTSUS, states in part that any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article.
The provisions of Rule 2(a) apply to the imported merchandise if they qualify as blanks. The Harmonized Commodity Description and Coding System Explanatory Notes (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:
(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 address 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.
The precise external specifications of the wheel blanks is an indication that they will be used principally, if not solely, for completion into automotive wheel discs. However, even after the post-importation trimming of the discs' circumference, the same circular or octagonal shape may be used to make a variety of articles for which SAE 1015 steel is suitable. It is only after - 4 -
each wheel blank is drawn and reversed, and the pockets, bolt hole mounting pads, vents or windows imparted by one or more forming processes, and the center hole punched, that the shape or outline of the finished wheel disc can be seen.
As imported, therefore, these discs have neither the form nor the shape nor any visually apparent characteristic of the specific part or component they will be when finished. These discs are semi-manufactures the equivalent of bars, discs, tubes, etc., which the ENs indicate are not "blanks" for tariff purposes.
HOLDING:
The circular and octagonal wheel blanks in issue are not blanks for tariff purposes and, therefore, not unfinished articles of heading 8708.
The protest should be denied. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant, in care of his counsel, as part of the notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division