CLA-2:CO:R:C:M 956468 JAS
Thomas J. O'Donnell, Esq.
O'Donnell, Byrne & Williams
20 North Wacker Drive, Suite 3710
Chicago, ILL 60606
RE: Bar of Alloy and Nonalloy Steel; Hot-Rolled Bar Rough
Turned to Remove Scale Then Annealed; Steel Bar Not Further
Worked Than Hot-Rolled, Heading 7214; Other Bars and Rods,
Heading 7215, Heading 7228; Cold Forming, Cold Finishing;
HQ 079807, HQ 086464
Dear Mr. O'Donnell:
In your letter of May 19, 1994, on behalf of UES Sales,
Inc., you inquire as to the tariff classification of certain
alloy and nonalloy steel bar from the UK.
FACTS:
Molten alloy and nonalloy steel is cast, presumably into
billets, then hot-rolled in a primary rolling mill to sizes
ranging from 3 to 12 inches in diameter. The bars are then rough
turned to remove oxidation scale, a process which you state can
result in the removal of between 6 and 10 percent, by weight, of
the steel. You state this allows the bars to be delivered in
imperial (inches) sizes rather that metric sizes. After rough
turning the bars are annealed to bring them to their condition as
imported. You further state that bars of this type can be
manufactured in diameter increments of 1/8 inch, but they are
commonly ordered in increments of 1/4 inch. The exact diameter
increments of the bar in issue are not stated, nor is the amount
of reduction in cross-sectional area resulting from this turning
operation.
You assert that while the turning process to remove oxide
crust inevitably reduces the surface dimensions of the bar, it
does not size the bar to cold-formed or cold-finished tolerances
recognized in ASTM standards for such bar. Accordingly, you
maintain the nonalloy steel bar is provided for in various
subheadings of heading 7214 as bars not further worked than - 2 -
hot-rolled, and that the alloy steel bar is provided for in
various subheadings of heading 7228 as alloy steel bar not
further worked than hot-rolled.
The provisions under consideration are as follows:
7214 Other bars and rods of iron or nonalloy
steel, not further worked than hot-rolled:
7214.40.00 Other, containing by weight less than 0.25
percent of carbon
7214.50.00 Other, containing by weight 0.25 percent or
more but less than 0.6 percent of carbon
7214.60.00 Other, containing by weight 0.6 percent or
more of carbon
The rate of duty under these provisions is
4.7 percent ad valorem
* * * *
7215 Other bars and rods of iron or nonalloy
steel:
7215.20.00 Other, not further worked than cold-formed or
cold-finished, containing by weight less than
0.25 percent of carbon
7215.30.00 Other, not further worked than cold-formed or
cold-finished, containing by weight 0.25
percent or more but less than 0.6 percent of
carbon
7215.40.00 Other, not further worked than cold-formed or
cold-finished, containing by weight 0.6
percent or more of carbon
The rate of duty under these provisions is
7.5 percent ad valorem
* * * *
7228 Other bars and rods of other alloy steel:
7228.30 Other bars and rods, not further worked than
hot-rolled:
7228.30.80 Other...6 percent ad valorem - 3 -
7228.50 Other bars and rods, not further worked than
cold-formed or cold-finished:
7228.50.50 Other...7.5 percent ad valorem
ISSUE:
Whether mechanically removing between 6 percent to 10
percent, by weight, from the entire external surface area of
alloy and nonalloy steel bars, constitutes further working after
hot rolling; whether this turning operation is considered a cold-
forming or cold-finishing operation.
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.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the Customs Cooperation
Council's official interpretation of the Harmonized System.
While not legally binding on the contracting parties, and
therefore not dispositive, the ENs provide a commentary on the
scope of each heading of the Harmonized System and are thus
useful in ascertaining the classification of merchandise under
the System. Customs believes the notes should always be
consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23,
1989).
Relevant ENs, at p. 981, list certain surface treatments or
other operations that improve the properties or appearance of the
metal that, except as otherwise provided in the text of certain
headings, do not affect the heading in which the goods are
classified. Annealing and similar heat treatments to improve the
mechanical properties of the metal and rough turning and similar
processes to remove the oxide scale and crust formed during the
heating of the metal are among the listed surface treatments and
operations. The notes, however, differentiate rough turning from
turning, milling, grinding, perforation or punching, folding,
sizing, peeling, etc., which are forms of mechanical working
considered finishing treatments or processes for converting
finished products into other articles. ENs at p. 1002 state, in
part, that heading 7215 covers bars and rods other than those of
headings 7213 or 7214 which may be obtained by cold forming or
cold finishing. - 4 -
The terms cold-formed and cold-finished are not defined
either in the text of the HTSUS or in the ENs. The sense of the
industry in which these processes are utilized is therefore
useful in understanding of their meaning. Our understanding of
bar mill technology is that the design of the mill or the
characteristics of the steel frequently preclude the possibility
of hot rolling a bar to within precise sectional or out-of-round
limitations, or to roll a round with a surface suitable for
subsequent fabrication requirements. In such cases, bar product
is further processed in the mill's finishing department by
operations such as turning. Turning is designed to improve the
bars' surface condition by removing undesirable defects. Because
these defects appear at different places on the bars' surface,
and are at different depths, it is sometimes necessary to remove
so much metal that a product with cold worked tolerances results.
Subsequent heat treatments such bars may undergo are not usually
sufficient to affect the closer dimensional tolerances and shape
imparted by the turning.
When alloy and nonalloy steel bars are imported with
diameters expressed in 1/8 inch increments, there is the
suggestion that the turning to which they have been subjected is
designed less for removal of surface oxides than to insure
dimensional accuracy in accordance with customers'
specifications. In nearly identical circumstances under the
HTSUS predecessor tariff code, the Tariff Schedules of the United
States (TSUS), we held that turning carbon steel and alloy steel
bar to change its dimension from metric to imperial sizes is a
cold-forming or cold-finishing operation. HQ 079807, dated
January 22, 1988, aff'd. in HQ 086464, dated April 17, 1991.
HOLDING:
The nonalloy steel bars in issue are considered not further
worked than cold-formed or cold-finished, and are classifiable in
appropriate subheadings of heading 7215, depending on carbon
content. The alloy steel bars are also considered not further
worked than cold-formed or cold-finished, and are classifiable in
subheading 7228.50.50, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division