CLA-2 CO:R:C:M 956655 KCC
Evelyn M. Suarez, Esq.
Ross & Hardies
888 Sixteenth Street, N.W.
Washington, D.C. 20006-4103
RE: Titanium scrap fines; waste and scrap; Note 6(a), Section
XV; Additional U.S. Note 2, Section XV; unwrought; sponge;
EN 81.08; ASTM specifications; HRL 951568 and 951469; Nippon
Kogasku (USA), Inc. v. U.S.; C.J. Tower & Sons v. U.S.;
Royal Business Machines, Inc., et al v. U.S.
Dear Ms. Suarez:
This is in response to your letter dated June 14, 1994, to
the Area Director, New York Seaport, on behalf of Specialty
Metallurgical Products Co., Inc., regarding the tariff
classification of titanium scrap fines under the Harmonized
Tariff Schedule of the United States (HTSUS). Information
presented at a meeting on September 20, and in an additional
submission dated November 3, 1994, was taken into consideration
in rendering this decision.
FACTS:
The subject merchandise is described as titanium scrap fines
(TSFs) from Russia. The TSFs are imported as minute pieces of
powder or residue, referred to as fines, or the fines are
compressed into briquettes. The TSFs are used as an alloy in
aluminum products primarily sold to the automotive industry. You
state that the TSF's are the waste material resultant from the
manufacture of titanium sponge.
The production of titanium sponge involves a process of
chlorination and reduction of titanium concentrates (ilmenite or
rutile). The concentrates react with chlorine gas and coke in a
fluidized-bed reactor to form impure titanium tetrachloride,
sometimes referred to as "tickle." The titanium tetrachloride is
then combined with magnesium, known as the Kroll process, to form
titanium sponge and a chloride salt. The salt and residual
magnesium or sodium metal must then be separated from the
titanium sponge in a purification process.
The titanium assumes the form of cake, which is in the shape
of the vessel or crucible in which the reaction took place. The
basic Kroll process results in the purest parts forming at the
center with a higher concentration of impurities forming near the
reactor pot walls. The cake is then divided into fractions. The
portion of the cake nearest the walls, which has the highest
concentration of impurities is the source of the TSFs.
You state that the TSFs are not classifiable as titanium
sponge because they do not meet the American Society for Testing
Materials (ASTM) standards (ASTM B-299-92) for titanium sponge
and, therefore, the TSFs are not useable as titanium sponge.
ASTM titanium sponge is used to produce titanium mill products in
jet airframes and engines, ballistic missiles, deep diving
undersea vehicles and in chemical processing, waste water
treatment and other industrial equipment.
You state that the differences between ASTM titanium sponge
and TSFs are as follows:
ASTM Sponge TSFs
purity: 99.3% 99%
shape: irregular lumps fines or briquettes
size: ò12 mm ó12 mm, often ó2 mm
hardness: 90 out of 120 (Brinell) none
Additionally, ASTM titanium sponge has specific requirements for
levels of impurities for iron, chlorine, nitrogen, silicon,
nickel, carbon and oxygen, and the TSFs have requirements for the
level of impurities for iron, oxygen and nitrogen.
The competing subheadings are as follows:
8108 Titanium and articles thereof, including waste and
scrap...Unwrought titanium; waste and scrap; powders...
8108.10.10 Waste and scrap.
8108.10.50 Other....
8108.10.5010 Sponge.
ISSUE:
Are the titanium scrape fines classified as titanium waste
and scrap under subheading 8108.10.10, HTSUS, or as other
unwrought titanium, sponge under subheading 8108.10.50, HTSUS?
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1,
HTSUS, 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...."
Heading 8108, HTSUS, falls within Section XV, making the
Section XV notes applicable to the tariff classification of the
TSFs. Note 6, Section XV, HTSUS, states that "[i]n this section,
the following expressions have the meanings hereby assigned to
them:
(a) Waste and scrap
Metal waste and scrap from the manufacture or mechanical
working of metals, and metal goods definitely not usable as
such because of breakage, cutting-up, wear or other
reasons."
Additional U.S. Note 2, Section XV, HTSUS, states:
For the purposes of this section, the term "unwrought"
refers to metal, whether or not refined, in the form of
ingots, blocks, lumps, billets, cakes, slabs, pigs,
cathodes, anodes, briquettes, cubes, sticks, grains, sponge,
pellets, flattened pellets, rounds, rondelles, shot and
similar manufactured primary forms....
The TSFs in this case are unwrought titanium because they
are either imported in the form of grains or fines, or in
briquettes. We must determine whether the TSFs are "waste and
scrap" or "sponge" for tariff classification purposes. In
understanding the language of the HTSUS, the Harmonized Commodity
Description and Coding System ENs may be utilized. The ENs,
although not dispositive, provide a commentary on the scope of
each heading of the HTSUS and are generally indicative of the
proper interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg.
35127, 35128 (August 23, 1989). EN 81.08 (pgs. 1095-1096),
states that:
Titanium is obtained by reduction of the oxide ore rutile
and brookite, and from ilmenite (titaniferous iron ore).
According to the process used, the metal may be obtained in
compact form, as a powder for sintering (as in the case of
tungsten), as ferro-titanium (Chapter 72) or as titanium
carbide....
...the metal is also alloyed with aluminum, copper, nickel,
etc.
Titanium is principally used in the aircraft industry, in
shipbuilding, for making, e.g., vats, agitators, heat
exchangers, valves and pumps for the chemical industry, for
the desalination of seawater and for the construction of
nuclear power stations.
This heading covers titanium in all forms: in particular
sponge, ingots, powder, anodes, bars and rods, sheets and
plates, waste and scrap....
EN 81.08 does not provide a more detailed discussion of titanium
waste and scrap. We note that other ENs for base metals provide
further guidance regarding a description of waste and scrap for
those particular headings. Additionally, the ENs often do not
repeat the same information for each heading, but they use the
term mutatis mutandis to indicate that previous information
applies to the heading at issue. EN 81.08 does not use mutatis
mutandis to refer back to a previous base metal EN for
information regarding the classification of titanium waste and
scrap. Without further guidance regarding titanium waste and
scrap from the ENs, we apply the definition of waste and scrap in
Note 6(a), Section XV, HTSUS.
We are of the opinion that the TSFs are not waste and scrap
for tariff classification purposes, but are classified under
subheading 8108.10.50, HTSUS, as other unwrought titanium,
sponge. Sponge is not defined in the HTSUS or ENs. In the
absence of any guidance in the Explanatory Notes, it is proper to
use the principal that tariff terms are construed in accordance
with their common and commercial meaning. Nippon Kogasku (USA),
Inc. v. United States 69 CCPA 89, 673 F.2d 380 (1982). Common
and commercial meaning may be determined by consulting
dictionaries, lexicons, scientific authorities and other reliable
sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673
F.2d 1268 (1982). As it relates to metals, sponge is defined as:
A form of metal characterized by a porous condition which is
the result of the decomposition or reduction of a compound
without fusion. The term is applied to forms of iron, the
platinum-group metals, titanium and zirconium.
Vol. 1, pg. 35, Metals Handbook, 8th Ed., American Society for
Metals (1961). The TSFs conform with this definition of sponge.
Sponge has very distinctive characteristics. Therefore, we
are of the opinion that upon examination, if it is determined
that the product is titanium and has the characteristics of
sponge, it will be classified as other unwrought titanium, sponge
under subheading 8108.10.50, HTSUS. There is no distinction
between ASTM titanium sponge and other unwrought titanium sponge
for tariff classification purposes. There is no indication that
the tariff intended any other meaning than the ordinary meaning
for the term "sponge", and we see no reason to require that
titanium sponge conform to a particular industry standard in
order for it to be classified in the provision for unwrought
titanium, sponge. See also, Headquarters Ruling Letter (HRL)
951568 dated July 27, 1992, which held that molybdenum bars ends
were not classified as molybdenum waste and scrap, even though
they did not meet the ASTM standards for molybdenum bars.
You contend that the TSFs are the waste product from the
manufacture of titanium sponge. We do not agree with his
ascertion. Although the TSFs are a by-product from the
manufacture of ASTM titanium sponge, we believe that the TSFs are
a product in and of itself. This other titanium sponge is in
fact a product used in a manner similar to ASTM titanium sponge.
Like ASTM titanium sponge, the other titanium sponge is melted
and alloyed with other materials. It is used in the aluminum
industry, not the aerospace industry. Although ASTM titanium
sponge and other titanium sponge are used for different purposes,
they are both products derived from the manufacture of titanium
as described in EN 81.08. We are of the opinion that the TSFs do
not meet the definition of waste and scrape in Note 6(a), Section
XV, HTSUS, and, therefore, are classified as other unwrought
titanium, sponge under subheading 8108.10.50, HTSUS. See, HRL
951469 dated July 21, 1992, which classified titanium scrap fines
in the form of briquettes under subheading 8108.10.50, HTSUS.
The Customs Service is the administrative agency which has
been designated to administer the HTSUS. Therefore, the
classification of imported merchandise is a matter properly
determined by this agency. The determination of whether specific
merchandise is subject to antidumping duties is within the
purview of the International Trade Administration (ITA), U.S.
Department of Commerce. The Court of International Trade has
stated:
The Court distinguishes between the authority of the Customs
Service to classify according to tariff classifications (19
U.S.C. 1500) and the power of the agencies administering the
antidumping law to determine a class or kind of merchandise.
The determinations under the antidumping law may properly
result in the creation of classes which do not correspond to
classification found in the tariff schedules or may define
or modify a known classification in a manner not
contemplated or desired by the Customs Service.
Royal Business Machines, Inc., et al v. U.S., 1 CIT 80, 87
(1980), 507 F.Supp. 1007, aff'd 669 F.2d 692 (1982). Thus, the
Commerce Department's antidumping scope determination applies to
the merchandise named in that determination regardless of where
Customs classifies that merchandise. Therefore, the rational
stated in the final scope ruling excluding certain compacted
titanium scrap fines from the Antidumping Duty Order on Titanium
Sponge from the U.S.S.R. (A-461-008) is not determinative as to
the classification of the TSFs at issue in this case.
HOLDING:
The titanium scrap fines are classified as other unwrought
titanium, sponge under subheading 8108.10.50, HTSUS. The
corresponding duty rate for articles of this subheading is 15
percent ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division