CLA-2 RR:TC:MM 958806 JAS
Port Director of Customs
200 Granby Street
Norfolk, VA 23510
RE: PRD 1401-95-100253; Titanium Ingots, Unwrought Titanium;
Heading 8108, Section XV, Additional U.S. Note 1; Remelt
Scrap Ingots, Defective or Damaged Ingots, Subheading
9817.00.90; Chapter 98, U.S. Note 1
Dear Port Director:
This is our decision on Protest 1401-95-100253, filed
against your classification of titanium ingots made in Russia.
The entries were liquidated on August 25 and September 15, 1995,
and this protest timely filed on October 26, 1995. Counsel for
the protestant made supplemental submissions dated June 17 and
July 11, 1996.
FACTS:
The merchandise is referred to variously as bulk weldable
titanium, unwrought titanium, titanium ingots or scrap titanium
ingots. A purchase order describes the ingots as 11 inches in
diameter, either 30 or 86 inches long, and weighing between 300-400 lbs. Counsel describes the merchandise as remelt scrap
ingots or as bulk weldable scrap, a term by which they are said
to be known in the industry. Counsel maintains the merchandise
is defective titanium ingots produced from reverted scrap. It
includes tungsten carbide fragments and other refractory
particles called "inclusions" which can only be eliminated by
further remelting and refining. After importation, these ingots
are welded to other titanium pieces of the same grade and melted
in a vacuum arc furnace. The product is said to be remelted two
(2) times for standard quality applications and three (3) times
for critical quality applications such as the aircraft industry.
Remelt certificates for the merchandise under protest were
provided for our examination. - 2 -
The titanium was entered under a duty-free provision in
heading 8108, Harmonized Tariff Schedule of the United States
(HTSUS), for titanium waste and scrap. Your office determined
that ingots are other forms of unwrought titanium and liquidated
the entries under the appropriate provision in heading 8108.
Counsel now claims the merchandise is eligible for duty-free
entry under subheading 9817.00.90, HTSUS, as unwrought metal in
ingot form which is defective or damaged.
The provisions under consideration are as follows:
8108 Titanium and articles thereof, including waste and scrap:
8108.10 Unwrought titanium; waste and scrap; powders:
8108.10.10 Waste and scrap...Free
8108.10.50 Other...15 percent ad valorem
* * * *
Unwrought metal including remelt scrap
ingot...in the form of ingots...which are
defective or damaged, or have been produced from melted down metal waste and scrap for
convenience in handling and transportation without sweetening, alloying, fluxing or
deliberate purifying, and which cannot be
commercially used without remanufacture...;
Articles of metal (...not including unwrought
metal provided for in chapters 72-81) to be
used in remanufacture by melting...:
9817.00.90 Other...Free
ISSUE:
Whether the titanium ingots are unwrought metal in ingot
form which are damaged or defective for purposes of subheading
9817.00.90.
- 3 -
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.
Initially, for purposes of chapters 72 through 83, Section
XV, Additional U.S. Note 1, HTSUS, defines the term "unwrought"
as refer[ring] to metal, whether or not refined, in the form of
ingots, among other similar manufactured primary forms, but does
not cover rolled, forged, drawn or extruded products, tubular
products or cast or sintered forms which have been machined or
processed otherwise than by simple trimming, scalping or
descaling. In a letter dated July 11, 1996, counsel confirmed
that the merchandise under protest is, in fact, unwrought for
tariff purposes.
Pursuant to Chapter 98, U.S. Note 1, HTSUS, even if the
merchandise is unwrought titanium of heading 8108 or is
classifiable elsewhere in HTS chapters 1 through 97, if it is an
article described in any provision in chapter 98 it is
classifiable in said provision if the conditions and requirements
thereof and of any applicable regulations are met.
Subheading 9817.00.90 describes three types of goods:
(1) Unwrought metal including remelt scrap ingot (except copper, lead, zinc and tungsten) in the form of pigs, ingots, or billets
(a) which are defective or damaged, or have been
produced from melted down metal waste and scrap
for convenience in handling and transportation
without sweetening, alloying, fluxing or
deliberate purifying, and
(b) which cannot be commercially used without
remanufacture;
(2) relaying or rerolling rails; and,
- 4 -
(3) articles of metal (except articles of lead, or zinc or
of tungsten, and not including metal-bearing materials
provided for in section VI, chapter 26 or subheading
8548.10 and not including unwrought metal provided for
in chapters 72-81) to be used in remanufacture by
melting or to be processed by shredding, shearing,
compacting, or similar processing which renders the
fit only for the recovery of the metal content.
The ingots in issue here are unwrought for tariff purposes. They
are not type (2) relaying or rerolling rails, nor are they type
(3) articles of metal, because unwrought metal of chapters 72-81
is excluded. The issue, then, is whether the ingots are type (1)
forms of unwrought metal. The terms defective and damaged are
not defined in the heading 9817.00.70 text, nor is there any
available legislative history on the scope of the terms. In
common meaning, however, the terms are quite broad and embrace
any kind of imperfection, or the lack of an element that impairs
usefulness or is necessary to a thing's completeness, whether in
terms of physical appearance, structure or quality.
Conventional titanium ingots range from 28-36 inches in
diameter and weigh from 7,000-15,000 lbs. The ingots under
protest are significantly smaller in physical dimensions and
lighter in weight. In addition, despite the fact these ingots
were ordered to specific chemistry, they contained significant
amounts of tungsten carbides and other refractory particles
called inclusions. These are objectionable and must be removed
to render the product commercially useful. Only after these
inclusions are removed by remelting is the product recast as
chemically certified prime ingot and made suitable for eventual
processing into bar and ultimately into forged products requiring
the highest quality standards, such as aircraft parts. The
evidence here suggests that the titanium ingots here are damaged
or defective for tariff purposes, and are of the type that cannot
be commercially used without remanufacture.
HOLDING:
Under the authority of GRI 1, the titanium ingots in issue
here are provided for in heading 9817. They are classifiable in
subheading 9817.00.90, HTSUS.
The protest should be ALLOWED. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4,
1993, Subject: Revised Protest Directive, you should mail this
decision, together with the Customs Form 19, to the protestant no
later than 60 days from the date of this letter. Any - 5 -
reliquidation of the entry or entries in accordance with the
decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision the Office of
Regulations and Rulings will take steps to make the decision
available to Customs personnel via the Customs Rulings Module in
ACS and to the public via the Diskette Subscription Service, the
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division