CLA-2 RR:TC:MM 958998 JAS
Port Director of Customs
610 S. Canal Street
Chicago, IL 60607
RE: IA 62/95; Profile Slabs; Semifinished, Slab Hot Rolled From Ingot; Chapter 72, Note 1(ij); Flat-Rolled Products of Iron
or Nonalloy Steel, Chapter 72, Note 1(k); Further Worked, Chapter 72, Additional U.S. Note 2; NY 896625, HQ 088116,
HQ 957535
Dear Port Director:
In your memorandum of November 27, 1995 (MAN-1-CO:CH:CT306
CTR), you forwarded a letter from counsel for LeeMar Steel Co.,
Inc., requesting internal advice on the classification of certain
hot-rolled carbon steel products produced in Brazil. Additional
information was provided in a submission, dated October 9, 1996.
FACTS:
The merchandise in issue is invoiced as QUALITY ASTM A36-91
PRIME STEEL PROFILING SLABS. It is manufactured in Brazil by
Usinas Siderurgicas de Minas Gerais S.A. (USIMINAS), and imported
in individual pieces, measuring from 4.7260 in. x 72 in. X 291.33
in. to 10.2260 in. x 48 in. x 207.96 in. Mill test certificates
show a chemistry in the range shown in American Society for
Testing and Materials (ASTM) specification A36/A 36M-91, the
standard specification for structural steel, together with yield
and tensile strengths in the range shown in the specification for
plates, shapes and bars.
The processing involves the indirect casting of molten steel
from a basic oxygen furnace into ingots that measure from 21 to
33 inches in thickness. The castings are then heated to rolling
temperatures of 1652 degrees Fahrenheit and rolled once in a
reversible slabbing mill. The product is then hot scarfed on
both the top and bottom surfaces to remove surface imperfections,
then subjected to either two or more additional passes. Counsel - 2 -
states that, depending on the amount and severity of surface
defects and the speed at which the slab moves through the
scarfer, between 3.2 to 9.5 mm is removed from the entire surface
of the slab. The product is then rolled either two or three more
times in its original hot state to thicknesses of between 4.7 to
10.22 inches. The resulting product, referred to as profiling
(profile) slab, has unfinished, as-rolled edges and convex and
concave surfaces which are said to evidence lack of strict
dimensional or flatness tolerances.
Counsel states that after importation the profiling slabs
were either sold as imported, or torch cut using profile cutting
machines into specific shapes, typically for use as machine
bases, die bolster plates and heavy machine components.
The merchandise was entered under the provision for other
semifinished products of iron or nonalloy steel, containing by
weight less than 0.25 percent of carbon, of rectangular (other
than square) cross section, in subheading 7207.12.00, Harmonized
Tariff Schedule of the United States (HTSUS). Counsel maintains
that the product has not been further worked beyond semifinished.
In accordance with Chapter 72, Note 1(ij), HTSUS, this product is
of solid section, is not presented in coils, and has not been
further worked beyond primary hot-rolling. In addition, any
proposal to classify this merchandise otherwise than as a
semifinished product of iron or nonalloy steel is a modification
of the treatment previously accorded to substantially identical
merchandise, for which the Customs Modernization Act requires
publication of notice to interested parties and solicitation of
public comments.
The import specialist proposes to reclassify the goods in
subheading 7208.42.00, HTSUS, as other flat-rolled products of
iron or nonalloy steel, of a thickness exceeding 10 mm.
The provisions under consideration are as follows:
7207 Semifinished products of iron or nonalloy steel:
Containing by weight less than 0.25 percent of carbon:
7207.12.00 Other, of rectangular (other than square) cross section...3.4
percent ad valorem - 3 -
* * * *
7208 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot- rolled, not clad, plated or coated:
Other, not in coils, not further worked than hot-rolled:
7208.42.00 (now 51.00) Of a thickness exceeding 10 mm
...4.8 percent ad valorem
ISSUE:
Whether hot rolled carbon steel profile slabs are
semifinished articles for tariff purposes.
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 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 ENS should always be consulted. See T.D. 89-80. 54 Fed. Reg.
35127, 35128 (Aug. 23, 1989).
The term Semifinished products is defined, in relevant part,
as other products of solid section, which have not been further
worked than subjected to primary hot-rolling or roughly shaped by
forging, including blanks for angles, shapes or sections.
Chapter 72, Note 1(ij), HTSUS. The term Flat-rolled products is
defined, in relevant part, as rolled products of solid
rectangular (other than square) cross section, which do not
conform to the definition at (ij), in the form of straight
lengths, which if of a thickness less than 4.75 mm are of a width - 4 -
measuring at least 10 times the thickness or if of a thickness of
4.75 mm or more are of a width which exceeds 150 mm and measures
at least twice the thickness. Chapter 72, Note 1(k), HTSUS.
As to whether the merchandise is "semifinished" for tariff
purposes, slabs and other semifinished steel products are not
made to American Society for Testing and Materials (ASTM) or
other industry specifications. On the other hand, plate and
other finished steel products, are made to an ASTM or recognized
industry specifications. Specifically, ASTM Specification A6 is
the Standard Specification for Rolled Steel Plates, Shapes, Sheet
Piling, and Bars for Structural Use, and contains dimensional/
tolerance/flatness requirements for rolled steel plate. ASTM
Specification A36 is the Standard Specification for Structural
Steel, and contains chemical and tensile requirements for carbon
steel plates and other structural quality steel. For a product
to conform to industry specifications for plate, it must meet
both the requirements of ASTM A6 and A36. Therefore, any steel
product described as semifinished, but which conforms to an ASTM
or other industry specification for plate or other finished steel
product, must be classified as a finished steel product.
The definitions for "semifinished" and "flat-rolled" do not
define the terms "primary hot-rolling" and "rolling" which are
used to describe the condition of the steel products that result
from these processes. It is noted that hot scarfing is a
conditioning operation normally conducted after rolling to remove
surface defects from semifinished steel before it is rolled,
forged or otherwise hot formed into a finished steel product.
Normally, reroll slab is a type of semifinished steel product
intended for further hot working and is usually hot scarfed after
the rolling process is completed. In this instance, the steel is
hot scarfed prior to completion of the rolling, but the reason is
not given. We conclude that no definitive conclusions can be
drawn from this apparent deviation from normal slab production.
It is noted, however, that in the production of reroll slab the
ingot is normally rolled several times, as is the case here.
In discussing slabs and sheet bars of heading 7207, relevant
ENS at p. 991 refer to heading 7208 ENS regarding the distinction
between these products and certain plates. The heading 7208 ENS
at p. 994 state in relevant part that certain sheets and plates - 5 -
may have dimensions similar to those of slabs and sheet bars.
However, they can be distinguished from slabs and sheet bars
since:
(1) They are most often cross-rolled (longitudinally and
transversely) and sometimes oblique-rolled whereas
slabs and sheet bars are roughly rolled longitudinally
only (in the slabbing or roughing mill).
(2) Their edges are normally sheared or frame-cut and show
traces of the shears or frame whereas slabs and sheet
bars have round edges.
(3) Tolerances as to thickness and surface defects are very
strict whereas slabs and sheet bars are not of uniform
thickness and show various surface defects.
The available information indicates these articles referred
to as profile slabs have rough surfaces and are rolled in the
longitudinal direction only, i.e., they are not cross-rolled.
They have so-called "mill" or as-rolled edges. These are
characteristics of semifinished slabs, not finished plates.
While no Customs laboratory analysis was ever conducted, the
import specialist observes that the mill test certificates show
heat analyses in the chemistry range shown in ASTM specification
A36/A 36M, the standard specification for structural steel. The
mill, however, guarantees only nominal thicknesses and widths.
The profile slabs in issue do not comport with the cited
ENS. Specifically, there is no evidence in the file that the
imported hot-rolled products meet an industry standard for the
close tolerances required for flat-rolled plate, nor is there
evidence that the profile slabs are rolled to requirements
established by the importer or specific end-user, to tolerances
which are comparable in accuracy to an industry standard for
flat-rolled products. NY 896625, dated April 21, 1994, and HQ
957535, dated August 27, 1996, are in accord.
Our decision to classify the profile slabs in issue as
semifinished products of iron or nonalloy steel is based on the
information available to us at this time. Any change in the
facts, as presented, to include laboratory analysis, and other
credible evidence as to the existence of production standards for
dimensional tolerances equivalent to those for flat-rolled
products, may result in a different conclusion. See HQ 088116,
dated February 27, 1991. - 6 -
In view of this conclusion, and the cited administrative
rulings on similar merchandise, this decision does not modify the
treatment previously accorded by the Customs Service to
substantially identical transactions, within section 625(c)(2),
Tariff Act of 1930 (19 U.S.C. 1625(c)(2)), as amended by section
623 of Title VI (Customs Modernization) of the North American
Free Trade Agreement Implementation Act.
You should mail this decision to the internal advice
applicant, through its representative, no later than 60 days from
the date of this letter. On that date 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