CLA-2 RR:CR:GC 966134 JAS
Port Director of Customs
4735 Oakland St.
Denver, CO 80014
RE: Protest 3307-02-100032; Hollow Drill Bars and Rods; Parts of Drilling
Machinery; 201 Steel Safeguard Duties
Dear Port Director:
This is our decision on Protest 3307-02-100032, filed by counsel on behalf of Atlas Copco Construction Co., against your classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of certain drill bars and rods of non-alloy steel. The entries were liquidated on September 13, 2002, and this protest timely filed on December 12, 2002.
FACTS:
The merchandise at issue is described as extension rods, drifter rods, guide rods, guide tubes and down-the-hole drill tubes. All are said to be used as parts of rock drilling machinery. The manufacturing process for these products includes drilling a hole in the center of each bar along its entire length, then inserting a core of a different grade steel. The bars, with core inserted, are then hot-rolled into circular or hexagonal shape, after which the core is removed and male and female threads cut into the ends. This creates different concentric diameters at the threaded ends. The bars are carburized or heat treated at over 900( C, then control cooled to maintain proper temper or degree of hardness. Imported in 5 and 6-ft. lengths, a drill bit is attached to one end of the rod and drilling commences. Additional rods are screwed on as the hole deepens.
The merchandise was entered under a provision of heading 8431, HTSUS, as parts suitable for use solely or principally with rock cutting or boring machinery. The goods were reclassified under a provision of heading
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7228, HTSUS, as hollow drill bars and rods of non-alloy steel, and additional duties assessed under subheading 9903.73.50 for the entry made on or after March 20, 2002.
On protest, counsel makes the following claims against the liquidated classification and in support of classification first under heading 8431 or, in the alternative, under heading 7304, HTSUS, as seamless hollow profiles, of iron or steel, of either circular or non-circular cross section. Because the merchandise is threaded, it does not conform to the Chapter 72, Note 1(p), HTSUS, definition for hollow drill bars and rods of heading 7228. As such, they are not subject to the assessment of additional duties under subheading 9903.73.50. The extension rods, drifter rods, guide rods, guide tubes and down-the hole drill tubes are parts suitable for use solely or principally with rock cutters and other boring machinery. The articles are products of heading 7304 because they conform to the description for hollow profiles in the General ENs to Chapter 73 as hollow products not conforming to the definition (above) for tubes and pipes and mainly those not having their inner and outer surfaces of the same form.
The HTSUS provisions under consideration are as follows:
7228 [H]ollow drill bars and rods, of alloy or non-alloy steel:
.80.00 Hollow drill bars and rods
* * * *
7304 Tubes, pipes and hollow profiles, seamless, of iron or steel:
7304.59.80 Of circular cross section, of other alloy steel, other
Other:
7304.90.30 Of alloy steel
* * * *
Parts suitable for use solely or principally with the machinery of
headings 8425 to 8430:
8431.49 Other:
Other
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ISSUE:
Whether the goods at issue, imported in specific lengths and threaded on both ends, are made up into specific identifiable articles.
LAW AND ANALYSIS:
Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified 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 at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
To facilitate positive adjustment to competition from imports of certain steel products (so-called Section 201 steel safeguard duties), Presidential Proclamation 7529 authorizes the assessment of certain additional duties under subheading 9903.73.50 on bars and rods classifiable in subheading 7228.80.00 imported between March 20, 2002, the effective date of the proclamation, through March 19, 2003.
As to the liquidated provision in heading 7228, HTSUS, hollow drill bars and rods are defined in Chapter 72, Note 1 (p), HTSUS, in particular with respect to their cross sectional dimension and their internal and external dimensions. Neither Note 1(p) nor the relevant heading 7228 EN sanction threading of the ends as permissible further processing of products of that heading. The articles at issue are not provided for in heading 7228. However, Note 1(p) goes on to say that hollow bars and rods of iron or steel not conforming to the definition in that Note are to be classified in heading 7304. But, there is no evidence that the merchandise conforms to American Petroleum Institute (API) Specification 5D for drill pipe of a kind used in drilling for oil or gas, one class of goods described by heading 7304. Whether or not the goods qualify as other
seamless hollow profiles of iron or steel of that heading, relevant ENs under exemplar (f) exclude from heading 7304 tubes, pipes and hollow profiles made up into specific identifiable articles, to include other machinery parts of Section XVI.
Section XVI, Note 2(b), HTSUS, states that parts other than goods included in a heading of chapters 84 or 85 by virtue of Note 2(a), are to be classified with the machine or machines of the same heading with which they are suitable for sole or principal use, or in heading 8431, as appropriate.
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Commercial invoices submitted with this protest list product code numbers for these articles appearing in the protestant’s catalogs under the heading Bench and production drilling as well as color photographs from protestant’s web site showing the Atlas Copco rock drilling machine ROC F9 with which these articles are said to be used. This information, together with the fact that the rods and tubes at issue are imported threaded, in 5 and 6-ft. lengths, and undergo no post-importation processing, is compelling evidence that they are integral, constituent parts of rock drilling machinery and are principally used therewith. The rods and tubes at issue constitute specific identifiable articles which the cited ENs suggest are excluded from heading 7304. This is also an indication that the description in heading 7304, hollow profiles, seamless, of iron or steel, is not “specific” for purposes of Additional U.S. Rule of Interpretation 1(c), HTSUS.
HOLDING:
Under the authority of GRI 1, and Section XVI, Note 2(b), HTSUS, the extension rods, drifter rods, guide rods, guide tubes and down-the hole drill tubes are provided for in heading 8431. They are classifiable in subheading 8431.49.90 HTSUS. Goods so classifiable are not subject to applicable Section 201 Duties authorized by Presidential Proclamation 7529.
The subject merchandise should be reclassified under subheading 8431.49.90 and the protest ALLOWED under this provision. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division