CLA-2 RR:CR:GC 966795 DSS
Port Director
U.S. Customs and Border Protection
1901 Cross Beam Drive
Charlotte, NC 28217
RE: Internal Advice 03/020; PTFE-lined steel pipe and fittings
Dear Port Director:
This is in response to your memorandum dated September 18, 2003, addressed to the Customs Information Exchange regarding Internal Advice Request 03/020. This is in reference to a letter in which Patton Boggs LLP, on behalf of Crane Resistoflex (Resistoflex or importer), requests internal advice on the classification of polytetrafluoroethylene (PTFE) lined steel pipes, fittings and expansion joints under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The Chief, Metals and Machinery Branch, National Commodity Specialist Division (NCSD) forwarded your memorandum and an accompanying NCSD memorandum dated October 22, 2003 to our office. Consideration was also given to additional material that was received on April 29, 2004.
FACTS:
The articles at issue are PTFE-lined steel pipes, fittings and expansion joints. The instant articles include an 18-inch pipe, a 16-inch elbow and a 16-inch armored expansion joint with stainless steel housing. These pipes and fittings have steel flanges welded on their ends so that the pipes can be attached to other pipes and fittings. These pipes and fittings are used to transport highly corrosive liquids or gases and are frequently used in the chemical processing and pharmaceutical industries. Vent holes are drilled into the steel casing to prevent molecules of the corrosive gases or liquids that are being transported from building up and becoming trapped in the space between the steel casing and PTFE liner.
The 18-inch pipe consists of a seamless steel pipe made to ASTM Specification A 106 Grade B carbon (nonalloy steel). The flanges welded to each end of this pipe are produced from forged nonalloy steel meeting ASTM Specification A 105. The wall thickness of the pipe is less than 19 mm. The 16-inch steel elbow consists of steel made to ASTM Specification A 234. The flanges welded to each end are produced from forged nonalloy steel meeting ASTM Specification A 105.
The armored instant elbow joint consists of a flexible PTFE-bellows covered in a stainless steel housing. The expansion joints are also equipped with steel flanges that that have been drilled or tapped to mate with ANSI 125 and150 flanges. The flanges are connected together by limit rods (steel nuts and bolts) in order to limit the amount of extension of the flexible PTFE tube. The expansion joints join pipes together while also providing flexibility in a pipeline. This allows for the expansion that occurs due to changes in temperature or the fluids inside, therefore eliminating breaks in the pipeline or fittings.
ISSUE:
Whether the instant pipes, fittings and expansion joints are classified as PTFE-lined steel pipes, fittings and joints of headings 7304 and 7307, HTSUSA, or as plastic (i.e., PTFE) pipes, fittings and joints under heading 3917, HTSUSA.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied. GRI 3(b) states in part that composite goods are to be classified as if consisting of that material or component which imparts the essential character to the whole. GRI 3(c) states that goods which cannot be classified according to GRI 3(b) are to be classified in the heading which occurs last in numerical order from among those which equally merit consideration.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUSA and are thus useful in ascertaining the classification of merchandise under the System. The Bureau of Customs and Border Protection (Customs) believes the ENs should always be consulted. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUSA provisions under consideration (2003) are as follows:
3917 Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics:
Other tubes, pipes, and hoses:
3917.39.00 Other:
3917.39.0010 Reinforced with metal
* *
3917.40.00 Fittings:
3917.40.0090 Other
* * * *
Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel:
Other, of circular cross-section of iron or nonalloy steel:
7304.39.00 Other:
Other:
Other:
Having an outside diameter exceeding 406.4 mm:
7304.39.0076 Having a wall thickness less than 19 mm
* * * *
Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel:
Other, of stainless steel:
Other:
7307.29.0090 Other
* *
Other:
7307.99 Other:
Other:
7307.99.5045 Of iron or nonalloy steel
Counsel for the importer refers to these articles as essentially PTFE pipes clad in steel casings. He states that the steel casings are used solely to provide structural support to the PTFE pipes and that these articles are composite goods under GRI 3(b). Counsel argues that the essential character of the composite goods is provided by the PTFE because of its chemical properties. Counsel argues that the PTFE is indispensable to the function of the pipe to carry liquids and gases and that the steel pipe would corrode if not for the PTFE. Counsel states that the steel pipe only serves to strengthen the PTFE pipe and that the PTFE pipe could be encased in other materials to provide support. Counsel argues that the pipe is classified under subheading 3917.39.0010, HTSUSA, and the elbow and expansion joint are classified under subheading 3917.40.0090, HTSUSA.
Documentation in the file, including illustrations, indicates that the elbows and expansion joint serve to connect two tubes together. Therefore, we find that the elbow and expansion joint are fittings. See e.g., NY K83125, dated March 10, 2004 (classifying steel elbows as fittings) and NY E87190, dated October 7, 1999 (classifying expansion joints as fittings). The question is whether they fall under heading 3917 or 7307, HTSUSA; the other question is whether the pipe falls under heading 3917 or under 7304, HTSUSA.
Heading 3917, HTSUSA, covers tubes, pipes and fittings made of plastic. The General Notes to Chapter 39 state that in heading 3917, pipes and fittings means “hollow products, whether semi-manufactures or finished products, of a kind generally used for conveying, conducting or distributing gases or liquids . . . .” The notes to headings 7304 and 7307 contain similar language for steel pipes and fittings.
The PTFE-lined pipe and fittings are composite goods made up of different constituents, each provided for in its own heading. Each heading, however, describes part only of the goods. Therefore, we must try to establish the essential character of the composite pipe and fittings under GRI 3(b).
The factor or factors which determine essential character will vary with the goods. It may, for example, be determined by the nature of a component or components, their bulk, quantity, weight or value, or the role of a component or components in relation to the use of the good. In terms of the relative role of the components, the PTFE lining provides an important function by preventing corrosion. However, the steel component provides an important function as well. Such piping components are ordered to dimensions specified by the purchaser or to dimensional standards such as ANSI (American National Standards Institute) and American Petroleum Institute (API) specifications. In order to meet the applicable ASTM specifications, steel pipes, tubes and fittings must be made by certain manufacturing methods, they must meet certain chemical and mechanical/tensile requirements, they must pass certain tests and they must have certain physical characteristics (e.g., dimensions, end finishes). The steel pipes and fittings are not mere cladding for the PTFE “pipe.” Steel, rather than some other material such as fiberglass is used for its specific properties, such as strength, ductility, and ability to withstand certain temperatures. The PTFE liner is used because it provides corrosion-resistance qualities.
With regard to the pipe and elbow, we find the essential character to be imparted by the steel. In essence, they are a steel pipe and elbow with a plastic lining. Plastic tubes and pipes certainly can, and do, have steel reinforcement, but such reinforcement is usually in the form of a wire, or braid. The PTFE-lined steel pipe is classified under subheading 7304.39.0076, HTSUSA. The PTFE-lined steel elbow is classified under subheading 7307.99.5045, HTSUSA.
With regard to the expansion joint, we are unable to readily identify an essential character for this good under GRI 3(b), HTSUSA. Under GRI 3(c), therefore, this article is provided for in heading 7307, HTSUSA. This article is similar to the Resistoflex convoluted expansion joint classified in New York Ruling Letter (NY) J84495, dated May 28, 2003. The convoluted expansion joint was classified under subheading 3917.40.0090, HTSUSA, as a plastic pipe fitting. In NY J84495, the essential character of that expansion joint was imparted by the plastic, because that is the part that expands or bellows out to accommodate or allow the movement. The instant armored expansion joint is different, however, in that the PTFE bellows is coated with stainless steel.
The stainless steel-coated PTFE expansion joint is a composite good made up of different constituents, each provided for in its own heading. Each heading, however, describes part only of the good. The expansion joints in NY J84495 and the instant ruling have similar functions in providing a flexible connection for PTFE-lined steel pipe. However, the metal component of the instant armored expansion joint imparts important characteristics by increasing the temperature and pressure at which the expansion joint can be used. It also reduces the flexibility of the joint. For these reasons, we are unable to establish the essential character of the armored expansion joint under GRI 3(b). Therefore, we find that under GRI 3(c), the instant armored expansion joint is to be classified in heading 7307, as the heading that occurs last in numerical order among the enumerated headings, all of which merited consideration. The stainless steel-coated expansion joint is classified under subheading 7307.29.0090, HTSUSA.
Articles classified under subheading 7307.99.5045, HTSUSA, and entered after March 20, 2002, may have additional duties imposed under subheading 9903.73.93, HTSUSA, in accordance with the Section 201 Relief for Certain Steel Products (steel safeguard measures), which was the subject of Presidential Proclamation 7529, issued on March 5, 2002. However, the steel safeguard measures terminated for articles entered after December 5, 2003. See Presidential Proclamation 7741 contained in 68 Fed. Reg. 68483, 68485 (Dec. 8, 2003).
HOLDING:
At GRI 3(b), the instant PTFE-lined steel pipe and elbow are provided for in headings 7304 and 7307, HTSUSA. The pipe is classified under subheading 7304.39.0076, HTSUSA, which provides for, “Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: Other, of circular cross-section of iron or nonalloy steel: Other: Other: Other: Having an outside diameter exceeding 406.4 mm: Having a wall thickness less than 19 mm.” The 2003 general rate of duty for this article is free.
The elbow is classified under subheading 7307.99.5045, HTSUSA, which provides for, “Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: Other: Other: Other: Of iron or nonalloy steel: Other.” The 2003 general rate of duty for this article is 4.3 percent ad valorem.
At GRI 3(c), the armored expansion joint falls under heading 7307, HTSUSA. It is classified under subheading 7307.29.0090, HTSUSA, which provides for “Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: Other, of stainless steel: Other: Other.” The 2003 general rate of duty is 5 percent ad valorem.
This decision should be mailed by your office to the internal advice requestor no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs and Border Protection Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
Sincerely,
Myles B. Harmon
Director,
Commercial Rulings Division