CLA-2-RR:CR:GC 967224 IOR
Tariff No.: 7215.90.3000, 9903.73.60, 9903.73.61, HTSUSA
Port Director
Customs and Border Protection
610 S Canal St.
Chicago, IL 60607
Attn: Juana Gonzalez, I.S.
Re: Protest AFR No. 3901-04-100362; hanger and tie wire
Dear Port Director:
This is our decision on the application for further review (AFR) of protest no. 3901-04-100362, filed against your classification of hanger and tie wire, under the Harmonized Tariff Schedule of the United States (HTSUS). The subject nine entries were liquidated on December 5, 2003, and this protest and AFR was timely filed on March 2, 2004. Our decision follows receipt of samples and photographs of the subject merchandise by letter dated September 21, 2004, and a teleconference held on October 7, 2004, between the protestant and its counsel, and members of the staff of the Office of Regulations and Rulings, General Classification Branch.
FACTS:
The protest is against the liquidation of nine entries of hanger and tie wire. Four entries were made during the period from March 20, 2002 through March 19, 2003, and five entries were made during the period from March 20, 2003 through March 19, 2004.
In representative entry 916-xxxx1239, the imported merchandise is described on the invoice, packing list, inspection certificate and other documents associated with the entry as soft annealed galvanized wire, straightened and cut in various dimensions, and made in accordance with ASTM Specification A 641. ASTM A 641 is the Standard Specification for Zinc-Coated (Galvanized) Carbon Steel Wire. According to the scope of the specification, the wire covered therein is for “general use.” The dimensions of the imported wires on the representative entry are 12 gauge (0.105” diameter) in lengths of 12’, 6’6” and 4’6”, 9 gauge (0.148” diameter) in lengths of 12’ and 4’6”, and 18 gauge (0.0475” diameter) in 30” lengths. According to the Inspection Certificate, the tensile strength of the merchandise is 39-40 kg/sq mm. The protestant states that the tensile strngth is within the specification of ASTM A641.
The imported merchandise was entered under subheading 7326.20.0070, HTSUS, which provides for articles of iron or steel wire. A Notice of Action, CF 29, dated November 6, 2003, notified the protestant that the subject entries would be rate advanced as the imported merchandise is in Chapter 72, HTSUS, and that additional duties of 24% under Section 201 would be assessed. The subject entries were liquidated on December 5, 2003 under subheading 7215.90.3000, HTSUS, which provides for bars and rods of iron or nonalloy steel, cold-formed. The entries were also liquidated with “Section 201” duties of 24% under subheading 9903.73.61, HTSUS, in accordance with the Section 201 Relief for Certain Steel Products ("steel safeguard measures"), the subject of Presidential Proclamation 7529, issued on March 5, 2002. We note that for four of the nine entries, the applicable “Section 201” duties would have been at the rate of 30% under subheading 9903.73.60, HTSUS, because the entries were made between March 20, 2002 and March 19, 2003.
In the protest, it is asserted that the hanger and tie wires are finished “articles “ of steel prepared for use in structures and therefore should be classified in subheading 7308.90.9590, HTSUS, as “…plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel: Other: Other: Other: Other: Other.” In the alternative, the protestant asserts that the imported merchandise should be classified as entered, in subheading 7326.20.0070, HTSUS.
The protestant describes the merchandise as “finished products used in interior building construction as building components/fasteners in the construction of suspended ceilings and walls.” It is stated that the hanger and tie wires are zinc coated and straightened so that they will not curl when attached to ceilings and walls. It is asserted that hanger and tie wires must be manufactured with a maximum tensile strength of 49kg/sqmm, so that the wires can be manually bent and tied by workmen installing suspended ceilings and walls, making the wire unsuitable for any commercial use other than as a building component used in the construction of ceilings and wall because the products are too malleable for other commercial applications. It is asserted that most wires are cut during installation of the ceiling and wall panels due to different heights between the suspended panels and points of attachment. Hanger wires are normally imported in 12’ lengths. The hanger wires are manually tied to attachment points above a ceiling or to clips that are attached above and the hanging end is tied to the structural grid system holding the suspended panel. The tie wires subject to this protest were imported in 30” lengths. In some instances tie wires are imported by protestant in 48” U-hanks so that they can be carried on the workers’ belts, however no U-hanks are included in any of the protested entries. Tie wires are used to tie building components together in close spaces. The protestant asserts that the imported merchandise is sold directly to end users and distributors to the construction industry. The protestant has submitted three statements substantiating the foregoing.
ISSUES:
Whether the hanger and tie wire is classified as other bars and rods of iron or nonalloy steel in heading 7215, HTSUS, or as other articles of iron or steel wire in heading 7326, HTSUS.
Whether Section 201 duties were correctly assessed.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 2 through 6 may then be applied in order. GRI 3 is utilized when, by application of GRI 2(b), a good consists of materials or components which are prima facie classifiable under two or more headings. In such a case, in accordance with GRI 3(a) “[t]he heading which provides the most specific description shall be preferred to headings providing a more general description." According to GRI 6, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. The relative section, chapter and subchapter notes also apply, unless the context otherwise requires
The HTSUS subheadings under consideration are as follows:
Other bars and rods of iron or nonalloy steel:
Other:
Plated or coated with metal:
Cold-formed
Structures (excluding prefabricated buildings of heading 9406) and parts of structures…of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel:
Other:
Other:
Other………………….
Other articles of iron or steel:
Articles of iron or steel wire
Cold-formed bars and rods of steel (other than stainless steel or tool steel) (provided for in subheading 7215.10.00, 7215.50.00, 7215.90.30, 7228.20.50, 7228.50.50 or 7228.60.80), other than products of Canada, Israel, Jordan and Mexico and products of countries exempted in U.S. note 11(d) to this subchapter:
Other:
If entered during the period from March 20, 2002, through March 19, 2003, inclusive…………………………..
If entered during the period from March 20, 2003, through March 19, 2004, inclusive
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive nor legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Chapter note 72, HTSUS, defines “other bars and rods,” in pertinent part, as “[p]roducts which do not conform to any of the definitions at (ij), (k), or (l) above or to the definition of wire, which have a uniform solid cross section along their whole length in the shape of circles….” The subject hanger and tie wires do not meet the definitions in (ij), (k), or (l), or of “wire.”
The hanger and tie wire does meet the definition of “other bars and rods,” because each wire has a uniform solid cross section along its whole length in the shape of a circle. Therefore, the imported hanger and tie wire is described in heading 7215, HTSUS.
General Note (IV)(C) to Chapter 72 of the EN’s states that the products of Capter 72 may be subject to mechanical working, such as turning, milling, grinding, perforation, punching, folding, sizing or peeling. They may also be subject to certain working, including surface treatments including annealing and coating, “provided that they do not thereby assume the character of articles or of products falling within other headings.” EN 72.15 states that cold-formed or cold-finished bars and rods are delivered in straight lengths, and are therefore distinguished from wire of heading 72.17, which is always in coils.
We believe that the instant wires meet the definition of Note 1(m) to Chapter 72, HTSUS, as “other bars and rods.” “Other bars and rods” of nonalloy steel are provided for under heading 7215, HTSUS.
The protestant takes the position that the steel wire should be classified as articles under heading 7326, HTSUS, which provides for "Other articles of iron or steel.”
According to GRI 3(a), when goods are, prima facie, classifiable under two or more headings, "[t]he heading which provides the most specific description shall be preferred to headings providing a more general description." See also Better Home Plastics Corp v. United States, 20 C.I.T. 221, 222, 916 F. Supp. 1265, 1266 (1996), aff’d. 119 F. 3d 969 (Fed. Cir. 1997). Moreover, heading 7326, HTSUS, is a general heading or basket provision, as evidenced by the word "other." See The Item Company v United States, 98 F. 3d 1294, 1296 (Fed. Cir. 1996). Classification of imported merchandise in a basket provision is only appropriate if there is no tariff provision that covers the merchandise more specifically. See EM Industries, Inc. v. United States, 22 C.I.T. 156, 165, 999 F. Supp. 1473, 1480 (1998) ("'Basket' or residual provisions of HTSUS Headings. . . are intended as a broad catch-all to encompass the classification of articles for which there is no more specifically applicable subheading"). We conclude that between headings 7215 and 7326, HTSUS, the hanger and tie wire is more specifically provided for in heading 7215, HTSUS, as other bars and rods of iron or nonalloy steel and is classified therein.
We note that in Motor Wheel Corp. v. United States, 19 CIT 385 (1995), the court determined that certain cut steel was a stamped “article” under heading 7326, HTSUS, as opposed to flat-rolled steel under heading 7208, HTSUS. We consider the decision in Motor Wheel Corp., as applicable only to the stamped steel at issue therein, and not applicable to a determination of whether the merchandise classifiable as other bars and rods herein assumes the character of other articles of steel. Further, we note that the exemplars of articles of wire in EN 73.26, are not akin to the hanger and tie wire at issue in this protest. In addition, the hanger wire in this case generally still needs to be cut before use, and thereby it does not assume the character of an article at the time of importation.
The protestant cites to Doherty-Barrow of Texas, Inc. v. United States, 3 C.I.T. 228 (1982), in which steel strip made into bale ties was classified under the HTSUS predecessor, the Tariff Schedules of the United States (TSUS), as bale ties under item 642.93, TSUS as opposed to steel strip under item 609.03, TSUS. While prior TSUS cases may be instructive in interpreting identical language in the HTSUS, they are not dispositive. H.R. Conf. Rep. No. 100-576, at 549-50 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1582-83. As explained in the House Conference Report accompanying the Omnibus Trade and Competitiveness Act of 1988, which enacted the HTSUS: In light of the significant number and nature of changes in nomenclature from the TSUS to the HTSUS, decisions by the Customs Service and the courts interpreting the nomenclature under the TSUS are not to be deemed dispositive in interpreting the HTSUS. Nevertheless, on a case-by-case basis prior decisions should be considered instructive in interpreting the HTSUS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. In this case, the nomenclature has changed, and there are no longer headings specifically providing for steel strip or “bale ties,” and we do not find the decision in Doherty-Barrow of Texas, Inc. instructive.
The protestant asserts that the low tensile strength specified for the wire makes the wire sufficiently malleable for use as hanger and tie wire, and unsuitable for other commercial uses. Therefore it is asserted that the merchandise is classified in Chapter 73 and not Chapter 72, HTSUS. According to the protestant the tensile strength of the wire is in accordance with ASTM Specification A 641, which is a specification for “general use” galvanized carbon steel wire. The low tensile strength of the wire does not preclude it from being classified in heading 7215, HTSUS.
In support of the position that the subject merchandise is classified under heading 7326 as “articles,” the protestant cites to Ludvig Svensson (U.S.) Inc. v. United States, 23 C.I.T. 573, 62 F. Supp. 2d 1171 (1999), and Avins Industrial Products Co. v. United States, 72 Cust. Ct. 43, 376 F.Supp. 879 (1974), aff’d, 62 C.C.P.A. 83, 515 F.2d 782 (1975), in which cases the issues before the court were whether the merchandise was classified as “parts” or as the component material. We do not find the cited decisions to be on point, as they address the issue of whether merchandise is to be classified as a “part”, which is not an applicable analysis in this protest.
Concerning heading 7308, HTSUS, as the wires do not undergo any process that is not allowable under heading 7215, HTSUS, it is difficult to argue that the wires are “prepared for use in structures.” In HQ 965792, dated March 31, 2003, it was stated that “angles, shapes and sections that have plates, stiffeners, or other structural elements bolted or welded onto them, are prepared for use in structures.” In HQ 966408, dated July 22, 2003, with regard to tubes and pipes, it was stated that because according to the General ENs to Chapter 73, tubes and pipes of that Chapter may be polished, coated, bent (including coiled tubing), threaded and coupled or not, drilled, waisted, expanded, cone shaped or fitted with flanges collars or rings, it was not sufficient to conclude that tubes and pipes were prepared for use in structures simply by virtue of having been drilled, bent or notched, but that “something more is required.”
We conclude that the merchandise is classified under heading 7215, HTSUS, specifically in subheading 7215.90.30, which provides for “[o]ther bars and rods of iron or nonalloy steel: Other: Cold-formed.”
With regard to the liquidation of the subject entries with “Section 201” duties under subheading 9903.73.61, HTSUS, the United States Trade Representative (USTR), under the authority of the President of the United States, administered "safeguard measures" following a determination by the International Trade Commission of import injury with respect to certain steel products. These safeguard measures, commonly known as "Section 201 Duties," which include increased duties, went into effect on March 20, 2002. Presidential Proclamation 7529 authorized the assessment of certain additional duties under subheadings 9903.73.60 and 9903.73.61 on certain cold-formed bars and rods of steel, included in subheading 7215.90.30, HTSUS, entered or withdrawn from warehouse after March 20, 2002, the effective date of the proclamation (the exact application of the duty depends on the date of entry or withdrawal). Merchandise classified under subheading 7215.90.30, HTSUS, unless specifically excluded, is subject to additional "Section 201 Duties."(
The protestant has provided history of Presidential Proclamation 7529, including the initiation, investigative process, and definition of “cold bar,” as support for the argument that the subject hanger and tie wire was not, and was not intended to be covered by the Section 201 investigation, or the subsequent injury determination. On this basis, the protestant takes the position that there is no legal basis for the imposition of duties under subheading 9903.73.61, HTSUS, on hanger and tie wire. However, the protestant has not asserted any exception providing for the hanger and tie wire in the language of the HTSUS legal notes, or otherwise. CBP has no basis for not applying subheadings 9903.73.60 and 9903.73.61, HTSUS to merchandise classified in subheading 7215.90.30, HTSUS.
As noted in the FACTS section, all of the protested entries were liquidated with Section 201 duties under subheading 9903.73.61, at the rate of 24%. The applicable subheading for entries, 916-xxxx123-9, 916-xxxx558-6, 916-xxxx908-2, and 916-xxxx362-9, is 9903.73.60, HTSUS, because those entries were made between March 20, 2002 and March 19, 2003. Subheading 9903.73.60, HTSUS, has a duty rate of 30%. Under 19 U.S.C. §1515(a), CBP is not authorized to assess additional duties upon review of a protest, and therefore CBP cannot reliquidate the subject four entries to reflect the correct duty rate.
HOLDING:
Under the authority of GRI 1, the hanger and tie wire is classified in subheading 7215.90.3000, HTSUSA, as “[o]ther bars and rods of iron or nonalloy steel: Other: Cold-formed,” with a column one, general duty rate of 0.8%. 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 internet at www.usitc.gov.
Pursuant to the Section 201 steel safeguard measures implemented by Presidential Proclamation 7529, hanger and tie wire classifiable in the subheading 7215.90.3000, HTSUSA, is subject to the additional ad valorem duties specified by subheadings 9903.73.60 and 9903.73.61, HTSUSA.
The protest should be DENIED. In accordance with the Protest/Petition Processing Handbook (CIS HB, June 2002, pp. 18 and 21), 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP 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.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division