CLA-2 OT:RR:CTF:TCM HQ H235551 TNA
Port Director, Service Port-Chicago
U.S. Customs and Border Protection
5600 Pearl Street
Rosemont, IL 60018
Attn: Heather Mitchell, Senior Import Specialist
RE: Internal Advice Request 12/038; classification of welded steel pipes
Dear Port Director:
This is in response to your letter, dated October 22, 2012, forwarding with comments the Request for Internal Advice submitted by LDR Industries (“LDR” or “Requester”), on September 21, 2012, concerning the proper classification of welded steel pipes under the Harmonized Tariff Schedule of the United States (“HTSUS”). In coming to our decision, we have taken into account arguments presented during meetings with my staff at our offices on March 28, 2013 and June 13, 2013, and in supplemental submissions dated April 18, 2013 and June 20, 2013.
FACTS:
The subject merchandise consists of two types of welded cold-rolled circular steel pipes: black and galvanized. Galvanized pipe is covered with a zinc material to make the steel pipe more resistant to corrosion. Black steel pipe is different from galvanized pipe because it is uncoated. The dark color comes from the iron-oxide formed on its surface during manufacturing. Galvanized pipe is manufactured without a seam. Both types of the subject merchandise have outside diameters ranging from ½ inch to two inches, and range in length from 18 inches to 120 inches. The pipes are imported cut to length, are generally threaded at each end, and are ready for use upon importation.
The port obtained samples of four pipes: two black pipes that measured two inches by 24 inches, and two galvanized pipes that measured three-quarters of an inch by 18 inches. These samples were sent to the U.S. Customs and Border Protection (“CBP”) Laboratory for analysis. The resulting laboratory report, CH20121142, dated October 3, 2012, found the following:
Zinc Coated Pipes
Length (end-to-end): 18 inches
OD: 1.063 inches
Wall thickness: 0.114 inches
TPI: 14
Total Thread Length: 0.790 inches
Black Pipe
Length (end-to-end): 24 inches
OD: 1.331 inches
Wall thickness: 0.131 inches
TPI: 11.5
Total Thread Length: 0.942
Chemistry
Zinc Coated Pipe Black Pipe
Carbon 0.086 0.082
Manganese 0.31 0.42
Phosphorus 0.019 0.029
Copper 0.006 0.006
Nickel 0.006 0.007
Molybdenum **** ****
Vanadium **** ****
****Below instrument limit
Metallurgy
Both samples show evidence of being annealed. Welds appear to be consistent with the ERW process; they are “hourglass” shaped.
Tensile Testing
Both pipes pass all of the tensile testing requirements in the ASTM Standard A53; however they fail several grade requirements in the ASTM A178 standard.
Additional
Both samples pass all dimensional measurements from ASTM standards A53, A178 and A450 including outside diameter (OD), Wall Thickness, Total Thread Length and Threads per Inch (TPI).
Both samples pass on weight per foot (lbs/ft) defined by ASTM standards A53 and A450.
Both samples conform to the chemical composition requirements given on Table 1 of ASTM standard A53.
The galvanized pipe is coated on both sides (inside and out) as required by ASTM A53.
Methods: CBPL 72-12, CBPL 72-22, CBPL 22-32, ASTM A 370.
The port notes that LDR has entered the subject steel pipes under a number of classifications over the past five years. In 2008, LDR described the subject merchandise as plumbing supplies and entered it under subheading 7306.30.5055, HTSUS, as welded steel pipes. In May 2008, LDR began entering its merchandise as seamless steel cold-rolled pipes suitable for boilers of subheading 7304.31.6010, HTSUS. In 2012, LDR began entering the subject steel pipes under subheading 7306.30.5010, HTSUS, as welded pipes suitable for boilers. In requesting this Internal Advice, LDR has submitted affidavits from company personnel, attesting to the pipes’ use in boilers and classification in subheading 7306.30.5010, HTSUS. However, if the pipe is not suitable for use in boilers, CBP must determine if the pipe is galvanized pipes of subheading 7306.30.5032, HTSUS, or as other welded pipes of subheading 7306.30.5055, HTSUS.
ISSUES:
Whether the subject welded steel pipes are suitable for specific use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters?
If not, whether the subject pipes are galvanized?
LAW AND ANALYSIS:
Classification under the HTSUS 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, GRIs 2 through 6 may then be applied in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs 1 through 5.
The HTSUS provisions under consideration are as follows:
7306 Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel:
7306.30 Other, welded, of circular cross section, of iron or nonalloy steel:
7306.30.50 Other:
7306.30.5010 Suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters, whether or not cold drawn
Other:
With an outside diameter not exceeding 114.3 mm:
Galvanized:
7306.30.5032 Other
Other:
7306.30.5055 Other
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 nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
We begin by noting that the dispute is at the 10-digit level of classification, as between standard pipes and pipes suitable for use in boilers. LDR argues that the subject pipes are “suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters,” and meets ASTM standards for boiler pipes, ASTM A-53 in particular. Citing Warner-Lambert v. United States and United States v. F.W. Myers & Co., Inc., LDR argues that the courts and CBP have long held that “the words ‘suitable for use,’ as applied to Customs law, means ‘actually, practically, and commercially fit’ for such use.” See Warner-Lambert v. United States, 545 F.Supp.2d 1345, 1353 (Ct. Int’l Trade, 2008); United States v. F.W. Myers & Co., Inc., 476 F.2d. 1377, 1378 (C.C.P.A. 1973).
In the present case, there is no dispute as to the classification of the subject merchandise through the 8-digit level. The sole dispute is at the 10-digit statistical breakout. In Warner-Lambert and Myers, to which LDR cites, the court found that “the words ‘suitable for use,’ as applied in the Customs law means ‘actually, practically, and commercially fit’ for such use,” as LDR argues. See Warner-Lambert, 545 F.Supp.2d 1353 and Myers, 476 F.2d. at 1378. The court went on to note that “such suitability does not require that the merchandise be chiefly used for the stated purpose, but it does require more than evidence of a casual, incidental, exceptional, or possible use.” Id, citing W.R. Filbin & Co., Inc. v. United States, 14 CIT 590, 744 F. Supp. 289 (1990). Thus, in the present case, the evidence presented needs to show that the use of the subject pipes in boilers is more than casual, incidental, exceptional or possible use.
In both its April 18 submission and at the June 13 meeting, LDR argued that steel pipes that meet the ASTM Standard A53, such as the subject merchandise, are frequently used in all parts of boilers, and that their specifications make them more than suitable for such use. LDR’s April 18 submission contained expert affidavits to this effect, and the June 13 meeting afforded my staff the opportunity to meet with one of these experts.
CBP’s laboratory results show that the subject pipes meet the requirements of ASTM Standard A53. The black pipes’ wall thickness is 0.131 inches, and the galvanized pipes’ wall thickness is 0.114 inches, which is within the range specified by A53. Their chemical components are less than the maximum percentages required by A53, and the laboratory specifically concluded that the subject pipes conform to these chemical composition requirements.
The ASTM Standard A53 standard indicates that the pipes that conform to this standard are for general use, and are designed for a range of uses. In particular, ASTM Standard A53 states that:
Pipe ordered under this specification is intended for mechanical and pressure applications and is also acceptable for ordinary uses in steam, water, gas, and air lines. It is suitable for welding, and suitable for forming operations involving coiling, bending, and flanging…
See ASTM A53. See also http://www.atlasconnection.com/profiles/blogs/ designing-and-specifying-astm-a53-vs-astm-a500 (“ASTM A53 pipe, a standard specification for black and hot-dipped, zinc-coated, welded and seamless steel pipe, is used for mechanical and pressure applications as well as ordinary uses in steam, water, gas and air lines… Round HSS have a superior surface finish and do not come with the lacquer coating that typically comes on A53 pipe. This saves money and time as this lacquer coating needs to be removed from the A53 pipe to accommodate welding and painting.”) Thus, pipes that meet this standard are suitable for a broad range of ordinary uses.
Further research supports this conclusion. For example, CBP has conferred with the American Boiler Manufacturers Association (“ABMA”), the national, nonprofit trade association of commercial, institutional, industrial and electricity-generating boiler system manufacturing companies. The ABMA has, in turn, received comments from its members on the suitability of using A53 pipe in boilers. These members have opined that A53 products are not suitable for use in boilers because the A53 specification was not developed for use as a heat transfer product specification. In particular, the non-destructive testing requirements are much more stringent for heat transfer products than those specified in A53.
One member noted that it has been manufacturing tube for nearly 40 years, and has not even had a single instance in which it had been asked to deliver ASTM A53 tubes for a boiler application. When carbon grade tubes are needed for a boiler, this member typically sees a request for ASTM A192 pipes, a different standard for seamless pipes. If the design calls for a carbon welded tube, ASTM A178 pipes are used, and this member does not produce carbon welded tubes. This manufacturer also noted that ASTM A53 is known in the business as “Standard Pipe,” is more commonly used in low end applications, and would be a typical grade used by jobbers and the plumbing industry.
Lastly, another member stated that the A53 standard is for a welded pipe that is similar to the seamless SA106B standard, but has less yield strength. Thus, this member noted that although A53 pipes could be used in a boiler, this member had never seen it used that way. To the contrary, this member opined that A53 pipes would be used in a low pressure application, if at all. Due to the yield strength, this member noted that A53 pipes have applications in low pressure/ low temperature applications, not applications consistent with boilers, superheaters, furnaces, etc. Thus, pipes that meet the terms of ASTM Standard A53 are not recognized as high pressure pipes; as such, they are not recognized as suitable for use specifically in boilers.
Other sources also indicate that the subject black and galvanized boilers are unlikely to be used in boilers. These sources state that “the primary use of galvanized pipe is to carry water to homes and commercial buildings,” and that:
The primary purpose of black steel pipe is to carry propane or natural gas into residential homes and commercial buildings. The pipe is manufactured without a seam, making it a better pipe to carry gas. The black steel pipe is also used for fire sprinkler systems because it is more fire-resistant than galvanized pipe.
See http://www.ehow.com/info_8386905_difference-pipe-galvanized-steel-pipe.html.
In addition, the affidavits that LDR has provided, attesting to the subject pipes’ use in boilers, do not contradict this evidence of general use. To the contrary, while the subject pipes might be capable of use in certain boiler applications, the affidavits do not amount to evidence of “more than casual, incidental, exceptional or possible use” required by the Warner-Lambert and W.R. Filbin courts.
The classification of the subject merchandise in subheading 7306.30.5010, HTSUS, as LDR requests, is inconsistent with prior CBP rulings on pipes that meet the ASTM A53 standard. In NY H84234, dated August 10, 2001, for example, CBP classified black and galvanized welded nonalloy steel pipe/pipe nipples that were threaded on both ends and used in the plumbing industry. These tubular products ranged from 10.3 mm to 60.3 mm in outside diameter, from 1.73 mm to 3.91 mm in wall thickness and from 1½ inches to 120 inches in length. These products, which are nearly identical to the subject pipes, were classified in subheadings 7306.30.5032 and 7306.30.5055, HTSUS, as galvanized or other pipes not suitable for use in boilers. See NY H84234. Other CBP rulings that have classified A53 pipes in particular have done so in various 10-digit subheadings of subheading 7306.30.50, HTSUS, according to the width of the pipes at issue, but none have been classified in subheading 7306.30.5010, HTSUS. See, e.g., NY A80891, dated March 19, 1996; NY A81991, dated April 10, 1996.
Lastly, CBP ruling NY C84507, dated February 25, 1998, is distinguishable as it classified ASTM A 178 pipes in subheading 7306.30.5010, HTSUS. ASTM A 178 provides for electric resistance welded carbon steel and carbon-manganese steel boiler and superheater tubes. As a result, NY C84507 can be distinguished from the present case.
Therefore, we find that the subject galvanized steel pipes are classified in subheading 7306.30.5032, HTSUS, which provides for “Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel: Other, welded, of circular cross section, of iron or nonalloy steel: Having a wall thickness of 1.65 mm or more: Other: Other: With an outside diameter not exceeding 114.3 mm: Galvanized: Other.” The subject black pipes are classified in subheading 7306.30.5055, HTSUS, which provides for “Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel: Other, welded, of circular cross section, of iron or nonalloy steel: Having a wall thickness of 1.65 mm or more: Other: Other: Other: Other.”
With respect to the issue of whether the subject merchandise is subject to anti-dumping duties, on July 22, 2008, the U.S. Department of Commerce, International Trade Administration (ITA), published Anti-Dumping Duty Order A-570-910 on Certain Circular Welded Carbon Quality Steel Pipe from the People's Republic of China. See 73 FR 42547. We note that whether the merchandise at issue is subject to antidumping orders is beyond the administrative authority of CBP. CBP is not charged with the administrative authority to ascertain nor impose antidumping orders. Such authority is within the purview of the ITA, who is not necessarily bound by a country of origin or classification determination issued by CBP with regard to the scope of antidumping orders or countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the ITA and are separate from tariff classification and origin rulings issued by CBP. You may contact the ITA at http://www.trade.gov/ia/ (click on “Contact Us”), or at 1-800-872-8723. For further information, you can also view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using the AD/CVD Search tool at http://www.cbp.gov (click on “Import” and “AD/CVD”).
HOLDING:
By application of GRI 1, the subject galvanized steel pipes are classified in subheading 7306.30.5032, HTSUS, which provides for “Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel: Other, welded, of circular cross section, of iron or nonalloy steel: Having a wall thickness of 1.65 mm or more: Other: Other: With an outside diameter not exceeding 114.3 mm: Galvanized: Other.” The applicable duty rate is free. The subject black pipes are classified in subheading 7306.30.5055, HTSUS, which provides for “Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel: Other, welded, of circular cross section, of iron or nonalloy steel: Having a wall thickness of 1.65 mm or more: Other: Other: Other: Other.” The applicable duty rate is free.
You are to mail this decision to the Internal Advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on CBP’s website, located at www.cbp.gov by means of the Freedom of Information Act and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division