CLA-2 OT:RR:CTF:TCM H251149 HvB
TARRIF NO.: 7304.29.1010
Darlene E. DiBernardo
Senior Trade Analyst
A.N. Deringer, Inc.
173 West Service Road
Champlain, NY 12919
RE: Request for classification on casing pipe intended to be imported into the United States on a temporary basis
Dear Ms. DiBernardo:
We are writing in response to your correspondence dated January 28, 2014, concerning the ruling request you filed on behalf of your client, Absolute Completion Technologies (ACT) with the National Commodity Specialist Division (NCSD) of U.S. Customs and Border Protection (CBP). Your request was forwarded to us for a response. In your letter, you request a determination as to the classification under the Harmonized Tariff System of the United States (HTSUS) of casing pipes to be imported through the Port of Los Angeles on a temporary basis, for further processing and then exported.
FACTS:
The subject merchandise is described as threaded and coupled steel casing pipe, grade L-80. The L-80 grade is shown in the American Petroleum Institute (API) specifications for 5CT casing pipe. You state that the casing will be imported in either 30 or 38 foot joints or lengths. In an email to CBP, you confirmed the dimensions of the pipes as follows:
The 30 foot joints have an outside diameter of 88 millimeters (mm) and a wall thickness of 6.45 mm with External Upset End (EUE) pipe threads.
The pipe imported in 38 foot lengths has an outside diameter of 127 mm and a wall thickness of 9.19 with Extreme-Line (XL) thread. You explain that XL thread is a very bold, standard API thread.
You state that ACT intends to import China-origin steel casing pipe from Singapore into the United States, where it will undergo a process called mill slot perforation. The merchandise is sent to Tryad Service Corporation (“Tryad”) in Shafter, California, where it undergoes mill slot perforation through the use of multi-spindle milling machines for slotted liner and round hole drilling machines to drill base pipe. You state that Tryad can customize the slot perforation using different patterns, with slot size capabilities ranging from 0.012” to 0.500” and ¼” – ½” round holes. Once the pipes undergo mill slot perforation at Tryad’s facility in California, they are subsequently exported to the end user in India to be used in oil and gas pipelines.
ISSUE
Whether the instant casing is properly classified under subheading 7304.29.1010, HTSUS, as “Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: Casing, tubing and drill pipe, of a kind used in drilling for oil or gas: threaded or coupled: having an outside diameter less than 215.9 mm.”
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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.
Provided the pipe has the physical characteristics stated in the facts above, the only 2014 HTSUS provision at issue is as follows:
7304 Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel:
Casing, tubing and drill pipe, of a kind used in drilling for oil or gas:
7304.29 Other:
Casing
Of iron or nonalloy steel
7304.29.10 Threaded or coupled
7304.29.10 Having an outside diameter less than 215.9 mm
7304.29.10.10 Having a wall thickness less than 12.7 mm
* * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), constitute the official interpretation of the Harmonized System at the international level. While neither 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 the headings. It is CBP’s practice to consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 73.04 states, in pertinent part:
Subheading Explanatory Notes.
Subheadings 7304.11, 7304.19, 7304.22, 7304.23, 7304.24 and 7304.29
These subheadings cover all such articles irrespective of the standards or technical specifications which they meet (e.g., American Petroleum Institute (API) standards 5L or 5LU for line pipe and API standards 5A, 5AC or 5AX for casing, tubing and drill pipe).
* * *
As described, the instant merchandise is steel casing pipe that is used for drilling for oil or gas. It therefore meets the terms of subheading 7304.29, HTSUS.
In subsequent emails with NCSD, you confirmed the characteristics of the pipe, including the outside diameter of the 30 and 38 foot casings lengths to be 88 mm and 127 mm, respectively. In addition, you confirmed the wall thickness to be less than 12.7 mm, and that the pipe is to be threaded. Furthermore, the pipe is said to meet specifications for API 5CT casing pipe. Therefore, the merchandise is classifiable in subheading 7304.29.1010, HTSUS, under the terms of that provision and subheading note to EN 73.04.
Finally, in your inquiry, you ask whether the bond amount for the TIB must account for any antidumping or countervailing duties that would be owed. CBP has previously explained that, “TIB entries of merchandise are not consumption entries, and although AD/CVD to which the imported merchandise is subject need not be deposited, the TIB bond should be set in an amount to take into account any AD/CVD in order to protect the revenue.” HQ 229970 (Aug. 11, 2003) (citation omitted).
HOLDING:
By application of GRI 1, HTSUS, the subject casing pipe is classified under heading 7304, HTSUS, specifically under subheading 7304.29.1010, HTSUS, which provides for “Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: Casing, tubing and drill pipe, of a kind used in drilling for oil or gas: threaded or coupled: having an outside diameter less than 215.9 mm.” The general, column one rate of duty is Free.
Duty rates are provided for the internal advice applicant’s 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.
A copy of this decision should be filed with the port of entry at the time of entry.
Sincerely,
Myles B. Harmon, Director
Commercial & Trade Facilitation Division