OT:RR:CTF:CPMM: H303128 RRB
Mr. Joseph W. Rohe
Fox Rothschild LLP
2 W. Washington Street, Suite 1100
Greenville, SC 29601
Re: Modification of NY N301037; Classification of steel doctor blades in coils from Italy
Dear Mr. Rohe:
This is in response to your letter, dated February 21, 2019, in which you request reconsideration of New York Ruling Letter (“NY”) N301037 (“reconsideration request”), issued to you on November 7, 2018 by U.S. Customs and Border Protection (“CBP”), involving the classification of steel doctor blades in coils under the Harmonized Tariff Schedule of the United States (“HTSUS”). You submitted the reconsideration request on behalf of your client, Precision Flexo & Gravure, LLC (“Precision”). At issue in NY N301037 were six different types of steel doctor blades imported in coils: 1) PS1 coils in widths of 600 mm or more; 2) PS1 coils in widths of less than 600 mm; 3) PS2, PS3, and PS4 coils in widths of 600 mm or more; 4) PS2, PS3, and PS4 coils in widths of less than 600 mm; 5) PS INOX coils in widths of 600 mm or more; and 6) PS INOX coils in widths of less than 600 mm. In your reconsideration request, you submitted additional information about certain products described in NY N301037.
After reviewing the submitted information, we believe that NY N301037 is partially in error. For the reasons set forth below, we hereby modify NY N301037 with respect to the classification PS1 coils and PS INOX coils.
Pursuant to 19 U.S.C. § 1625(c)(1), a notice was published in the Customs Bulletin, Volume 54, No. 12 on April 1, 2020, proposing to modify NY N301037, and any treatment accorded to substantially similar transactions. One comment was received in response to this notice, which we will address below.
FACTS:
The steel doctor blades in coils at issue were described as follows in NY N301037:
The products under consideration are described as steel doctor blades intended to be used as parts for printing presses. The steel is imported in various chemistries and dimensions. It is stated to be cold-rolled in Sweden and shipped to Italy where the edges are ground. The final product has a ceramic coating and is shipped from Italy to the U.S. In accordance with the definitions of steel in Section XV, Harmonized Tariff Schedule of the United States (HTSUS), the chemistries are described as PS1 which is a nonalloy steel, PS2 and PS4 which are tool steel, PS3 which is an other alloy steel and PS INOX grade which is a stainless steel. Although stated to be imported custom made, the blades are flat-rolled steel in 200 meter coils that are imported without markings indicating at what length the doctor blades need to be cut for printing press use.
In NY N301037, CBP classified the steel doctor blades in coils as follows:
PS1 coils in widths of 600 mm or more in subheading 7210.90.9000, HTSUSA (Annotated), which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, clad, plated or coated: Other: Other: Other.”
PS1 coils in widths of less than 600 mm in subheading 7212.50.0000, HTSUSA, which provides for “Flat-rolled products or iron or nonalloy steel, of a width of less than 600 mm, clad, plated or coated: Otherwise plated or coated.”
PS2, PS3, and PS4 coils in widths of 600 mm or more in subheading 7225.99.0090, HTSUSA, which provides for “Flat-rolled products of other alloy steel, of a width of 600 mm or more: Other: Other: Other.”
PS2, PS3, and PS4 coils in widths of less than 600 mm in subheading 7226.99.0180, HTSUSA, which provides for “Flat-rolled products of other alloy steel, of a width of less than 600 mm: Other: Other: Other.”
PS INOX coils in widths of 600 mm or more in subheading 7219.90.00, HTSUS, which provides for “Flat-rolled products of stainless steel, of a width of 600 mm or more: Other.”
PS INOX coils in widths of less than 600 mm in subheading 7220.90.00, HTSUS, which provides for “Flat-rolled products of stainless steel, of a width of less than 600 mm: Other.”
However, commodity information sheets submitted with your reconsideration request show that only doctor blade material known as “Extra” and “Eco 1-6,” which is comprised of a PS4 base material, has a ceramic coating and that the PS INOX blade material contains less than 15 percent by weight of chromium.
ISSUE:
Whether steel doctor blades imported in coils that are not pre-marked for cutting at the time of importation are classified in headings of chapter 72, HTSUS, as iron and steel, or in heading 8443, HTSUS, as “Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; other printers, copying machines and facsimile machine, whether or not combined; parts and accessories thereof.”
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) is made in accordance with the General Rules of Interpretation (“GRI”). 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.
The 2019 HTSUS provisions under consideration are as follows:
7209 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated:
7210 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, clad, plated or coated:
7211 Flat-rolled products of iron or nonalloy steel, of a width of less than 600 mm, not clad, plated or coated:
7212 Flat-rolled products of iron or nonalloy steel, of a width of less than 600 mm, clad, plated or coated:
7219 Flat-rolled products of stainless steel, of a width of 600 mm or more:
7220 Flat-rolled products of stainless steel, of a width of less than 600 mm:
7225 Flat-rolled products of other alloy steel, of a width of 600 mm or more:
7226 Flat-rolled products of other alloy steel, of a width of less than 600 mm:
8443 Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; other printers, copying machines and facsimile machine, whether or not combined; parts and accessories thereof:
* * *
Section XV, note 1(f) states the following regarding base metals and articles of base metals:
This section does not cover:
* * *
f) Articles of section XVI (machinery, mechanical appliances and electrical goods);
Note 1(k) to chapter 72 states the following:
In this chapter and, in the case of notes (d), (e), and (f) below throughout the tariff schedule, the following expressions have the meanings hereby assigned to them:
* * *
k) Flat-rolled products
Rolled products of solid, rectangular (other than square) cross section, which do not conform to the definition at (ij) above, in the form of:
- coils of successively superimposed layers, or
- straight lengths, which if of a thickness less than 4.75 mm are of a width measuring at least 10 times the thickness or if of a thickness of 4.75 mm or more are of a width which exceeds 150 mm and measures at least twice the thickness.
Flat-rolled products include those with patterns in relief derived directly from rolling (for example, grooves, ribs, checkers, tears, buttons, lozenges) and those which have been perforated, corrugated or polished, provided that they do not thereby assume the character of articles or products of other headings.
Flat-rolled products of a shape other than rectangular or square, of any size, are to be classified as products of a width of
600 mm or more, provided that they do not assume the character of articles or products of other headings.
* * *
In understanding the language of the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN to 72.08 states the following, in relevant part:
Flat-rolled products of this heading may have patterns in relief derived directly from rolling, such as grooves, ribs, chequers, tears, buttons, lozenges, or they may have been worked after rolling (e.g., perforated, corrugated, bevelled or rounded at the edges), provided they do not thereby assume the character of articles or products of other headings.
* * *
It has been CBP’s longstanding position that parts of machinery, imported in unmarked material lengths, are classified according to their constituent material. See, e.g. Headquarters Ruling Letter (“HQ”) 965589, dated September 17, 2002 (classifying in heading 7211 and 7226, HTSUS, steel doctor blades with rounded edges and a polished surface that were used in printers and imported in coils) and HQ 963309, dated May 31, 2000 (classifying plastic doctor blades imported in coils and used in machinery for making paper pulp, paper or paperboard in chapter 39, HTSUS, based on its constituent material). Moreover, we have historically classified all steel doctor blades imported in coil form within chapter 72, HTSUS, regardless of the operations performed subsequent to the rolling process. See, e.g., HQ 965589; NY D82766, dated October 9, 1998 (classifying steel doctor blades imported in coils, which were ceramic-coated and beveled along their length subsequent to the flat-rolling operation, in heading 7212, HTSUS); NY A88253, dated November 6, 1996 (classifying steel doctor blades that are zinc-coated and machine-beveled along their length, and imported in continuous coils that are cut to length after importation, in chapter 72, HTSUS). In each of these instances, the doctor blades were imported in coiled material lengths, and neither beveling, nor additional coating or polishing performed on the steel after flat-rolling precluded classification as a flat-rolled product of chapter 72, HTSUS. Both NY N301037 and HQ 965589 cite to Heraeus-Amersil v. United States, 640 F. Supp. 1331 (C.I.T. 1986) as further support of CBP’s longstanding position. The rule of decision in Heraeus is that “. . .where such articles are imported in the piece and nothing remains to be done except to cut them apart, they shall be treated for dutiable purposes as if already cut apart and assessed according to their individual character or identity. This follows, however, only in case the character or identity of the individual articles is fixed with certainty and in case the . . .piece in its entirety is not commercially capable of any other use.” As we explained in NY N301037, the Heraeus rule is not satisfied here because the doctor blades are not identifiable in the coiled materials as there are no markings on the steel to indicate where individual blades are to be cut— i.e., the blades are not “fixed with certainty.”
While Precision downplays the Heraeus rule, relying on cases such as U.S. v. Buss & Co., 5.C.C.A. 110 (1914), which is over one hundred years old, involving different merchandise, these arguments are without merit. For example, Precision cites to Doherty-Barrow of Texas v. United States, 3 C.I.T. 228 (1982), where the court stated that “[e]xcept for cutting to length, the subject merchandise requires no additional processing, manufacturing or finishing. . .the character or identity thereof, except for cutting to length, is fixed with certainty.” Doherty-Barrow, 3 C.I.T. at 232. However, Precision omits the court’s further exposition in regards to why the bale ties in Doherty-Barrow were deemed to be fixed with certainty; the court further explained that “[f]or a bale tie to be ‘made from’ strip under item 642.93, TSUS, some manufacturing process is implied which transforms strip steel into bale ties, whether finished or unfinished. Both finished and unfinished manufactured products must be sufficiently processed to a point where they possess characteristics distinguishing them from which they are made” (citing American Import Co. v. United States, 26 C.C.P.A. 72, 75-6 (1938)). The bale ties at issue in Doherty-Barrow were in conformance with rigid specifications for American standard cotton bale ties, including chemical composition and tensile strength. Doherty-Barrow, 3 C.I.T. at 232. Unlike the bale ties in Doherty-Barrow, such specifications are not required for the manufacture of doctor blades for use in printing machinery. Accordingly, Doherty-Barrow is irrelevant to the subject doctor blades.
In addition, Precision cites to J.E. Bernard & Co., Inc. v. United States, 50 Cust. Ct. 41 (1963), which involved the classification of steel bandsaw blades imported in coils. Precision argues that the imported steel doctor blades are similar to the merchandise in that case, which were classified as finished bandsaws rather than as its constituent material. However, Precision simplifies its characterization of the blades in J.E. Bernard as merely involving imported blades that were coiled into different lengths and cut to length after importation. In fact, prior to importation, the steel bandsaws in J.E. Bernard consisted of heavily manufactured steel strips that underwent a milling process in which teeth were cut into the strips, which were then electronically heat treated through a tempering process to harden the metal, after which the material was polished and the teeth were given a “waving set” to meet requirements for use, followed by oiling and coiling the strips into specific lengths, all of which happened prior to importation. J.E. Bernard, 50 Cust. Ct. at 43. Thus, the operations rendered on the steel bandsaws in J.E. Bernard go far beyond the comparatively simple workings applied to the subject steel doctor blade coils (e.g., skiving, beveling, etc.) such that the character of the steel bandsaws imported in coils were “fixed with certainty.’ Accordingly, J.E. Bernard is not dispositive to the classification of the doctor blades at issue.
Precision cites to note 1(f) of section XV (base metal and articles of base metals), which excludes articles of section XVI (machinery, mechanical appliances and electrical goods) and includes articles of heading 8443. Precision also cites to note 1(k) of chapter 72, which defines flat-rolled products as “rolled products of solid rectangular (other than square) cross section. . .” Precision argues that the doctor blades are not of rectangular cross section, but rather of customized rounded, beveled and lamella edges to effect their use as doctor blades. However, note 1(k) to chapter 72 also states that flat-rolled products of chapter 72 may be perforated, corrugated or polished, provided they do not assume the character of articles of other headings. This is expanded upon in the ENs to heading 72.08, which lists other examples of operations that may be performed on flat-rolled products subsequent to the rolling process: “Flat-rolled products of this heading may have patterns in relief derived directly from rolling, such as grooves, ribs, chequers, tears, button, lozenges, or they may have been worked after rolling (e.g., perforated, corrugated, beveled or rounded at the edges), provided they do not thereby assume the character of articles or products of other headings.” The lamella and wing lamella edges at issue here are achieved through skiving. Even though the ENs do not expressly mention this kind of operation, it does not mean that skiving should not be included as an example of operations performed on flat-rolled products of chapter 72. Accordingly, the doctor blade materials at issue meet the definition of a flat-rolled product for purposes of classification in chapter 72.
Precision also argues that GRI 2(a), which provides that “[a]ny reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article,” applies to its merchandise. However, Precision’s argument is without merit, as the doctor blades are specifically provided for in chapter 72 under the terms of the headings and chapter notes therein and as imported in coils, do not have the essential character of a doctor blade
While NY N301037 properly classified the doctor blades in headings of chapter 72, the ruling needs to be modified with respect to the classification of the PS1 uncoated coils. Because the submitted commodity information sheet clarifies that only Extra and Eco1-6 blade material comprised of a PS4 base material is ceramic-coated, the uncoated PS1 coils in widths of less than 600 mm are properly classified in subheading 7211.90.0000, HTSUSA (Annotated), which provides for “Flat-rolled products of iron or nonalloy steel, of a width of less than 600 mm, not clad, plated or coated: Other.” Uncoated PS1 coils in widths of 600 mm or more are properly classified in subheading 7209.90.0000, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated: Other.”
Lastly, after receiving the information in your request for reconsideration regarding the chemistry of the merchandise, we are modifying NY N301037 to now state the correct 10-digit classification of the PS INOX stainless steel grade blade material. Based on that information, the PS INOX coils, in widths of less than 600 mm, are properly classified at the 10-digit level in subheading 7220.90.0060, HTSUSA, which provides for “Flat-rolled products of stainless steel, of a width of less than 600 mm: Other: Other: Containing less than 15 percent by weight of chromium.” The PS INOX coils in widths of 600 mm or more are properly classified at the 10-digit level in subheading 7219.90.0060, HTSUSA, which provides for “Flat-rolled products of stainless steel, of a width of 600 mm or more: Other: Other: Other: Containing less than 15 percent by weight of chromium.” The remaining analysis of NY N301037 remains unchanged.
You submitted comments on behalf of your client in response to the notice of proposed revocation of NY N301037. In your comments, you first argue that CBP inaccurately concluded that the lamella and wing lamella edges are attained by skiving. You assert that the lamella and wing lamella edges are attained through precision grinding with a disk and conical honing wheels at precise angles and pursuant to a patented process. We have reviewed the patented precision grinding process that you have set forth as an exhibit to your comments. The patent explains that the lamella edges are “obtained by means of a grinding wheel having its axis of rotation not at right angles to the edge of the doctor blade.” The patent further states that “[a] method of producing the above-mentioned doctor blade—starting from a band—also forms the subject matter of the present invention and comprises at least the steps of: positioning above the band a grinding wheel with its axis of rotation not at right angles to the edge of the doctor blade; setting the grinding wheel in rotation; and causing the band to move beneath the grinding wheel parallel to its edge.” Essentially, the precision grinding described in the patent is akin to power skiving, a common operation performed on doctor blades after flat-rolling that does not change the character of the merchandise. Like the precision power grinding process described in your submission, power skiving also involves the use of a wheel to cut or grind down the steel. Whether through power skiving or precision power grinding, the basic operation for attaining the doctor blade edges involves a disk, grinding wheel, or other cutting tool to shape the blade—processing which is similar to those described in the EN to 72.08, interpreting note 1(k) to chapter 72, HTSUS. Therefore, your claims concerning the power precision grinding process does not alter our conclusions regarding the classification of the doctor blades.
Next, you argue that CBP ignored the limitations of note 1(k) and expanded the EN to 72.08. You further explain that note 1(k) specifically omits the examples of beveled or rounded edges found in the ENs and that such omission was intentional. However, we specifically noted that the ENs are not legally binding and can neither increase nor decrease the scope of the heading. Rather, they are intended to define and explain the scope of the heading. Allowing for beveling and rolling in the heading as an example of a permissible process in the EN in no way contradicts the examples given in the legal note. We, therefore, are not persuaded by your argument regarding the language of the note in relation to the EN.
Moreover, you explain in your comments that the doctor blades cannot be classified in chapter 72, HTSUS, because they “have assume[d] the character of articles or products of other headings” and therefore are excluded from chapter 72 pursuant to note 1(k) to chapter 72 and the ENs. You argue that they have assumed the character of doctor blades because of the exacting specifications and tolerances of the merchandise, as well as the precision methods used to impart certain specifically-designed edges. Your further claim, without any support, that the merchandise in unmarked coils would be clearly identifiable as doctor blades to “anyone familiar with the industry.” However, the imported coiled materials at issue have no markings on the steel to indicate where individual doctor blades are to be cut, and none of the operations performed on the steel to produce certain defined edges go beyond the types of operations described in note 1(k) to chapter 72 and the ENs to 72.08. Therefore, this argument is unpersuasive.
Finally, you assert that CBP failed to appropriately analyze and apply legal precedent in relying on Heraeus-Amersil v. U.S., while discounting the cases cited in your February 21, 2019 reconsideration request. This assertion, however, is incorrect as we explained in our proposed ruling why the cases you cited are not dispositive to the classification of the steel doctor blades in coils.
HOLDING:
By application of GRIs 1 and 6, the uncoated PS1 coils in widths of less than 600 mm are classified in heading 7211, HTSUS, and specifically in subheading 7211.90.0000, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of less than 600 mm, not clad, plated or coated: Other.” The 2019 column one, general rate of duty is Free.
By application of GRIs 1 and 6, the uncoated PS1 coils in widths of 600 mm or more are classified in heading 7209, HTSUS, and specifically in subheading 7209.90.0000, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated: Other.” The 2019 column one, general rate of duty is Free.
By application of GRIs 1 and 6, the PS INOX coils that are imported in widths of less than 600 mm are classified in heading 7220, HTSUS, and specifically in subheading 7220.90.0060, HTSUSA, which provides for “Flat-rolled products of stainless steel, of a width of less than 600 mm: Other: Other: Containing less than 15 percent by weight of chromium.” The 2019 column one, general rate of duty is FREE.
By application of GRIs 1 and 6, the PS INOX coils that are imported in widths of 600 mm or more are classified in heading 7219, HTSUS, and specifically in subheading 7219.90.0060, HTSUSA, which provides for “Flat-rolled products of stainless steel, of a width of 600 mm or more: Other: Other: Other: Containing less than 15 percent by weight of chromium.” The 2019 column one, general rate of duty is FREE.
On March 8, 2018, Presidential proclamations 9704 and 9705 imposed additional tariffs and quotas on a number of steel and aluminum mill products. Exemptions have been made on a temporary basis for some countries. Quantitative limitations or quotas may apply for certain exempted countries and can also be found in Chapter 99. Additional duties for steel of 25 percent and for aluminum of 10 percent are reflected in Chapter 99, subheading 9903.80.01 for steel and subheading 9903.85.01 for aluminum. Products classified under subheading 7209.90.00, 7211.90.00, 7219.90.00, and 7220.90.00, HTSUS, may be subject to additional duties or quota. At the time of importation, you must report the Chapter 99 subheading applicable to your product classification in addition to the Chapter 72, 73 or 76 subheading listed above. The Proclamations are subject to periodic amendment of the exclusions, so you should exercise reasonable care in monitoring the status of goods covered by the Proclamations and the applicable Chapter 99 subheadings.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N301037, dated November 7, 2018, is hereby modified with respect to the classification of the uncoated PS1 doctor blade material in coils and to clarify the 10-digit classification of the PS INOX doctor blade material.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
for
Craig T. Clark, Director
Commercial and Trade Facilitation Division