OT:RR:CTF:CPMM
H321350 AAK/MMM
TARIFF NO: 7608.20.0030, 9817.00.9080, 9903.85.01
Mr. Paul Vroman
DHL Global Forwarding
2660 20th Street
Port Huron, MI 48059
RE: Request for Binding Ruling; Classification of seamless 3003 alloy aluminum tubular cores
Dear Mr. Vroman:
This is in response to your request of May 28, 2019, on behalf of your client, Lexmark International, Inc., to the Director, National Commodity Specialist Division, Customs and Border Protection (CBP), for a binding ruling regarding the classification of seamless 3003 alloy aluminum tubular cores imported from a Foreign Trade Zone (FTZ) under the Harmonized Tariff Schedule of the United States (HTSUS). Your request was forwarded to our office for reply, which is set forth below.
FACTS:
The subject merchandise are seamless 3003 alloy aluminum tubular cores. They were originally shipped to a FTZ to be manufactured into photoconductor drums. At one of three stages in the manufacture process, however, the cores were deemed unfit as photoconductor drums for various reasons. As raw aluminum, the cores can be unfit from damage such as dents or scratches, size issues, and other quality problems. Once anodized, the cores can be unfit due to the same damage, anodization issues such as non-uniform application, process failure, or incorrect settings, and other quality problems. After being coated, the cores can be unfit for similar damage, previously uncaught quality problems, and non-recoverable coating defects. Moreover, coated cores would only be deemed unfit if the defect cannot be reversed through a stripping process. However unfit, the subject cores are stored in a scrap metal collection bin and eventually sold and imported from the FTZ to a local scrap metal processing company, which will re-melt the cores to recover their metal content for production into other aluminum products.
ISSUE:
Whether the instant seamless 3003 alloy aluminum tubular cores are classified in heading 7602, HTSUS as “Aluminum waste and scrap”; in heading 7608, HTSUS as “Aluminum tubes and pipes”; or in subheading 9817.00.90, HTSUS as “articles of metal . . . to be used in remanufacture by melting . . .: Other.”
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings 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 or notes do not require otherwise, the remaining GRIs 2 through 6 may be applied.
The HTSUS provisions under consideration are as follows:
7602: Aluminum waste and scrap:
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7608: Aluminum tubes and pipes:
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Unwrought metal including remelt scrap ingot (except copper, lead, zinc and tungsten) in the form of pigs, ingots or billets (a) which are defective or damaged, or have been produced from melted down metal waste and scrap for convenience in handling and transportation without sweetening, alloying, fluxing or deliberate purifying, and (b) which cannot be commercially used without re-manufacture; relaying or rerolling rails; and articles of metal (except articles of lead, of zinc or of tungsten, and not including metal-bearing materials provided for in section VI, chapter 26 or subheading 8548.10 and not
including unwrought metal provided for in chapters 72-81) to be used in remanufacture by melting or to be processed by shredding, shearing, compacting or similar processing which renders them fit only for the recovery of the metal content:
9817.00.90: Other:
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Note 8(a) to Section XV defines “waste” and “scrap” as follows:
Metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons.
Note 1(e) to Chapter 76 defines “tubes” and “pipes” as follows:
Hollow products, coiled or not, which have a uniform cross section with only one enclosed void along their whole length in the shape of circles, ovals, rectangles (including squares), equilateral triangles or regular convex polygons, and which have a uniform wall thickness. . . . Tubes and pipes of the foregoing cross sections may be polished, coated, bent, threaded, drilled, waisted, expanded, cone-shaped or fitted with flanges, collars or rings.
Additional U.S. Note 1 to Section XV provides:
For the purposes of this section, the term "unwrought" refers to metal, whether or not refined, in the form of ingots, blocks, lumps, billets, cakes, slabs, pigs, cathodes, anodes, briquettes, cubes, sticks, grains, sponge, pellets, flattened pellets, rounds, rondelles, shot and similar manufactured primary forms, but does not cover rolled, forged, drawn or extruded products, tubular products or cast or sintered forms which have been machined or processed otherwise than by simple trimming, scalping or descaling.
U.S. Note 1 to Chapter 98 provides:
The provisions of this chapter are not subject to the rule of relative specificity in general rule of interpretation 3(a). Any article which is described in any provision in this chapter is classifiable in said provision if the conditions and requirements thereof and of any applicable regulations are met.
Statistical Note 1 to Subchapter XVII of Chapter 98 states:
For statistical reporting of merchandise under subheading[] … 9817.00.90 …:
(a) Report the 8-digit number (or 10-digit number, if any) found in this subchapter in addition to the 10-digit number appearing in chapters 1-97 which would be applicable but for the provisions of this subchapter; and
(b) The quantities reported should be in the units provided in chapters 1-97.
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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 these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The General EN to Chapter 76 states, in pertinent part:
The special properties of aluminum and its alloys favour their wide use: in the aircraft, automobile or shipbuilding industries; in the building industry; in the construction of railway or tramway rolling-stock; in the electrical industry (e.g., as cables); for all types of containers (reservoirs and vats of all sizes, transport casks, drums, etc.); for household or kitchen utensils; for the manufacture of foil; etc.
EN 76.02 provides, in pertinent part:
The provisions concerning waste and scrap in the Explanatory Note to heading 72.04 apply, mutatis mutandis, to this heading.
EN 72.04 provides, in pertinent part:
But the heading excludes articles which, with or without repair or renovation, can be re-used for their former purposes or can be adapted for other uses; it also excludes articles which can be refashioned into other goods without first being recovered as metal. Thus, it excludes, for example, structural steelwork usable after renewal of worn-out parts; worn railway lines which are usable as pitprops or may be converted into other articles by re-rolling; steel files capable of re-use after cleaning and sharpening.
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Classification in Chapter 76, HTSUS
In your request for a binding ruling, you question whether the seamless 3003 alloy aluminum tubular cores are classifiable in heading 7602, HTSUS as “Aluminum waste and scrap.” As the terms “waste” and “scrap” are defined, however, the cores cannot be considered as such under heading 7602, HTSUS. Rather, the cores are classifiable within heading 7608, HTSUS as “Aluminum tubes and pipes.”
The seamless 3003 alloy aluminum tubular cores are not aluminum waste and scrap under heading 7602, HTSUS. Note 8(a) to Section XV defines aluminum waste and scrap as either “[m]etal waste and scrap from the manufacture or mechanical working of metals,” or “metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons.” EN 72.04 elaborates that aluminum waste and scrap under heading 7602 is an article that cannot be reused for its former purpose or adapted for other uses, and cannot be refashioned into other goods without first being recovered as metal. In short, under heading 7602, HTSUS aluminum waste and scrap is so useless that it serves no purpose other than being recoverable as metal content. The cores at issue here do not fit this description, however, as at no stage in the photoconductor drum-creation process are the cores ever so useless. As explained in the General EN to Chapter 76, the special properties of aluminum alloy favor their wide use in a range of industries. Indeed, the cores as pictured in your request appear in fine shape to serve many conceivable purposes, such as pipes or the walls of a tubular container, for example. Accordingly, the cores are not classifiable as aluminum waste and scrap under heading 7602, HTSUS.
That you and a local scrap company may believe the cores are scrap is irrelevant for purposes of this legal analysis. In HQ 963790, dated January 29, 2001, we clarified in a protest concerning another HTSUS waste and scrap provision:
The fact that both the foreign exporter and the protestant regard this merchandise as waste and scrap does not satisfy the legal requirement that the merchandise be worn-out, no longer fit for its original use, and fit only for the recovery of the metal content. Customs is obligated to classify and assess duty on merchandise in its condition as imported.
CBP has consistently followed the long-standing classification principle stated by the Supreme Court: “The rule is well established that in order to produce uniformity in the imposition of duties, the dutiable classification of articles imported must be ascertained by an examination of the imported article itself, in the condition in which it is imported.” United States v. Citroen, 223 U.S. 407, 414-15, 32 S. Ct. 259, 56 L.Ed. 486 (1911) (quotation marks omitted). As explained above, the cores at issue in their imported condition are fit for purposes beyond the recovery of their metal content, and are not classifiable as aluminum waste and scrap under heading 7602, HTSUS.
Instead, the seamless 3003 alloy aluminum tubular cores are classifiable under heading 7608, HTSUS. Coated or uncoated, the cores are hollow products with a uniform cross section with only one enclosed void along their whole length in the shape of a circle, and appear to have a uniform wall thickness. According to Note 1(e) to Chapter 76, therefore, the cores are classifiable as aluminum tubes and pipes under heading 7608, HTSUS.
Classification in Heading 9817, HTSUS
In addition to heading 7608, HTSUS, the seamless 3003 alloy aluminum tubular cores are potentially classifiable under subheading 9817.00.90, HTSUS. As described above, subheading 9817.00.90, HTSUS encompasses three categories of goods: (1) certain unwrought metal pigs, ingots or billets; (2) relaying or rerolling rails; and (3) with certain exceptions not relevant here, articles of metal to be used in remanufacture by melting or to be processed by shredding, shearing, compacting or similar processing which renders them fit only for the recovery of the metal content. Additional U.S. Note 1 to Section XV establishes that the term “unwrought” does not cover tubular products, and so the cores do not fall under the first category of goods. The cores similarly do not fall under the second category of goods as relaying or rerolling rails. But the cores fall in the third category of goods as articles of metal to be used in remanufacture by melting at the time of importation from the FTZ to the local scrap metal company. Thus, the seamless 3003 alloy aluminum tubular cores are prima facie classifiable under subheading 9817.00.90, HTSUS.
To qualify for classification under subheading 9817.00.90, HTSUS, however, a number of requirements under the Code of Federal Regulations (CFR) must be met.
First, under 19 CFR § 54.6, merchandise meeting the above-identified provision of subheading 9817.00.90, HTSUS shall be admitted duty-free subject to the following conditions, as applicable:
(1) In connection with the entry there shall be filed a statement of the importer that the intended use of the merchandise is one of the uses provided for in the subheading;
(2) A bond, as required in 19 CFR 54.6(b) and 113.62, is filed;
(3) Liquidation of the entry shall be suspended pending proof of use or other disposition of the merchandise within 3 years from the date of entry;
(4) Within 3 years from the date of entry, the importer shall submit to the director of the port of entry a statement from the superintendent or manager of the plant at which the articles were used in remanufacture by melting, or were processed by shredding, shearing, compacting, or similar processing showing the information listed in 19 CFR 54.6(c)(1) through (4)[; and]
(5) If satisfactory proof of use of the articles in remanufacture as required is furnished within 3 years from the date of entry, the entry shall be liquidated without duty on the covered articles; if not, the entry shall be liquidated without any exemption from duty under subheading 9817.00.90, HTSUS.
Second, as subheading 9817.00.90, HTSUS contains the language “to be used,” it is an actual use provision. Classification of an article within an actual use provision is controlled by the article’s actual use, and three conditions under 19 CFR § 10.133 must be met: 1) the use is intended at the time of importation; 2) the article is so used; and 3) proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption.
Upon compliance with 19 CFR. § 54.6 and 19 CFR § 10.133, the seamless 3003 alloy aluminum tubular cores are classifiable under subheading 9817.00.90, HTSUS.
HOLDING:
By application of GRI 1, the seamless 3003 alloy aluminum tubular cores are classifiable in heading 7608, HTSUS, specifically subheading 7608.20.0030, HTSUS, which provides for “Aluminum tubes and pipes: Of aluminum alloys: Seamless.” The 2020 column one, general rate of duty is 5.7% ad valorem.
Provided the requirements of 19 CFR. § 54.6 and 19 CFR § 10.133 are met, the seamless 3003 alloy aluminum tubular cores are also classifiable in subheading 9817.00.90, HTSUS, specifically subheading 9817.00.9080, HTSUS, which provides for “articles of metal . . . to be used in remanufacture by melting . . .: Other: Other,” at the importer’s option. Should the importer choose to classify the instant merchandise under this subheading, it must comply with the requirements of 19 CFR. § 54.6, 19 CFR § 10.133, and Statistical Note 1 to Subchapter XXII of Chapter 98, HTSUS to qualify for duty-free treatment.
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 7608.20.0030, 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 are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided online at http://www.usitc.gov/tata/hts/. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
for
Craig T. Clark, Director
Commercial and Trade Facilitation Division