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HQ 082330


September 19, 1988

CLA-2:CO:R:C:G 082330 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 607.9020; 7219.32.0010

John R. Pope
William M. Orr Company, Inc.
2600 Freedland Road
West Middlesex, Pennsylvania 16159

RE: Classification and Duty Drawback on Stainless Steel Sheet in Coils

Dear Mr. Pope:

In your letter of May 18, 1988, you inquire as to the tariff classification and applicability for duty drawback of stainless steel sheet in coil.

FACTS:

Stainless steel sheet in coil form, from the U.K., Mexico or Canada, is the subject of this inquiry. You informed us by telephone that the merchandise is a cold rolled stainless product imported in 36, 42, 48, and 60 in. widths. It has a maximum thickness of 0.135 in. and a minimum thickness of 0.015 in. This merchandise will be exported from Canada to your facility where it will be uncoiled, leveled or flattened, and cut to sheet metal lengths of 120 in. to 144 in. or more. Alternatively, the product will be uncoiled and slit to smaller widths, then re-coiled. In both cases, the merchandise will be exported to Canada after processing and warehoused for eventual sale to end users.

ISSUE(S):

Is the imported merchandise classifiable as a basic shape or form of iron or steel? Is it eligible for duty drawback, or may it enter free of duty under bond?

LAW AND ANALYSIS:

For tariff purposes, sheets are flat rolled products whether or not corrugated or crimped, in coils or cut to length, under 0.1875 inch in thickness and over 12 inches in width. Note the definition of Plates and sheets in Schedule 6, Part 2, Subpart B, Headnote 3(g), Tariff Schedules of the United States (TSUS).

In its condition as imported, the merchandise in question is classifiable under the provision for plates and sheets of stainless steel, pickled or cold rolled, in item 607.9020, Tariff Schedules of the United States Annotated (TSUSA), dutiable at the rate of 10 percent ad valorem, plus additional cumulative duties on the alloying elements, by weight, speci- fied in Schedule 6, Part 2, Subpart B, Headnote 4, TSUS.

There is insufficient information to issue a binding ruling on whether the cutting or slitting operations would qualify the product for drawback. It is unlikely that the cut or slit steel could be considered to be in the same condition as imported because cutting and slitting are beyond the incidental operations allowable under 19 U.S.C. 1313(j). While the cutting and slitting change the condition of the steel, neither operation appears to be a manufacture or production, as required for eligibility for manufacturing drawback under 19 U.S.C. 1313(a). In order to be a manufacture or production for drawback purposes, a new article must result, one having a new name, use, or characteristic.

However, articles to be repaired, altered, or processed (including processes which result in articles manufactured in the United States), may be eligible for duty-free entry under bond, in item 864.05, TSUS, upon compliance with applicable headnotes in Schedule 8, Part 5, Subpart C, TSUS.

HOLDING:

The stainless steel sheets in coil are classifiable in item 607.9020, TSUSA, as indicated.

The Harmonized Tariff Schedule of the United States Annotated (HTSUSA), is scheduled to replace the TSUS as the tariff code of the United States on January 1, 1989. The

HTSUSA provision applicable to stainless steel sheets in coil form is Flat-rolled products of stainless steel, not further worked than cold-rolled, in subheading 7219.32.0010 if of a thickness of 3 mm or more but less than 4.75 mm; in subheading 7219.33.0010 if of a thickness exceeding 1 mm but less than 3 mm; or in subheading 7219.34.0010 if of a thickness of 0.5 mm or more but not exceeding 1 mm. Merchandise classifiable in these subheadings may be subject to an additional duty under subheading 9903.72.00. This represents Customs current position on the classification of this merchandise. However, if there are changes in these provisions prior to the date the HTSUSA becomes effective, this advice may not continue to apply.

Merchandise from Mexico and the U.K. classifiable in item 607.9020, TSUSA, may be covered by steel arrangements the United States has with those countries. We are referring a copy of your letter, and this response, to the International Trade Administration, Import Administration, Office of Agree- ments Compliance, Department of Commerce, Washington, D.C. 20230. That office will correspond directly with you in this regard.

The stainless steel sheets in coil may be eligible for entry free of duty under bond, in item 864.05, TSUS, upon compliance with the applicable headnotes. If this merchandise is covered by a steel arrangement, an export certificate will be required at the time of entry. The described processing operations in the United States will not result in a substan- tial transformation of the imported merchandise. Therefore, assuming the requirements for entry under item 864.05 are met, upon satisfactory proof of exportation to Canada you may apply to have the quantity exported recredited to your allocation under the particular steel arrangement. The Office of Agree- ments Compliance will provide more information on this pro- cedure.

We are enclosing for your reference materials on Customs drawback and temporary importation under bond (T.I.B.) procedures, as well as copies of all cited provisions.

Sincerely,

John Durant, Director

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