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HQ 952863




JULY 21 1993

CLA-2:CO:R:C:M 952863 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7225.90.00

Vincent Bowen, Esq.
Willkie Farr & Gallagher
1155 21st. Street, N.W.
Washington, D.C. 20036-3384

RE: Alloy Steel Plates, Steel Circles; Bevelling and Perforating; Liquid Propane Gas Tank Components; Unfinished Tank Bodies; Headings 7309, 7310, 7311; GRI 2(a), HTSUS; Parts of Railway Rolling Stock; Additional U.S. Rule 1(c); Heading 8607;
NY 879033 Modified

Dear Mr. Bowen:

In a letter dated November 12, 1993, on behalf of Primary Steel, Inc., you request reconsideration of a ruling you recently received from the Area Director of Customs, New York Seaport. The merchandise in issue is alloyed steel plates and circles from Brazil. A meeting was held in our office on April 19, 1993, which you confirmed in a May 21, 1993, submission.

For reasons of confidentiality, photographs and other visual representations of the merchandise and the processing operations are not available.

FACTS:

NY 879033, dated November 6, 1992, addressed the tariff status of hot-rolled bevelled and perforated steel plates and steel circles torch cut from hot-rolled plate, for use in fabricating liquid propane gas tanks and rail car tanks. The ruling stated the plate was nonalloyed. The merchandise was found to be classifiable under the provision for other flat- rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated, in subheading 7208.90.00, Harmonized Tariff Schedule of the United States (HTSUS).

As imported, the steel plates are rectangular, from 328 to 378 inches long and 93 to 147 inches wide. Both the longitudinal - 2 -
edges and the lateral edges of these plates are resquared and bevelled at precise angles to form a trapezoidal shape. The circles are torch cut from plate to dimensions ranging from 0.450 to 0.780 inches in thickness and from 135.3125 to 147 inches in diameter. The steel's alloy content is specified in the May 21 submission. The steel is considered alloyed for tariff purposes because it has a minimum of 0.05 percent, by weight, of titanium. The plates to be used in the liquid propane tanks are perforated by a hole drilling machine to accommodate pipes in precise locations required by the tank assemblers. This is the condition of the merchandise as imported.

After importation, the steel circles are flanged and formed into dish-shaped tank heads. The rectangular-shaped plates are bent laterally on a rolling machine to form rings, with the two bevelled lateral edges touching. The lateral edges are then computer-welded at the junction and the space created where the beveled ends meet is filled in with welding material. The resulting rings are then cleaned and painted. A tank cylinder may require from 1 to 6 rings, depending on tank size. For the larger tanks, the rings are welded together along their bevelled, longitudinal edges. The tank heads are then assembled to the top and bottom of the body cylinders to complete the tank. The tank assemblers then fit the tanks with pipes, valves and other fittings, and supports such as manways and ladders, depending on their ultimate use.

You state that for convenience in transport and ease in handling, the requirements of several U.S. tank assemblers are imported bundled together. After importation, the various components are separated and shipped to individual assemblers.

You maintain that under General Rule of Interpretation (GRI) 2(a), HTSUS, the rectangular steel plates and circles, entered unassembled, are unfinished articles having the essential character of complete or finished tanks of headings 7309, 7310, 7311, or are unfinished steel articles of heading 7326. At the April 19 meeting, you argued, among other things, that in the context of the HTSUS, by virtue of bevelling and perforating, the plates and circles assume the character of complete cylindrical tanks, in unassembled condition, and that these processes advance the plates and circles beyond the status of flat-rolled products. In the May 21 submission, you advance the additional argument that the merchandise constitutes parts of railway rolling stock of heading 8607.

You cite several cases decided under previous tariff codes for the proposition that, as imported, the merchandise has been advanced beyond the stage of materials and is dedicated to a single end use; the identity of the finished articles is fixed with certainty; and, commercially, the merchandise is capable of no other substantial use. - 3 -

ISSUE:

Whether the steel plates and circles, imported unassembled, have the essential character of tanks or containers of headings 7309, 7310 or 7311, or of articles of heading 7326; whether they are unfinished parts of railway rolling stock.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

Chapter 72, Note 1(k), HTSUS, indicates, in part, that flat- rolled products include those of solid rectangular (other than square) cross section, straight lengths of the required dimensions, and shapes other than rectangular or square. These include flat-rolled products 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 they do not thereby assume the character of articles or products of other headings.

Relevant Harmonized Commodity Description And Coding System Explanatory Notes (ENs), at p. 994, in commenting on the meaning of note 1(k), indicate that flat-rolled products of heading 7208 are considered to have been worked after rolling if they have been perforated, corrugated, bevelled or rounded at the edges (Emphasis added). It is apparent that perforating and bevelling are operations that will not remove the rectangular steel plates and steel circles from heading 7208 unless these processes, either individually, in combination, or combined with other processes, impart the essential character of goods of other headings. Note our ruling to you of February 19, 1992 (HQ 950626).

In the various cases you cite the court recognizes the difficulty in formulating any general principle that can be universally applied. Previous decisions the court reviews in the cited cases are all based on the particular facts presented. None of these cases discusses the concept of essential character.

In common meaning, the terms tank and container connote receptacles or vessels, articles that contain, hold or store things, in most instances liquids or granular products. As imported, the rectangular steel plates with bevelled edges and perforations, and the steel circles, have neither the form nor shape, or any visually apparent characteristic that would - 4 -
establish their identity as tanks or pressure vessels in unassembled form. The evidence of record does not conclusively indicate in what respect the merchandise has assumed the character of articles of headings 7309, 7310, 7311, or 7326.

Because the bevelling and perforating of the steel plate are operations not sufficient in this case to remove the merchandise from the flat-rolled provisions of chapter 72, the argument that the merchandise constitutes parts of bodies for railway rolling stock is not persuasive. See Additional U.S. Rule 1(c), HTSUS.

HOLDING:

Under the authority of GRI 1, the rectangular plates and circles, of alloy steel, are provided for in heading 7225, as flat-rolled products of other alloy steel, of a width of 600 mm or more. Actual classification is in subheading 7225.90.00, HTSUS, other flat-rolled products. The rate of duty is 5.8 percent ad valorem.

Products from Brazil classifiable in this provision may be eligible for free entry under the Generalized System of Preferences (GSP), if otherwise eligible under the law and applicable Customs Regulations.

EFFECT ON OTHER RULINGS:

Under the authority of section 177.9(d), Customs Regulations, NY 879033 is modified accordingly.

Sincerely,

John Durant, Director
Commercial Rulings Division

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