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HQ 957092



December 7, 1994

CLA-2 CO:R:C:M 957092 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7207.20.00

District Director
U.S. Customs Service
423 Canal Street, Rm. 245
New Orleans, LA 70130

RE: Protest 2002-94-100735; Semifinished Steel Blooms; Waste and Scrap; Section XV, Note 6(a); 7204.49.00

Dear District Director:

The following is our decision regarding Protest 2002-94-100735 concerning your action in classifying and assessing duty on semifinished steel blooms under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of semifinished steel blooms, produced in the Ukraine, which have been rolled into an elongated shape measuring approximately 320 mm x 320 mm x 4600 mm. The blooms contain less that one percent but more than 0.25 percent of carbon. The protestant claims that the blooms are of undocumented manufacture, and no mill certificate was provided. The protestant states that the blooms can be used to produce rails or products in which high malleability is required, such as refrigerators, washers, and auto parts.

On the Protest Customs Form 19, it is claimed that the blooms are classifiable as scrap under subheading 7249.41.00, HTSUS, a provision which does not exist. It is our understanding, however, that the protestant imported the merchandise under subheading 7204.49.00, HTSUS, as other steel waste and scrap. The entry was liquidated on April 22, 1994, under subheading 7207.20.00, HTSUS, as semifinished products of nonalloy steel, containing by weight 0.25 percent or more of carbon. The protest was timely filed on June 15, 1994.

The subheadings under consideration are as follows:

7204.49.00: [f]errous waste and scrap; remelting scrap ingots of iron or steel: [o]ther waste and scrap: [o]ther.

Goods classifiable under this provision receive duty-free treatment.

7207.20.00: [s]emifinished products of iron or nonalloy steel: [c]ontaining by weight 0.25 percent or more of carbon.

The general, column one rate of duty for goods classifiable under this provision is 4.2 percent ad valorem.

ISSUE:

Whether the semifinished steel blooms are classifiable under subheading 7204.49.00, HTSUS, as other steel waste and scrap, or under subheading 7207.20.00, HTSUS, as semifinished products of nonalloy steel, containing by weight 0.25 percent or more of carbon.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's).
GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

Section XV, note 6(a), HTSUS, states:

6. In this section, the following expressions have the meanings hereby assigned to them:

(a) Waste and scrap

Metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakeage, cutting-up, wear or other reasons.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive or legally binding, 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). In part, Explanatory Note 72.04(A)(2) (p. 987) states that:

[t]he heading covers waste and scrap of iron or steel, as defined in Note 6(a) to Section XV.

[s]uch waste and scrap of iron or steel is of a miscellaneous nature and generally takes the form of:

(2) Articles of iron or steel, definitively not usable as such because of breakage, cutting-up, wear or other reasons; . . .

The protestant claims that because there are no mill certificates, the only buyers for the merchandise are remelters purchasing scrap. It is also claimed that, regardless of the absence of mill certificates, the blooms are of such an unusual size with regard to the handling capacity of American rolling mills, with the exception of some rail producing mills, that they are unusable in any case.

It is our position, based on information supplied by the protestant, that the blooms are not steel scrap. The protestant states that the blooms are usable to produce rails and products requiring high malleability. Just because the only buyers the protestant can find for the blooms are remelters does not mean that the merchandise is scrap. The protestant has provided no evidence that the blooms are definitely not usable as metal goods.

Therefore, the semifinished steel blooms are classifiable under subheading 7207.20.00, HTSUS.

HOLDING:

The semifinished steel blooms are classifiable under subheading 7207.20.00, HTSUS, as semifinished products of nonalloy steel, containing by weight 0.25 percent or more of carbon.

The protest should be DENIED in full. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision, together with the Customs Form 19, should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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