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HQ 957799




July 18, 1995

CLA-2 R:C:M 957799 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8104.19.00

District Director
U.S. Customs Service
200 St. Paul Place, 28th Floor
Baltimore, MD 21202

RE: Protest 1303-94-100160; Unwrought Magnesium; Ingot Form; Remelted; Waste and Scrap; Section XV, Additional U.S. Note 2; Explanatory Note 81.04; 8104.11.00; 8104.20.00

Dear District Director:

The following is our decision regarding Protest 1303-94-100160 concerning your action in classifying and assessing duty on a magnesium product in ingot form under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of a magnesium product in ingot form, containing small amounts of other metals, which were cast from remelted magnesium waste and scrap. The protestant claims that the magnesium was melted into ingot form for transportation purposes. The magnesium product contains over 90 percent but less than 99.8 percent by weight of magnesium.

The magnesium product was entered in 1992 and 1993 under subheading 8104.20.00, HTSUS, as magnesium waste and scrap. For the purposes of uniformity, we will use 1992 HTSUS provisions and duty rates for the discussion below. Any 1993 HTSUS provision or duty rate changes may be implemented where necessary. The entries were liquidated on March 4, 1994, under subheading 8104.11.00, HTSUS, as unwrought magnesium, containing at least 99.8 percent by weight of magnesium. The protest was timely filed on June 1, 1994.

ISSUE:

Whether the magnesium product is classifiable under subheading 8104.11.00, HTSUS, as unwrought magnesium, containing at least 99.8 percent by weight of magnesium, under subheading 8104.19.00, HTSUS, as other unwrought magnesium, or under subheading 8104.20.00, HTSUS, as magnesium waste and scrap.

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.

The subheadings under consideration are as follows:

8104.11.00: [m]agnesium and articles thereof, including waste and scrap: [u]nwrought magnesium:
[c]ontaining at least 99.8 percent by weight of magnesium.

The general, column one rate of duty for goods classifiable under this provision is 8 percent ad valorem.

8104.19.00: . . . : [u]nwrought magnesium: [o]ther.

The general, column one rate of duty for goods classifiable under this provision is 6.5 percent ad valorem.

8104.20.00: . . . : [w]aste and scrap.

Goods classifiable under this provision receive duty-free treatment.

It is well settled that, in the absence of deception, disguise, or artifice resorted to for the purpose of perpetrating a fraud upon the revenue, imported merchandise must be classified with reference to its condition when imported. See United States v. Hannevig, T.D. 38384. Additionally, an importer may fashion his merchandise so that it shall be assessed with the lowest rate of duty, provided that the merchandise is in fact merchandise described as dutiable at that rate. See Michaelian & Kohlberg, Inc. v. United States, T.D. 47554.

In part, section XV, additional U.S. note 2, HTSUS, states:

2. For the purposes of this section, the term "unwrought" refers to metal, whether or not refined, in the form of ingots . . .

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 81.04 (p. 1093 - 1094) states that:

[t]his heading covers:

(1) Unwrought magnesium in ingots . . .

(2) Magnesium waste and scrap. . .

Subheading Explanatory Note.

Subheadings 8104.11 and 8104.19

These subheadings also cover ingots and similar unwrought forms cast from remelted magnesium waste and scrap.

As stated by the importer, the magnesium product, in its condition as imported, is in ingot form. For classification purposes, the fact that it is in this form for transportation purposes is irrelevant. As the magnesium product is in ingot form, it meets the definition of "unwrought". Also, because the magnesium product is in ingot form and is cast from remelted magnesium waste and scrap, in accordance with Explanatory Note 81.04, it should be classifiable as unwrought magnesium.

Because the magnesium product constitutes unwrought magnesium, it cannot be described as magnesium waste and scrap. As demonstrated by Explanatory Note 81.04, the HTSUS treats unwrought magnesium and magnesium waste and scrap as two separate and distinct forms. Therefore, the merchandise is precluded from classification under subheading 8104.20.00, HTSUS, as magnesium waste and scrap.

Because the magnesium product contains less than 99.8 percent by weight of magnesium, classification under subheading 8104.11.00, HTSUS, as unwrought magnesium, containing at least 99.8 percent by weight of magnesium, is incorrect.

As the magnesium product in ingot form contains over 90 percent but less than 99.8 percent by weight of magnesium, it is properly classifiable under subheading 8104.19.00, HTSUS, as other unwrought magnesium.

HOLDING:

The magnesium product in ingot form is classifiable under subheading 8104.19.00, HTSUS, as other unwrought magnesium.

You are instructed to DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance.

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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