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HQ 958865




January 8, 1997

CLA-2 RR:TC:MM 958865 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7208.52.00, 7225.40.30

F. Gordon Lee, Esq.
O'Connor & Hannan, L.L.P.
1919 Pennsylvania Avenue, Suite 800
Washington, D.C. 20006-3483

RE: NY 809749 Modified; Slider Plate Blank; Flat-Rolled Article of Iron or Nonalloy Steel, Heading 7208, Chapter 72 , Note 1(k); Article of Iron or Steel Forged or Stamped but Not Further Worked, Heading 7326; Automotive Parts or Accessories, Heading 7208; Unfinished Article, Essential Character, GRI 2(a); HQ 956790, Motor Wheel Corporation v. United States, Avins Industrial Products Co. v. United States

Dear Mr. Lee:

Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of NY 809749, dated May 28, 1995, was published on November 13, 1996, in the Customs Bulletin, Volume 30, Number 45/46.

FACTS:

In NY 809749, dated May 28, 1995, issued to the broker for your client, Holland Hitch Company, the Area Director of Customs, New York Seaport, held that merchandise described as slider plate blanks were classifiable in subheading 7225.40.30, Harmonized Tariff Schedule of the United States (HTSUS), as flat-rolled products of other alloy steel.

Slider plate blanks are produced in Canada from hot-rolled flat-rolled steel in coils. These coils are slit into uniform widths specified by the client, after which they are cold rolled to reduce their thickness by 1 to 2 thousandths of an inch. The - 2 -
product is then cut to eight different, specific lengths and rolled again to insure uniform flatness along the entire surface. This second rolling does not significantly reduce the products' thickness. In their condition as imported, these blanks are 946.15 mm wide, 7.93 mm thick, and vary in length from 833.1 mm to 2387.6 mm.

After importation, two holes are punched at the forward end of each blank to accommodate air hoses after which the blank is placed in an edge bending machine which curls both side edges into a U-shape. This completes the slider plate. A rack, described as a gear-like piece designed to position a fifth wheel trailer so as to properly distribute its weight on the truck tractor is then welded to the slider plate along the curled edges to form a slider base. The center portions of the six shortest plates are removed by torch cutting to reduce their weight. The centers of the two longest plates are not removed because increased strength is required in their applications with heavy duty vehicles. Blocks called stop bars are then welded to the front end of the plate on each slider base, a fifth wheel member is mounted, and stop blocks welded to the back end of the plate. This completes an automotive component known as a fifth wheel assembly which will be mounted on the rear of a truck tractor to facilitate the coupling of a trailer.

As a preliminary matter, we agree that NY 809749 mistakenly classified the slider plate blanks in a provision for products of other alloy steel when, in fact, a review of the chemistry confirms that most, though not all of them, are of nonalloy steel. More specifically, you contend that slider plate blanks are unfinished automotive parts and accessories for tariff purposes, provided for in appropriate provisions of HTS heading 8708. Alternatively, you contend they are articles of iron or steel, forged or stamped but not further worked, provided for in provisions of heading 7326. In either case, you contend that these Canadian articles are fabricated components and, therefore, eligible for duty-free entry under the Automotive Products Trade Act of 1965, as amended (APTA).

The provisions under consideration are as follows:

7208 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot- rolled, not clad, plated or coated:

Other, not in coils, not further worked than hot-rolled: - 3 -

7208.52.00 Of a thickness of 4.75 mm or more but not exceeding 10 mm

7225 Flat-rolled products of other alloy steel, of a width of 600 or more:

Other, not further worked than hot-rolled, not in coils:

7225.40.30 Other

7326 Other articles of iron or steel:

Forged or stamped, but not further worked:

7326.19.00 Other

8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:

Other parts and accessories:

8708.99 Other:

Other:

8708.99.80 Other

ISSUE:

Whether slider plate blanks are flat-rolled products of iron or nonalloy steel, articles of iron or steel, or unfinished automotive parts or accessories.

LAW AND ANALYSIS: - 4 -

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. GRI 2(a) states in part that any reference in a heading to an article shall include that article incomplete or unfinished, provided that, as entered, the unfinished article has the essential character of the complete or finished article.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENS) constitute the official interpretation of the Harmonized System. While not legally binding, and therefore not dispositive, the ENS provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENS should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The term "flat-rolled products" is defined in part to include rolled products of solid rectangular (other than square) cross section, which do not conform to the definition of "semifinished products" in Note (ij) in the form of straight lengths, which if of a thickness 4.75 mm or more are of a width which exceeds 150 mm and measures at least twice the thickness. See Chapter 72, Note 1(k), HTSUS.

Your first claim is that, at the time of importation, the slider plate blanks are unfinished automotive parts and accessories, having the essential character of complete or finished goods provided for in heading 8708. This claim is based on your assertion that the blanks have exacting measurements and sizing, extremely tight surface tolerances, meeting high strength and durability specifications required of a finished slider plate. You state these latter characteristics are achieved by altering the chemical composition of the product and through thermal/mechanical processing. In support of this claim you cite several court cases decided under the Tariff Schedules of the United States, the HTSUS' predecessor tariff code, on stainless steel wire, seamless tubing, contact tape, nematic liquid crystals and aluminum plates. The issue in each case was whether a material may be considered an unfinished article for tariff purposes, that is, whether upon importation it had been advanced to a point where it was dedicated to and commercially fit for use only as the finished article. As you know, cases decided under - 5 -
the TSUS are not dispositive in interpreting the HTSUS. However, on a case-by-case basis such decisions may be instructive, particularly where the nomenclature remains unchanged and no dissimilar interpretation is required by the text of the HTS. The cases you cite do not deal with rectangular, nonalloy steel shapes, nor do they contain any discussion of essential character, a concept that did not exist under the TSUS. For these reasons, the cited cases are of little value as precedent under the HTSUS.

In our opinion, the provisions of GRI 2(a) relating to unfinished articles apply to the imported merchandise if they qualify as blanks. The ENS to GRI 2(a) provide specific guidance on the application of the rule to articles referred to as "blanks." EN (II) to the GRI states on p. 2:

(II) The provisions of this rule also apply to blanks unless these are specified in a particular heading. The term "blank" means an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part.

Semi-manufactures not yet having the essential shape of the finished articles
(such as is generally the case with bars, discs, tubes, etc.) are not regarded as
"blanks."

The ENS establish two criteria for articles which are "blanks" for GRI 2(a) purposes: approximate shape or outline and sole use for completion into the finished article or part. It is apparent to us that the slider plate blanks fail both parts of the test. In our opinion, these articles do not have the approximate shape or outline of a slider plate. It is only after the side edges are formed into a U-shape and the holes punched that the identity of a slider plate is established. As imported, these blanks have neither the form nor shape, or any visually identifiable characteristic of an automotive component. As imported, they are flat-rolled products with a rectangular shape and nothing more. Of equal importance, there is no evidence that rectangular steel shapes with the same chemical composition, close dimensional tolerances, and mechanical and yield characteristics can only be used for completion into slider - 6 -
plates. The record does not establish that rectangular shapes with identical chemistry and dimensional tolerances are incapable of being made into more than one article. See Avins Industrial Products Co. v. United States, 72 Cust. Ct. 43 (1974), aff'd. 515 F. 2d 782 (CCPA 1975). For these reasons, the articles in issue do not qualify as blanks for tariff purposes, and do not have the essential character of parts and accessories of heading 8708. By contrast, HQ 956790, dated October 28, 1994, held that certain cut-to-length and processed steel tubes did meet the criteria for blanks, having the essential character of finished or complete rear drive axle assemblies. In that case, however, the cut-to-length tubes were subjected to considerably more processing before importation. They were rolled inside and outside to create uneven wall thicknesses, and the ends tapered to accommodate a mounted wheel bearing on one end and an axle carrier on the other end. It was clear in HQ 956790 that the tube lengths could only be used for completion into axle assemblies.

Your alternative claim is that, upon importation, the slider plate blanks are provided for in heading 7326 as articles or iron or steel, forged or stamped, but not further worked. In support of this claim you cite Motor Wheel Corp. v. United States, Slip Op. 95-49 (Ct. Int'l Trade, decided March 20, 1995), in which circular or octagonal shapes cut from hot-rolled steel coil were held to be classifiable in subheading 7326.19.00, HTSUS, as articles of iron or steel, forged or stamped, but not further worked, rather than as flat-rolled products of iron or nonalloy steel. The articles in Motor Wheel were processed, after importation, into finished automotive wheel discs by undergoing between five and nine additional forming operations. The finished wheel discs were then assembled with wheel rims created by a separate process. In our opinion, the court's finding was predicated on the proviso in HTS Chapter 72, Note 1(k), that flat-rolled products of a shape other than rectangular or square are removed from headings for flat-rolled products if they assume the character of articles or products of other headings. Because the slider plate blanks in issue here are rectangular in shape, the proviso in Note 1(k) does not operate to remove them from headings 7208 and 7225. We note also that the ENs at p. 981 state, in part, that very light cold-rolling processes applied to certain hot-rolled flat products that do not significantly reduce their thickness does not change their character of finished hot-rolled products. This describes the cold rolling of the slider plate blanks in issue. - 7 -

You also cite the ENs at p. 1037 which state that heading 7326 covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating. The slider plate blanks, you contend, meet this description. However, the ENs which you cite exclude from heading 7326 articles included in the preceding headings of Chapter 73, or covered by Note 1 to Section XV, or included in Chapter 82 or 83, or more specifically covered elsewhere in the Nomenclature. The slider plate blanks are squarely within the Chapter 72 legal note defining flat-rolled products. Because they are not within the proviso in HTS Chapter 72, Note 1(k), these articles are specifically covered by headings 7208 and 7225. For these reasons, the potential eligibility of this merchandise under the APTA is moot.

HOLDING:

Under the authority of GRI 1, slider plate blanks made from hot-rolled, flat-rolled steel in coils are provided for in heading 7208, if nonalloyed, or in heading 7225, if of other alloy steel, as defined in Chapter 72, Note 1(f), HTSUS. They are classifiable in subheading 7208.52.00 or in subheading 7225.40.30, HTSUS, as appropriate.

NY 809749, May 28, 1995, is modified accordingly. In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

Sincerely,

John Durant, Director
Tariff Classification

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