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HQ 958998




DECEMBER 26, 1996

CLA-2 RR:TC:MM 958998 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7207.12.00

Port Director of Customs
610 S. Canal Street
Chicago, IL 60607

RE: IA 62/95; Profile Slabs; Semifinished, Slab Hot Rolled From Ingot; Chapter 72, Note 1(ij); Flat-Rolled Products of Iron or Nonalloy Steel, Chapter 72, Note 1(k); Further Worked, Chapter 72, Additional U.S. Note 2; NY 896625, HQ 088116, HQ 957535

Dear Port Director:

In your memorandum of November 27, 1995 (MAN-1-CO:CH:CT306 CTR), you forwarded a letter from counsel for LeeMar Steel Co., Inc., requesting internal advice on the classification of certain hot-rolled carbon steel products produced in Brazil. Additional information was provided in a submission, dated October 9, 1996.

FACTS:

The merchandise in issue is invoiced as QUALITY ASTM A36-91 PRIME STEEL PROFILING SLABS. It is manufactured in Brazil by Usinas Siderurgicas de Minas Gerais S.A. (USIMINAS), and imported in individual pieces, measuring from 4.7260 in. x 72 in. X 291.33 in. to 10.2260 in. x 48 in. x 207.96 in. Mill test certificates show a chemistry in the range shown in American Society for Testing and Materials (ASTM) specification A36/A 36M-91, the standard specification for structural steel, together with yield and tensile strengths in the range shown in the specification for plates, shapes and bars.

The processing involves the indirect casting of molten steel from a basic oxygen furnace into ingots that measure from 21 to 33 inches in thickness. The castings are then heated to rolling temperatures of 1652 degrees Fahrenheit and rolled once in a reversible slabbing mill. The product is then hot scarfed on both the top and bottom surfaces to remove surface imperfections, then subjected to either two or more additional passes. Counsel - 2 -
states that, depending on the amount and severity of surface defects and the speed at which the slab moves through the scarfer, between 3.2 to 9.5 mm is removed from the entire surface of the slab. The product is then rolled either two or three more times in its original hot state to thicknesses of between 4.7 to 10.22 inches. The resulting product, referred to as profiling (profile) slab, has unfinished, as-rolled edges and convex and concave surfaces which are said to evidence lack of strict dimensional or flatness tolerances.

Counsel states that after importation the profiling slabs were either sold as imported, or torch cut using profile cutting machines into specific shapes, typically for use as machine bases, die bolster plates and heavy machine components.

The merchandise was entered under the provision for other semifinished products of iron or nonalloy steel, containing by weight less than 0.25 percent of carbon, of rectangular (other than square) cross section, in subheading 7207.12.00, Harmonized Tariff Schedule of the United States (HTSUS). Counsel maintains that the product has not been further worked beyond semifinished. In accordance with Chapter 72, Note 1(ij), HTSUS, this product is of solid section, is not presented in coils, and has not been further worked beyond primary hot-rolling. In addition, any proposal to classify this merchandise otherwise than as a semifinished product of iron or nonalloy steel is a modification of the treatment previously accorded to substantially identical merchandise, for which the Customs Modernization Act requires publication of notice to interested parties and solicitation of public comments.

The import specialist proposes to reclassify the goods in subheading 7208.42.00, HTSUS, as other flat-rolled products of iron or nonalloy steel, of a thickness exceeding 10 mm.

The provisions under consideration are as follows:

7207 Semifinished products of iron or nonalloy steel:

Containing by weight less than 0.25 percent of carbon:

7207.12.00 Other, of rectangular (other than square) cross section...3.4 percent ad valorem - 3 -

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:

7208.42.00 (now 51.00) Of a thickness exceeding 10 mm ...4.8 percent ad valorem

ISSUE:

Whether hot rolled carbon steel profile slabs are semifinished articles for tariff purposes.

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.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENS) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, 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 Semifinished products is defined, in relevant part, as other products of solid section, which have not been further worked than subjected to primary hot-rolling or roughly shaped by forging, including blanks for angles, shapes or sections. Chapter 72, Note 1(ij), HTSUS. The term Flat-rolled products is defined, in relevant part, as rolled products of solid rectangular (other than square) cross section, which do not conform to the definition at (ij), in the form of straight lengths, which if of a thickness less than 4.75 mm are of a width - 4 -
measuring at least 10 times the thickness or if of a thickness of 4.75 mm or more are of a width which exceeds 150 mm and measures at least twice the thickness. Chapter 72, Note 1(k), HTSUS.

As to whether the merchandise is "semifinished" for tariff purposes, slabs and other semifinished steel products are not made to American Society for Testing and Materials (ASTM) or other industry specifications. On the other hand, plate and other finished steel products, are made to an ASTM or recognized industry specifications. Specifically, ASTM Specification A6 is the Standard Specification for Rolled Steel Plates, Shapes, Sheet Piling, and Bars for Structural Use, and contains dimensional/ tolerance/flatness requirements for rolled steel plate. ASTM Specification A36 is the Standard Specification for Structural Steel, and contains chemical and tensile requirements for carbon steel plates and other structural quality steel. For a product to conform to industry specifications for plate, it must meet both the requirements of ASTM A6 and A36. Therefore, any steel product described as semifinished, but which conforms to an ASTM or other industry specification for plate or other finished steel product, must be classified as a finished steel product.

The definitions for "semifinished" and "flat-rolled" do not define the terms "primary hot-rolling" and "rolling" which are used to describe the condition of the steel products that result from these processes. It is noted that hot scarfing is a conditioning operation normally conducted after rolling to remove surface defects from semifinished steel before it is rolled, forged or otherwise hot formed into a finished steel product. Normally, reroll slab is a type of semifinished steel product intended for further hot working and is usually hot scarfed after the rolling process is completed. In this instance, the steel is hot scarfed prior to completion of the rolling, but the reason is not given. We conclude that no definitive conclusions can be drawn from this apparent deviation from normal slab production. It is noted, however, that in the production of reroll slab the ingot is normally rolled several times, as is the case here.

In discussing slabs and sheet bars of heading 7207, relevant ENS at p. 991 refer to heading 7208 ENS regarding the distinction between these products and certain plates. The heading 7208 ENS at p. 994 state in relevant part that certain sheets and plates - 5 -
may have dimensions similar to those of slabs and sheet bars. However, they can be distinguished from slabs and sheet bars since:

(1) They are most often cross-rolled (longitudinally and transversely) and sometimes oblique-rolled whereas slabs and sheet bars are roughly rolled longitudinally only (in the slabbing or roughing mill).

(2) Their edges are normally sheared or frame-cut and show traces of the shears or frame whereas slabs and sheet bars have round edges.

(3) Tolerances as to thickness and surface defects are very strict whereas slabs and sheet bars are not of uniform thickness and show various surface defects.

The available information indicates these articles referred to as profile slabs have rough surfaces and are rolled in the longitudinal direction only, i.e., they are not cross-rolled. They have so-called "mill" or as-rolled edges. These are characteristics of semifinished slabs, not finished plates. While no Customs laboratory analysis was ever conducted, the import specialist observes that the mill test certificates show heat analyses in the chemistry range shown in ASTM specification A36/A 36M, the standard specification for structural steel. The mill, however, guarantees only nominal thicknesses and widths.

The profile slabs in issue do not comport with the cited ENS. Specifically, there is no evidence in the file that the imported hot-rolled products meet an industry standard for the close tolerances required for flat-rolled plate, nor is there evidence that the profile slabs are rolled to requirements established by the importer or specific end-user, to tolerances which are comparable in accuracy to an industry standard for flat-rolled products. NY 896625, dated April 21, 1994, and HQ 957535, dated August 27, 1996, are in accord.

Our decision to classify the profile slabs in issue as semifinished products of iron or nonalloy steel is based on the information available to us at this time. Any change in the facts, as presented, to include laboratory analysis, and other credible evidence as to the existence of production standards for dimensional tolerances equivalent to those for flat-rolled products, may result in a different conclusion. See HQ 088116, dated February 27, 1991. - 6 -

In view of this conclusion, and the cited administrative rulings on similar merchandise, this decision does not modify the treatment previously accorded by the Customs Service to substantially identical transactions, within section 625(c)(2), Tariff Act of 1930 (19 U.S.C. 1625(c)(2)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act.

You should mail this decision to the internal advice applicant, through its representative, no later than 60 days from the date of this letter. On that date 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 to the public via the Diskette Subscription Service, the Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification

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