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HQ 960358




March 27, 1998

CLA-2 RR:CR:GC 960358 HMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7215.50.00

Mr. Harvey A. Isaacs
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway , 43rd Floor
New York, NY 10036-8901

RE: Cold Drawn Steel Rod; Subheading 8708.99.73; Chapter 72, Note 1(m); GRI 2(a); Blanks; General Explanatory Note (II) to GRI 2(a); Additional U.S. Rule of Interpretation 1(c); Other Bars and Rods of Iron or Nonalloy Steel; Parts and Accessories of Automobiles, Parts for Steering Systems; NY A83672, Affirmed.

Dear Mr. Isaacs:

This is in response to your letter, dated March 24, 1997, on behalf of the Torrington Company, requesting reconsideration of New York Ruling (NY) A83672, dated June 28, 1996. In NY A83672, Customs classified cold drawn steel rods imported from Canada under subheading 7215.50.0060 of the Harmonized Tariff Schedule of the United States (HTSUS), as other bars and rods of iron or nonalloy steel, not further worked than cold-formed or cold-finished. In preparing this ruling, consideration was given to arguments and supplemental submissions presented during a meeting held on January 7, 1998. Consideration was also given to your supplemental submissions, dated October 7, 1997, and March 16, 1998. Samples were submitted with the original request.

FACTS:

As described in NY A83672, the merchandise is cold drawn steel rods, Parts 21248 and 21894. Coils of hot-rolled steel bars of circular cross section are produced by a Canadian steel manufacturer, Stelco, Inc., and then sent to Canadian Drawn Steel Company (CDS) for further processing. First, the steel coils are fed through a pre-straightener to reduce the curvature of the steel lengths. The pre-straightened bars are fed into a drawing machine, which strengthens and tempers the steel, and then shotblasted to remove rust and hot mill scale.

Subsequently, CDS cold draws the hot-rolled bars through a carbide die which changes the cross-section of the bars from a round diameter into a "Double D" shape or "flattened circle" of which two opposite sides are convex arcs and the other two opposite sides are straight and parallel to each other. The convex surface measures 0.5512 inches and the flat surface 0.75 inches. The cold drawn bars are then cut into two different lengths prior to importation into the United States. Specifically, the length for part 21894 is 7.770 inches and for part 21248 is 16.097 inches.

After importation, the bars are subjected to several types of processing operations, including broaching, piercing and vailing of the ends. Additionally, for one of the two cut lengths of bar, clip grooves and injection molding grooves are turned in the bars. The machined bars/shafts are then ready to be incorporated into automobile steering column assemblies.

The provisions under consideration are as follows:

7215 Other bars and rods of iron or nonalloy steel:

7215.50.00 Other, not further worked than cold-formed or cold-finished...4.5%

8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:
Other parts and accessories:
8708.99 Other:
Other:
Other:
8708.99.73 Parts for steering systems...2.7%

ISSUE:

Whether the cold drawn steel rods are classifiable as unfinished parts and accessories of motor vehicles under subheading 8708.99.73, HTSUS, or as other bars and rods of iron or nonalloy steel, not further worked than cold-formed or cold-finished under subheading 7215.50.00, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the 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.

NY A83672 held that the steel rods were described in heading 7215, which provides for other bars and rods of iron or nonalloy steel. It found that the merchandise met the definition of Chapter 72, Note 1(m), which states, in part, that the expression "other bars and rods" means

[p]roducts which do not conform to any of the definitions at (ij), (k) or (l) above or to the definition of wire, which have a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles (including squares), triangles or other convex polygons (including "flattened circles" and "modified rectangles", of which two opposite sides are convex arcs, the other two sides being straight, of equal length and parallel).

The Harmonized Commodity Description And Coding System Explanatory Notes (EN's) constitute the official interpretation of the Harmonized system. While not legally binding on the contracting parties, and therefore not dispositive, the EN's 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 EN's should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). EN 72.15 states in part, at page 1088, that heading 7215
covers bars and rods other than those of heading 72.13 or 72.14. The bars and rods of this heading may :

(1) be obtained by cold-forming or cold-finishing, i.e., have been subjected either to a cold pass through one or more dies (cold-drawn bars) or to a grinding or turning process (grinded or sized bars).

(2) have been subjected to working (such as drilling or sizing, or to futher [sic] surface treatments than are allowed for products of heading 72.14, such as plating, coating, or cladding (see Part (IV) (C) of the General Explanatory Note to this Chapter), provided that they do not thereby assume the character of articles or of products falling within other headings;

We believe that Note 1(m) to Chapter 72 includes the cold drawn steel bars at issue. The steel rods in this instance have a "Double D" or "flattened circle" shape of which two opposite sides are convex arcs and the other two opposite sides are straight and parallel to each other. The subject steel rods fit squarely with the definition of Note 1(m) to Chapter 72 and the ENs. Therefore, we find that the cold drawn steel rods are described in heading 7215.

You contend that the steel rods are classifiable under subheading 8708.99.73, HTSUS, based on the premise that the imported shaft is an integral part of a motor vehicle steering system. You state that the steel shaft is thus excluded from Chapter 72 based on Note 1(g) to Section XV. You argue in the alternative that the provisions of GRI 2(a) apply to the imported merchandise if they qualify as "blanks." We do not agree with your contention that, as imported, the steel shaft is a finished part of a steering system. We must then apply GRI 2(a) to determine whether the steel rod is an unfinished part or a blank of a motor vehicle.

GRI 2(a) states that any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

General EN (II) to GRI 2(a) states in part that 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. In the present case, then, to be considered unfinished parts or shaft blanks for automotive steering systems, the steel rods must have the approximate shape or outline of the finished product and must, other than in exceptional circumstances, only be capable of use for completion into a finished steering system part.

In your submissions you state that after importation, the "Double D" steel bars are subjected to several types of processing operations, including broaching, piercing and vailing of the ends. You explain that for part 21894, a key shape is broached by pushing or pulling a broach across the rod's surface to give the desired contour. The rod is then vailed with a die that uses hydraulic pressure to push down over the rod. For part 21248, you state that clip grooves and injection molding grooves are turned in the bars. When performing injection molding, the metal is shaped by injecting a measured quantity of molten materials into dies. Holes are also drilled, coined and broached in the rods.

We believe that the steel rods are subjected to considerable processing after importation and that they appear to have a uniform and common bar or rod cross-section and could, conceivably, be used for completion into articles other than a steering system part. The fact that the instant merchandise has been cut to length does not make it an unfinished part of motor vehicles. We thus find that the steel rods do not have the approximate shape or outline of the finished steering column shaft, and therefore are not described in heading 8708. Consequently, since the steel shafts are neither finished nor unfinished parts, the Automotive Products Trade Act of 1965, as amended, (APTA) is inapplicable in this instance. The steel shafts are not "fabricated components" as that term is defined by the Act. Furthermore, we note that, as of January 1, 1998, Customs cannot accept entries that claim duty-free benefits under the APTA because, in light of the North American Free Trade Agreement (NAFTA), the Department of Commerce is no longer certifying companies in the United States as "bona fide motor-vehicle manufacturers."

HOLDING:

Under the authority of GRI 1, the cold drawn steel rods are provided for in heading 7215, HTSUS. They are classifiable under subheading 7215.50.00, HTSUS, as "Other bars and rods of iron or nonalloy steel: Other, not further worked than cold-formed or cold-finished." The rate of duty is 5.2% ad valorem.

A83672 is affirmed.

Sincerely,

John Durant, Director
Commercial Rulings Division

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