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HQ 961291




September 10, 1998

CLA-2 RR:CR:GC 961291 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9817.00.90

Port Director of Customs
P.O. Box 1490
St. Albans, VT 05478

RE: PRD 0201-97-100272; Titanium Sheets; Waste and Scrap, Section XV, Note 8(a), Subheading 8108.10.10; Remelt Scrap; Titanium Sheet, Subheading 8108.90.60; Remelt Titanium, Articles of Metal to be Used in Remanufacture by Melting, Subheading 9817.00.90; HQ 958806

Dear Port Director:

This is our decision on Protest 0201-97-100272, filed against your classification under the Harmonized Tariff Schedule of the United States (HTSUS) of titanium from Germany imported in rectangular shaped pieces. The entry under protest was liquidated on September 12, 1997, and this protest timely filed on December 10, 1997.

FACTS:

The titanium under protest is described as scrap imported as a raw material for the production of titanium ingots. It is imported in rectangular shapes, typically 4ft. x 8ft. as evidenced by a sample submitted to your office, and may have the physical characteristics and appearance of mill products such as rod, bar and billet. After importation, the titanium is subjected to one or more of the following processes: cold hearth melting by electron beam or plasma torch, vacuum arc remelting or plasma consolidation with sponge, alloy titanium and other titanium scrap materials, all processes utilized in titanium ingot production.

The merchandise was entered under a provision in HTS heading 8108 for titanium waste and scrap. In a memorandum of law filed in support of the protest counsel for the protestant maintains that, as imported, the titanium is waste and scrap as it is suitable for no other purpose than remanufacture. This
contention is based on market pricing information that merchantable titanium is priced almost three times higher than the titanium under protest. Alternatively, a claim is made under a provision in HTS heading 9817 as articles of metal to be used in remanufacture by melting. Counsel claims there is compliance with the three-part test under heading 9817 outlined in numerous administrative rulings. Among the documents submitted in support of this claim is a declaration of intent by the importer to process the titanium as to render it fit only for the recovery of the titanium content and a statement of actual use covering the entry under protest, attesting to the fact that the merchandise was submitted to a process of compacting and mutilating so as to render it fit only for the recovery of metal content. On the belief that the submitted sample was neither waste and scrap nor an unwrought form of titanium, but rather titanium sheet, you liquidated the entry under a provision in HTS heading 8108 for other titanium.

The provisions under consideration are as follows:

8108 Titanium and articles thereof, including waste and scrap:

8108.10 Unwrought titanium; waste and scrap; powders:

8108.10.10 Waste and scrap

8108.90 Other:

8108.90.60 Other

Unwrought metal including remelt scrap ingot...in the form of ingots...which are defective or damaged, or have been produced from melted down metal waste and scrap for convenience in handling and transportation without sweetening, alloying, fluxing or deliberate purifying, and which cannot be
commercially used without remanufacture...; Articles of metal (...not including unwrought metal provided for in chapters 72-81) to be used in remanufacture by melting...:

9817.00.90 Other

ISSUE:

Whether the titanium in issue is waste and scrap of heading 8108; whether it is eligible for duty-free entry in heading 9817 as articles of metal to be used in remanufacture by melting.

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.

Initially, Section XV, Note 8(a), HTSUS, defines Waste and scrap as "Metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons." Photographs purporting to show the condition of the merchandise, as imported, to be waste and scrap are not a part of the protest file. There is no further argument that, or evidence in the file from which we can independently determine whether the titanium conforms to the definition in Note 8(a).

Pursuant to Chapter 98, U.S. Note 1, HTSUS, even if the merchandise is other titanium of subheading 8108.90.60, HTSUS, or is classifiable elsewhere in HTS chapters 1 through 97, if it is an article described in any provision in chapter 98 it is classifiable in said provision if the conditions and requirements thereof and of any applicable regulations are met.

As stated in HQ 958806, dated July 26, 1996, and related cases, subheading 9817.00.90 describes three types of goods:

(1) Unwrought metal including remelt scrap ingot (except copper, lead, zinc and tungsten) in the form of pigs, ingots, or billets

(a) which are defective or damaged, or have been produced from melted down metal waste and scrap for convenience in handling and transportation without sweetening, alloying, fluxing or deliberate purifying, and

(b) which cannot be commercially used without remanufacture;

(2) relaying or rerolling rails; and,

(3) articles of metal (except articles of lead, or zinc or of tungsten, and not including metal-bearing materials provided for in section VI, chapter 26 or subheading 8548.10 and not including unwrought metal provided for in chapters 72-81) to be used in remanufacture by melting or to be processed by shredding, shearing, compacting, or similar processing which renders the fit only for the recovery of the metal content.

The titanium under protest is not unwrought for tariff purposes, nor is it relaying or rerolling rails. However, pursuant to section 54.5(a), Customs Regulations (19 CFR 54.5(a)), articles predominating by weight of metal to be used in remanufacture by one or more of the processes described in (3), above, and which are so used, are eligible for duty-free entry under subheading 9817.00.90, HTSUS.

HOLDING:

Under the authority of GRI 1, the titanium under protest is provided for in heading 9817 as articles of metal. It is eligible for classification in subheading 9817.00.90, HTSUS.

The protest should be ALLOWED upon satisfactory evidence of compliance with section 54.6, Customs Regulations (19 CFR 54.6). In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you should mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing 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 to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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