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HQ 964872




MARCH 19, 2002

CLA-2 RR:CR:GC 964872 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7326.90.85

Mr. Craig M. Schau
Emery Customs Brokers
6940A Engle Road
Middleburg Heights, OH 44130

RE: NY E87780 Revoked; Rubber Coated Steel Sheet

Dear Mr. Schau:

In NY E87780, which the Director of Customs National Commodity Specialist Division, New York, issued to you on October 26, 1999, on behalf of Freudenberg NOK, carbon steel sheet and stainless steel sheet, coated on both sides with rubber, were held to be classifiable as flat-rolled products in provisions of headings 7210, 7212, 7219 and 7220, Harmonized Tariff Schedule of the United States (HTSUS), respectively.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), 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 revocation of NY E87780 was published on February 13, 2002, in the Customs Bulletin, Volume 36, Number 7. No comments were received in response to that notice.

FACTS:

The merchandise in NY E87780, described as NOK Softmetal, is rubber coated carbon steel sheet and rubber coated stainless steel sheet. The steel substrate is first coated on both sides with a liquid adhesive, which is allowed to dry. This surface is then coated to the desired thickness with liquid rubber, and heat applied to vulcanize the liquid rubber into a solid. The rubber surface is then coated with either graphite or plastic resin to avoid sticking and to minimize sliding
friction. The merchandise is imported in various widths and, after importation, is used in automotive applications for the manufacture of brake shims and head gaskets for internal combustion engines.

The HTSUS provisions under consideration are as follows:

Other articles of vulcanized rubber other than hard rubber

7210 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, clad, plated or coated

7212 Flat-rolled products of iron or nonalloy steel, of a width of less than 600 mm, clad, plated or coated

7219 Flat-rolled products of stainless steel, of a width of 600 mm or more

7220 Flat-rolled products of stainless steel, of a width of less than 600 mm

Other articles of iron or steel:

Other

7326.90.85 Other

ISSUE:

Whether steel sheet coated with rubber, as described, remains a flat-rolled product for tariff purposes.

LAW AND ANALYSIS:

Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified 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 3(b) states in part that composite goods are to be classified as if consisting of that material or component which imparts the essential character to the whole. GRI 3(c) states that goods which cannot be classified according to GRI 3(b) are to be classified in the heading which occurs last in numerical order from among those which equally merit consideration.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The General Explanatory Notes to chapter 72, HTSUS, state on p. 1070 that finished products of that chapter may be subjected to further finishing treatments or converted into other articles by surface treatments or other operations to improve the properties or appearance of the metal, protect it against rusting or corrosion, etc. (Emphasis added). Except as provided in the text of certain headings, such treatments do not affect the heading in which the goods are classified. On p. 1071, the Notes state that such authorized surface treatments include coating with non-metallic substances, e.g., enamelling, varnishing, lacquering, painting, surface printing, coating with ceramics or plastics.

The decision in NY E87780 was based on the conclusion that coating steel sheet with rubber on both sides, and further coating the product with graphite or plastic resin, was designed to improve the properties or appearance of the metal, protect it against rusting, corrosion, etc. This constituted a permissible surface treatment that allowed the goods to remain in the respective headings of chapter 72. This is incorrect and no longer represents Customs position in the circumstances.

In HQ 964609, dated July 30, 2001, substantially similar merchandise was found to be classifiable as an article of iron or steel of heading 7326, HTSUS. That decision provides an analysis we deem instructive in the present situation. HQ 964609 cited with approval HQ 083126, dated February 13, 1990, which held that the coating of stainless steel sheet with nitrile butadiene vulcanized rubber does not constitute a permissible “further working” of the steel intended to improve the properties or appearance of the
metal, to protect it against rusting, corrosion, etc. HQ 083126 found the merchandise to be a composite good consisting of different materials or components that requires classification under GRI 3, HTSUS. The rubber-coated steel sheet in that ruling was described as being specially designed and manufactured for the production of gaskets used in internal combustion engines. Its use elsewhere was said to be economically prohibitive. One of the most important features of the article is that its surface is soft so that the gasket can obtain a good seal. Stainless steel alone cannot be used as a gasket because it is too hard to conform to the surface of a flange and to form the required seal. Coating the steel with a thin layer of rubber results in an ideal article for the production of gaskets, one having the strength of steel and the softness of rubber. The statement in HQ 083126, ''[e]ven if coating with rubber were to be considered a surface treatment such as coating with plastics, in this case it would not be for improving the properties or appearance of the metal, protecting it, or the like" is particularly relevant here.

The rubber coated steel sheet is a composite good made up of different constituents, each provided for in its own heading. Each heading, however, describes part only of the good. It is clear that the rubber coating in this case is not designed to enhance the metal; rather, it is a functional constituent designed to effect a good seal. Thus, the rubber component, described by heading 4016, advances the stainless steel sheet beyond a flat rolled product described in headings 7210, 7212, 7219 and 7220. Further, the analysis in HQ 083126 concerning the rigidity of the steel and its ability to be cut into various shapes, is equally compelling. For these reasons, we are unable to establish the essential character of the NOK Softmetal under GRI 3(b). Therefore, we find that under GRI 3(c) the carbon steel and stainless steel sheet coated with a nitrite synthetic rubber compound and either graphite or plastic resin is to be classified in heading 7326, as the heading that occurs last in numerical order among the enumerated headings, all of which merited consideration. The graphite and plastic resin were not given consideration, as they were not functional constituents of the product, their presence serving merely to avoid sticking and to minimize sliding friction.

HOLDING:

Under the authority of GRI 3(c), HTSUS, rubber coated carbon steel and stainless steel sheet, designated NOK Softmetal, is provided for in heading 7326. It is classifiable in subheading 7326.90.85, HTSUS.

EFFECT ON OTHER RULINGS:

NY E87780, dated October 26, 1999, is revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

John Durant, Director
Commercial Rulings Division


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