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HQ 966623




June 21, 2004

CLA-2 RR:CR:GC 966623 KBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 7306.30.1000; 7306.40.10; 7306.50.1000

Area Port Director
Bureau of Customs and Border Protection
6747 Engle Road
Middleburg Heights, OH 44130

RE: Internal Advice (IA) 03/013; Steel Pipes

Dear Area Port Director:

The following is our decision regarding your memorandum (APP-6-CL:PD:FO JDT), dated June 18, 2003, forwarding Internal Advice (IA) 03/013 which was initiated by counsel on behalf of Honda of America Mfg, Inc. (HAM), and which concerns the classification of steel pipes HAM intends to use in automobile transmissions under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). A teleconference was held with the counsel for the importer and representatives from HAM on May 4, 2004. We also reviewed additional submissions by counsel dated May 25, 2004, June 1 and 3, 2004.

FACTS:

The subject articles are three alloy and non-alloy carbon steel straight pipes, HAM Part Numbers 22741-P4R-0000, 22743-PW4-0000, and 27588-PX4-0000. The pipes are produced from flat sheets which are then rolled. The wall thickness of the pipes is 0.85 mm. Pipe 22741-P4R-0000 measures 8 mm in diameter and 105 mm in length. Pipe 222743-PW4-0000 measures 8 mm in diameter and 40 mm in length. No measurements were submitted for the third pipe. HAM states that the pipes may also be in a 6 mm diameter. HAM states that after the pipes are cut to length, the ends of the pipes are chamfered to a 30 degree angle to allow them to be installed into the pre-drilled holes in the transmission case. As part of the chamfering process the pipes are ground to remove imperfections. The pipes then undergo a washing process which places a light film of rust inhibitor on the pipes. According to HAM the pipes are intended for use in the secondary body of the automatic transmission of an automobile power train system to facilitate the flow of hydraulic fluid. HAM claims that the pipes are designed according to specified proprietary engineering criteria and are dedicated for use in the automobile power train system. Further, HAM claims that the pipes are precluded from use in normal applications such as plumbing because they are much smaller in diameter than conventional pipes. HAM states the size, shape, finish, construction and strength of the pipes dedicate their use only in hydraulic fluid passages within an automobile’s automatic transmission system. Therefore, HAM believes the pipes should be classified in heading 8708, HTSUSA, as parts and accessories of motor vehicles. Your office believes that the steel pipes should be classified in heading 7304.

ISSUE:

Should the subject steel pipes be classified as pipes and tubes, or as parts and accessories of an automobile under the HTSUSA?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI.

The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. The ENs, although neither dispositive nor legally binding, facilitate classification by providing a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

The HTSUS provisions under consideration are as follows:

7304 Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel:

Other, of circular cross section, of iron or nonalloy steel:

7304.31 Cold-drawn or cold-rolled (cold-reduced):

7304.31.60 Other

7304.31.6050 Other

7306 Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed, of iron or steel:

7306.30 Other, welded, of circular cross section, of iron or nonalloy steel:

7306.30.1000 Having a wall thickness of less than 1.65 mm

7306.40 Other, welded, of circular cross section, of stainless steel:

7306.40.10 Having a wall thickness of less than 1.65 mm

7306.50 Other, welded, of circular cross section, of other alloy steel:

7306.50.1000 Having a wall thickness of less than 1.65 mm

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

Other parts and accessories:

Other:

Other:

8708.99.67 Other parts for power trains

8708.99.6790 Other

8708.99.80 Other

8708.99.8080 Other

Counsel for the importer claims that the imported pipes should be classified as parts of automobiles provided for under heading 8708, HTSUSA. Section XVII Section Note 3 provides that “parts” or “accessories” of chapter 87 do not apply to parts or accessories which are not suitable for use “solely or principally” with the articles of that chapter. The General ENs to Section XVII state that parts and accessories in this section must comply with all three of the following conditions:

(III) PARTS AND ACCESSORIES

They must not be excluded by the terms of Note 2 to this Section and They must be suitable for use solely or principally with the articles of Chapters 86 to 88 and They must not be more specifically included elsewhere in the Nomenclature.

See HQ 956743 (January 24, 1995).

In HQ 956790 (October 28, 1994), the Bureau of Customs and Border Protection (CBP) determined certain steel tubes were classified as parts of automobiles under heading 8708. In that decision CBP listed all the steps the article went through to make it specific for only its intended use:

The merchandise is cut-to-length and processed steel tubes which are fabricated in a series of operations that begin with wide coils of hot rolled SAE 1026 flash controlled welded steel conforming to ASTM designation A 513 for electric resistance welded carbon steel mechanical tubing. These coils are slit lengthwise into narrower widths, then electro-fused and rolled into 280-inch lengths of tubing. After removing fusion residue from the inside of the tubing the lengths are annealed to soften them for further fabricating, then straightened and lubricated. The tubing is then lathe cut into 17-inch and 19.6-inch lengths. One length of tubing will become the right axle housing and the other the left axle housing. The tubes will then be rolled on a mandrel inside and outside to create uneven wall thicknesses, the thicker areas being necessary to accommodate brackets. The rolled tubes will then be trued back to their original finished lengths, then tapered to accept a mounted wheel bearing on one end and an axle carrier on the other end. Finally, one end of each tube is tapered to make it smaller than the other end. This last step brings the tubes to their condition as imported.

Unlike the pipes in HQ 956790, the instant pipes are simple straight lengths of pipe. They are not bent, drilled or manufactured in such a way that they are unique to HAM’s particular purpose and could not be used for other purposes. HAM argues that the small dimensions of the pipe restrict its use only to the automatic transmission of an automobile. However, The Steel Products Manual, Steel Specialty Tubular Products, American Iron And Steel Institute, (October 1980) at 44, describes mechanical tubing as tubing used for automatic transmissions and states that it is typically not produced to standard size but it is produced to meet specific dimensions determined by the customer. Further, CBP has previously found other small dimension tubes, sometimes made to a specific ASTM standard, could have uses other than automotive and were classifiable in Chapter 73. See NY J82219 (April 11, 2003), NY D89819 (May 6, 1999), NY E86977 (September 30, 1999), NY E86334 (September 30, 1999), and NY I86681 (October 22, 2002). Thus, since the instant steel pipes are not bent, drilled, flared, tapered or otherwise shaped or manufactured to specifically conform only to the use suggested by HAM, the instant pipe could conceivably be used in various other tasks requiring a smaller diameter pipe, i.e., air conditioning. Therefore, classification in heading 8708 as a part or accessory of a motor vehicle is not appropriate.

Initially in comparing headings 7304 and 7306, we note that the pipes are created from flat sheets of steel which are then rolled. As such, heading 7304, which involves “seamless” pipes does not apply. The General ENs to chapter 73 state that tubes and pipes under this chapter are:

Tubes and pipes

Concentric hollow products, of uniform cross-section with only one enclosed void along their whole length, having their inner and outer surfaces of the same form. Steel tubes are mainly of circular, oval , rectangular (including square) cross sections.They may be polished, coated bent (including coiled tubing) threaded and coupled or not, drilled, waisted, expanded, cone shaped or fitted with flanges, collars or rings.

The ENs for heading 7306 state that:

This heading includes, in particular, line pipes of a kind used for oil or gas, casing and tubing of a kind used in drilling for oil or gas, tubes and pipes suitable for use in boilers, superheaters, heat exchangers, condensers, feed-water heaters for power stations, galvanised or black tubes (so-called gas tubes) for high or medium pressure steam or water distribution in buildings, as well as tubes for water or gas street distribution mains. In addition tubes, pipes and hollow profiles are used for the manufacture of parts for automobiles or for machinery, bicylce frames, prams, or for other structural uses, scaffolding or tubular structures or building construction. “Open seam” tubes are used, for example, as frames for metal furniture.

(Emphasis added).

However, the ENs to heading 7306 exclude:

(f) Tubes, pipes and hollow profiles made up into specific identifiable articles, e.g., those prepared for use in structures (heading 73.08), tubular sections of central heating radiators (heading 73.22), exhaust manifolds for internal combustion piston engines (heading 84.09), other machinery parts (Section XVI), exhaust boxes (silencers) and exhaust pipes of vehicles of Chapter 87 (e.g., heading 8708 or 8714), saddle pillars and frames for cycles (heading 8714).

The importer states that the instant pipes are to be used in the automatic transmission system of automobiles to facilitate the flow of hydraulic fluid. The ENs for heading 7306 specifically allow tubes and pipes which are intended to be used as parts of automobiles. The ENs also exclude pipes and tubes made up into a specific identifiable article. However, the instant pipes imported by HAM are straight pipes with no bends, threading, tapers, drilled holes, or molding. HAM argues that the pipes are made to specified proprietary engineering criteria and that their small diameter restricts their use only to the use in automatic transmission systems of automobiles. HAM cites Benteler Industries v. United States, 17 C.I.T. 1349, 840 F. Supp. 912 (1993), a decision under the Tariff Schedules of the United Sates (TSUS), the predecessor to the HTSUSA, wherein steel tubular sections were determined to be parts of automobiles. However, in the Benteler case the court stressed the part’s “unique chemical content”, so unique in fact that the part was patented specifically for the intended purpose. Id. At 915. The court cited the requirement that “the character or identity of the individual articles is fixed with certainty and is not commercially capable of any other use.” Id. at 916 (quoting United Sates v. Buss & Co., 5 Ct. Cust. App. 110, T.D. 34138 (1914)). This uniqueness is not true of the instant steel pipes.

Pursuant to Section XVII, Note 3, General EN to Section XVII at (III)(c) and the analysis above, we find the instant steel pipe imported by HAM to be more specifically classified as a steel pipe in heading 7306, HTSUSA, than in the general basket provision of parts and accessories of automobiles in heading 8708, HTSUSA. See, e.g., HQ 966963 (April 30, 2004) (decided under a similar Note in Section XVI, HTSUSA, stating “that a provision for parts of an article shall not prevail over a more specific provision for such parts.”) The non-alloy steel welded pipes are classifiable under subheading 7306.30.1000, HTSUSA, as other tubes, pipes and hollow profiles, of iron or steel, other, welded, of circular cross section, of iron or non-alloy steel, having a wall thickness of less than 1.65 mm. The alloy steel welded pipes are classifiable under subheading 7306.50.1000, HTSUSA, as other tubes, pipes and hollow profiles, of iron or steel, other, welded, of circular cross section, of other alloy steel, having a wall thickness of less than 1.65 mm. If any of the pipes are made of stainless steel, they are classifiable under subheading 7306.40.10, HTSUSA, as other tubes, pipes and hollow profiles, of iron or steel, other, welded, of circular cross section, of stainless steel, having a wall thickness of less than 1.65 mm.

HOLDING:

The non-alloy steel welded pipes are classifiable under subheading 7306.30.1000, HTSUSA, as other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel, other, welded, of circular cross section, of iron or non-alloy steel, having a wall thickness of less than 1.65 mm. The alloy steel welded pipes are classifiable under subheading 7306.50.1000, HTSUSA, as other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel, other, welded, of circular cross section, of other alloy steel, having a wall thickness of less than 1.65 mm. If any of the pipes are made of stainless steel, they are classifiable under subheading 7306.40.10, HTSUSA, as other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel, other, welded, of circular cross section, of stainless steel, having a wall thickness of less than 1.65 mm. The 2004 column one, general rate of duty for each of the above classifications is free. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUSA and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.

You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division


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