CLA-2 CO:R:C:G 081606 JAS

Mr. Kent Johnston
Nissho Iwai American Corporation
Five Post Oak Park, Suite 2670
Houston, Texas 77027

RE: Tariff classification of nickel plated perforated steel steel strip

Dear Mr. Johnston:

In your letter of October 19, 1987, you inquire as to the tariff classification of certain nickel plated perforated steel strip from Japan. The strip will be further processed after importation and used as positive and negative grids in re- chargeable nickel cadmium batteries.


The merchandise is cold rolled steel strip, half hard and full hard, 0.08mm x 300mm and 0.10mm x 300mm, in coils, which has been fed through a press where punch and die groups per- forate the strip over its entire surface with numerous tiny holes. The strip is then nickel plated, 3 microns minimum on each side, and rewound on coils. This is its condition as imported.

After importation, the coils are unreeled and the perfor- ated strip is subjected to electrochemical processes to deposit active nickel and cadmium oxides. The strip is then cut into 2-inch lengths, connecting tabs are welded to them, and the resulting unit placed in a battery can. The can is then charged with electricity.


Whether the coiled strip is classifiable as part of a battery, in item 683.15, Tariff Schedules of the United States (TSUS), or according to component material in chief value.

- 2 -


Perforation of strip prior to importation is a process which advances the strip beyond the status of a basic shape or form of iron or steel. See headnote 1, part 2, schedule 6, TSUS. Although a material is precluded from classification in part 2 of schedule 6, it is not necessarily classifiable as a part of an article. Court cases on the classification of steel strip imported in material lengths indicate that to be clas- sifiable other than as a material the character and identity of individual articles must be fixed with certainty at time of importation. The merchandise must be commercially and practi- cally dedicated to only one use, with no additional post- importation processing required except cutting to length.

The post-importation electrochemical processing represents a significant step in the manufacture of the article and is believed critical to establishing the character and identity of the merchandise. The processing after importation is not a mere cutting to length, such as was considered by the court in Heraeus-Amersil v. United States, Slip Op. 86-41 (Ct. Int'l Trade, decided April 18, 1986). In that case, continuous lengths of metal contact tape were merely cut to length after first being welded to contact springs. The court held that the metal tape was classifiable as parts of electrical relays, rather than as a material (wire). The imported perforated strip in this case is distinguishable because it is processed beyond mere cutting to length. Therefore, the perforated strip is not classifiable as parts of batteries.


The nickel coated perforated steel strip in coils is clas- sifiable under the provision for other articles of iron or steel, not coated or plated with precious metal, in item 657.2580, TSUSA, dutiable at the rate of 5.7 percent ad valorem.

The proposed Harmonized Tariff Schedule of the United States Annotated (HTSUSA), is scheduled to replace the TSUS as the tariff code of the United States. The HTSUSA subheading applicable to this merchandise is 7326.90.90, other articles of iron or steel, other. However, if there are changes in the HTSUSA before its enactment, this advice may not continue to apply.


John Durant, Director
Commercial Rulings Division

6cc: Area Director, New York Seaport (NIS 112 & 117)
1cc: District Director, Houston Texas
1cc: Fraud Center
1cc: John Durant