CLA-2 CO:R:C:M 951469 AJS

District Director
U.S. Customs Service
P.O. Box 2450
San Francisco, CA 94126

RE: Protest number 2809-92-100372; titanium scrap fines; titanium sponge; Subheading 8108.10.10; Section XV, note 6(a); waste and scrap; Section XV, Additional U.S. Note 2; unwrought.

Dear District Director:

This is our decision in protest for further review number 2809-92-100372, dated February 20, 1992, filed against the tariff classification of "titanium scrap fines" from the Soviet Union within subheading 8108.10.50, Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The subject merchandise is described as titanium scrap fines (TSFs). They consist of sized fragments of titanium sponge which have been aggregated into briquettes. Customs laboratory analysis indicates that the TSFs are pelletized bits of titanium sponge.

ISSUE:

Whether the subject TSFs are properly classifiable within subheading 8108.10.10, HTSUS, which provides for "waste and scrap" titanium; or within subheading 8108.10.50, HTSUS, which provides for "other" unwrought titanium. LAW AND ANALYSIS:

Subheading 8108.10.10, HTSUS, provides for "waste and scrap" titanium. This term encompasses metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage,

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cutting-up, wear or other reasons. Section XV, note 6(a). Counsel for the protestant claims that the subject TSFs are "waste and scrap" of titanium sponge. This assertion is based on the claims that the TSFs do not possess the same ASTM (American Society for Testing Materials) chemical composition required for titanium sponge, are not sold at the same price, and are not used for the same purpose.

Counsel states that titanium sponge is used in the aerospace industry to make sheet, plate and tubes. The subject TSFs are used to produce nickel and cobalt alloy based pipes, tubes and sheets for the aerospace industry. In addition, the TSFs can be used in the manufacture of certain titanium products if they are melted with pure titanium in proportionally small amounts. These uses are of a similar nature and do not establish that the TSFs are "not usable" as titanium.

Counsel claims that the subject TSFs possess only a minimum content of 99 % titanium, while the ASTM requires a minimum content level of 99.3 % titanium for titanium sponge. We do not find this small difference in percentage controlling for classification purposes. Customs laboratory analysis indicates that the TSFs possess the characteristics of titanium sponge. Furthermore, the above percentage differential simply requires that the TSFs be used for a different purpose than that of ASTM titanium sponge, it does not require that they be classifiable as "waste or scrap".

Counsel also claims that the price difference between the TSFs and titanium sponge merit classification of the TSFs as "waste and scrap." At the time of this transaction, titanium sponge was sold for approximately $12.00 per kilo and the TSFs were purchased for $9.00 per kilo. Information obtained by Customs indicates that at this time scrap titanium was being sold at between $1.10 to $4.41 per kilo. Therefore, this price differential would appear to merely reflect the quality difference in the TSFs and the ASTM sponge, and not establish that the TSFs are "waste or scrap" titanium.

Subheading 8108.10.50, HTSUS, provides for "other" unwrought titanium. The term "unwrought" refers to metal, whether or not refined, in the form of briquettes, sponges and similar manufactured primary forms. Section XV, Additional U.S. Note 2. The subject TSFs satisfy this description. They are pieces of titanium sponge which have been aggregated into briquettes for further use. In addition, counsel also acknowledges that titanium sponge is unwrought. Accordingly, the TSFs satisfy the terms of this subheading and are properly classifiable therein.

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HOLDING: The subject "titanium scrap fines" are classifiable within subheading 8108.10.50, HTSUS, which provides for "other" unwrought titanium. You should deny the protest in full. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the protest.

Sincerely,


John Durant, Director
Commercial Rulings Division