CLA-2 RR:TC:MM 957535 JAS

Port Director of Customs
477 Michigan Avenue
Detroit, Michigan 48226

RE: I/A 27/95; Profile Slabs, Semifinished; Chapter 72, Note 1(ij); Slab Rolled From Ingot, Hot Scarfed Between Rollings; Flat-Rolled Products, Chapter 72, Note 1(k), Further Worked, Chapter 72, Additional U.S. Note 2; NY 896625, HQ 088116; Established and Uniform Practice, 19 U.S.C. 1315(d); Invoicing, Section 141.86, Customs Regulations

Dear Port Director:

This request for internal advice was initiated by letter, dated May 31, 1995, from counsel for Wirth Limited, to the Area Director of Customs, New York, and concerns the tariff classification of certain hot-rolled carbon steel products produced in Brazil. In preparing this ruling, we have taken into consideration counsel's supplemental submissions dated July 31 and September 19, 1995, and January 25, 1996.

FACTS:

The merchandise in issue is carbon steel profiling (profile) slabs that were hot rolled in Brazil from ingots by Companhia Siderurgica de Tubarao (CST). These products range from 118 to 492 inches long, from 25 to 78 inches wide and from 4 to 18 inches in thickness. The ingots are heated in a batch furnace to rolling temperatures of 2,400 degrees F, then subjected to multiple rolling passes. After one or more lengthwise rolling passes in the slabbing mill, they are hot scarfed in a process designed to remove surface imperfections arising from defects in the ingot or during the initial heating and rolling. In a typical 4-inch thick slab, both surfaces are hot scarfed, effectively removing 3 mm from the entire surface of the slab. In this process, the slab is rolled directly to the hot scarfer, then returned to the rolling stand, where the remainder of up to twenty four rolling passes are completed. - 2 -

The resulting product is called profile slab, and is said not to be intended for reheating and rerolling after importation. Rather, the slabs are cut into profile shapes by gas-cutting processes which counsel maintains makes them suitable for use as counter weights for lifting equipment , cranes and drag lines, machine bases for presses, molds for tire manufacturers, spacers/washers for steel cylinders, and for other non-structural applications. These profile slabs are rolled longitudinally only and have rolled mill edges and tong marks, as well as rough surfaces and roll marks, which are claimed to be characteristic of semifinished steel mill products.

The profile slabs in issue were entered under a provision in heading 7207 for other semifinished products of iron or nonalloy steel of rectangular (other than square) cross section. Counsel maintains these profile slabs are semifinished for tariff purposes because they have not been further worked beyond primary hot rolling, as the term "further worked" is defined in the relevant Additional U.S. Note to Chapter 72. Moreover, counsel claims that pursuant to 19 U.S.C. 1315(d), there is an established and uniform practice to classify profile slabs as semifinished products of iron or nonalloy steel. Your office believes the merchandise is a flat-rolled product of iron or nonalloy steel of the type provided for in heading 7208.

The provisions under consideration are as follows:

7207 Semifinished products of iron or nonalloy steel: Containing by weight less than 0.25 percent of carbon:

7207.12.00 Other, of rectangular (other than square) cross section...3.4 percent ad valorem

* * * *

7208 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, not in coils, not further worked than hot-rolled:

7208.42.00 (now 51.00) Of a thickness exceeding 10 mm...4.8 percent ad valorem

ISSUE:

Whether an established and uniform practice exists in the classification of carbon steel profile slabs; whether these profile slabs are semifinished articles for tariff purposes. - 3 -

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.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The term Semifinished products is defined, in relevant part, as other products of solid section, which have not been further worked than subjected to primary hot-rolling or roughly shaped by forging, including blanks for angles, shapes or sections. Chapter 72, Note 1(ij), HTSUS. The term Flat-rolled products is defined, in relevant part, as rolled products of solid rectangular (other than square) cross section, which do not conform to the definition at (ij), in the form of straight lengths, which if of a thickness less than 4.75 mm are of a width measuring at least 10 times the thickness or if of a thickness of 4.75 mm or more are of a width which exceeds 150 mm and measures at least twice the thickness. Chapter 72, Note 1(k), HTSUS.

Counsel asserts that under 19 U.S.C. 1315(d), an established and uniform practice exists to classify profile slabs under subheading 7207.12.00, HTSUS, based on the principles of Heraeus-Amersil, Inc. v. United States, 9 CIT 412 (1985), and related cases. Specifically, counsel maintains that twenty six (26) entries of merchandise invoiced as profile slabs, made by two importers - the internal advice applicant and one other - at eight different ports of entry over a six-year period, from 1989 through and including 1994, were uniformly liquidated under the claimed provision. The Court stated in Heraeus that determinations under 19 U.S.C. 1315(d) can be made on a case-by-case basis according to certain guiding principles. Factors to be considered are the number of entries resulting in the alleged uniform classifications, the number of ports at which the merchandise was entered, the period of time over which the alleged uniform classifications took place, and whether there had been any uncertainty regarding the classification over its history. In Washington Handle Co. v. United States, 34 CCPA 80, C.A.D. 346 (1946), questions as to the identity of merchandise, its manner of invoicing, and/or its method of manufacture were - 4 -

held to create "considerable uncertainty" as to the proper classification of twenty eight (28) shipments of broom handles so as to result in a finding that no established and uniform practice of classifying this merchandise existed.

In the present case, invoices for an entry submitted by counsel and for 7 randomly selected by the appropriate National Commodity Specialist were reviewed for accuracy of description. These were deemed representative of the twenty six (26) entries under consideration. The invoices for 6 of these 8 entries describe the merchandise as slabs or hot rolled slabs, which would lead a Customs officer to believe that they were, in fact, semifinished articles. There is no reference in any of these invoices to profile or profiling slabs. Since the invoice descriptions in a number of entries were misleading, or at best inaccurate, we conclude there is uncertainty during the time period represented by the sampled entries whether the merchandise was correctly classified. For these reasons, the record does not support a finding that an established and uniform practice exists as to the classification of the merchandise in issue.

As to whether the merchandise is "semifinished" for tariff purposes, slabs and other semifinished steel products are not made to American Society for Testing and Materials (ASTM) or other industry specifications. On the other hand, plate and other finished steel products, are made to an ASTM or recognized industry specifications. Specifically, ASTM Specification A 6 is the Standard Specification for Rolled Steel Plates, Shapes, Sheet Piling, and Bars for Structural Use, and contains dimensional/tolerance/flatness requirements for rolled steel plate. ASTM Specification A 36 is the Standard Specification for Structural Steel, and contains chemical and tensile requirements for carbon steel plates and other structural quality steel. For a product to conform to industry specifications for plate, it must meet both the requirements of ASTM A6 and A 36. Therefore, any steel product described as semifinished, but which conforms to an ASTM or other industry specification for plate or other finished steel product, must be classified as a finished steel product. The definitions for "semifinished" and "flat-rolled" do not define the terms "primary hot-rolling" and "rolling" which are used to describe the condition of the steel products that result from these processes. It is noted that hot scarfing is a conditioning operation normally conducted after rolling to remove surface defects from semifinished steel before it is rolled, forged or otherwise hot formed into a finished steel product. Normally, reroll slab is a type of semifinished steel product intended for further hot working and is usually hot scarfed after the rolling process is completed. In this instance, the steel is hot scarfed prior to completion of the rolling, but no reason is given. Also, in the production of reroll slab the ingot is normally rolled several times, whereas in this case, the steel is subjected to as many as twenty four passes. However, no definitive conclusions can be drawn from these apparent deviations from normal slab production. - 5 -

In discussing slabs and sheet bars of heading 7207, relevant ENs at p. 991 refer to heading 7208 ENs regarding the distinction between these products and certain plates. The heading 7208 ENs at p. 994 state in relevant part that certain sheets and plates may have dimensions similar to those of slabs and sheet bars. However, they can be distinguished from slabs and sheet bars since:

(1) They are most often cross-rolled (longitudinally and transversely) and sometimes oblique-rolled whereas slabs and sheet bars are roughly rolled longitudinally only (in the slabbing or roughing mill).

(2) Their edges are normally sheared or frame-cut and show traces of the shears or frame whereas slabs and sheet bars have round edges.

(3) Tolerances as to thickness and surface defects are very strict whereas slabs and sheet bars are not of uniform thickness and show various surface defects. The available information indicates these profile slabs have rough surfaces and are rolled in the longitudinal direction only and have rolled edges. These are characteristics of semifinished slabs, not finished plates. Moreover, the concerned import specialist confirms the mill sheets bear the designation "A 36" which represents the steel's chemical composition. The mill, however, guarantees only nominal thicknesses and widths.

The profile slabs in issue do not comport with the cited ENs. Specifically, there is no evidence in the file that the imported hot-rolled products meet an industry standard for the close tolerances required for flat-rolled plate, nor is there evidence that the profile slabs are rolled to requirements established by the importer or specific end-user, to tolerances which are comparable in accuracy to an industry standard for flat-rolled products. NY 896625, dated April 21, 1994, is in accord.

Our decision to classify the profile slabs in issue as semifinished products of iron or nonalloy steel is based on the information available to us at this time. Any change in the facts, as presented, to include laboratory analysis, and other credible evidence as to the existence of production standards for dimensional tolerances equivalent to those for flat-rolled products, may result in a different conclusion. See HQ 088116, dated February 27, 1991. - 6 -

We are advised that representative invoices for the entry or entries under consideration here describe "slabs" or "hot rolled slabs." This creates the permissible inference, without further inquiry, that the steel was, in fact, semifinished. Particularly where merchandise of this type is involved, greater care should be exercised to insure that the merchandise is accurately invoiced. See Section 141.86(a)(3), Customs Regulations.

HOLDING:

Under the authority of GRI 1, carbon steel profile slabs, the subject of this ruling, are provided for in heading 7207. They are classifiable in subheading 7207.12.00, HTSUS. You should mail this decision to the internal advice applicant, through counsel, no later than 60 days from the date of this letter. On that date 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
Tariff Classification
Appeals Division