CLA-2 RR:CR:GC 963200 JAS

Port Director of Customs
477 Michigan Avenue, Suite 200
Detroit, MI 48226

RE: Protest 3801-99-100252; Dies, Tools for Forming and Cutting Sheet Metal

Dear Port Director:

This is our decision on Protest 3801-99-100252, filed against your classification under the Harmonized Tariff Schedule of the United States (HTSUS), of dies for stamping and/or cutting blanks for automotive parts from sheet metal. The entries under protest were liquidated on February 19 and 26, 1999, and this protest timely filed on May 19, 1999. Counsel for the protestant presented additional facts and legal arguments at a meeting in our office on February 11, 2000.

FACTS:

The merchandise is a series or “line” of dies that are tools that operate individually in transfer lines or presses to cut out, form, or both cut out and form larger automotive parts such as trunk, hood and door panels from sheet metal. The dies move together from station to station in the transfer line as the part is formed. Some of the dies at issue perform only a cutting function, some perform only a forming function, while others perform both cutting and forming functions. As imported, however, the dies are separately packed and each is mounted in its own holder called a “shoe” or plate, and each is used on a separate station within the transfer line. Separate letters from a die maker and a die supplier indicate that in the automotive industry these dies

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are bought and sold in “lines” and used together to form sheet metal parts; they are invoiced together and all the dies in a line are required to make a part; individual dies in a line cannot be used apart from other dies in the same line; to avoid shutting down an entire production line, individual replacement dies are rarely imported separately, that is, if one die fails it is normally serviced or repaired, not replaced.

The dies were entered under a provision of heading 8207, HTSUS, for pressing, stamping or punching tools, not suitable for cutting metal. Customs determined that the dies were suitable for cutting metal. Accordingly, the entries were liquidated under an alternative provision of heading 8207 for tools suitable for cutting metal.

The HTSUS provisions under consideration are as follows:

Interchangeable tools for handtools...or for machine-tools..., including dies for drawing or extruding metal...:

8207.30 Tools for pressing, stamping or punching, and parts thereof:

8207.30.30 Suitable for cutting metal, and parts thereof

8207.30.60 Not suitable for cutting metal, and parts thereof

ISSUE:

Whether the dies at issue qualify as composite goods for tariff purposes; if not, whether the individual dies are considered not suitable for cutting metal.

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), HTSUS, states in part that composite goods made up of different components are to be classified as if consisting of the component which gives them their essential character, insofar as this criterion is applicable.

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

On protest, counsel for the importer maintains that subheading 8207.30.60, HTSUS, tools not suitable for cutting metal, represents the correct classification. The dies are characterized as “die sets,” each having one part number and invoiced as a complete set. The claim is that, as imported, the dies are composite goods under GRI 3(b), and that the forming dies classified in subheading 8207.30.60 impart the essential character to the whole. Citing an administrative ruling on progressive die units, the claim is that the forming dies impart the size and shape to, and perform most of the technical operations on each part blank, with the cutting operations being merely incidental and subordinate to the forming. Alternatively, if the dies must be separately classified, the claim is those that perform only forming and only cutting operations must be classified in their respective subheadings, while those that perform both forming/ piercing operations as well as cutting/trimming operations should be classified in subheading 8207.30.60, according to the essential character analysis outlined above.

Counsel cites HQ 952717, dated January 22, 1993, in which Customs classified progressive die units in subheading 8207.30.60, HTSUS, citing the authority of GRI 3(b), applied at the subheading level through GRI 6. The dies in that case each performed individual forming and cutting operations, respectively, and, in some cases, combined cutting/forming operations. The die units in HQ 952717, as imported, were in a holder called a “shoe” or plate. They were composite goods with components (i.e., the dies) attached to each other to form a practically inseparable whole. This required the essential character analysis that resulted in the subheading 8207.30.60 classification. Unlike the progressive dies in HQ 952717, which were all in the same shoe, and used to produce smaller automotive parts, the dies at issue here are used to make fenders, hoods and other large automotive parts and, for this reason, each die is in its own shoe.

Nevertheless, relevant ENs, on p. 4, state that for purposes of GRI 3(b) composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts. The same EN also states that as a general rule, the components of composite goods are put up in a common packing.

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As evidence of how these dies are regarded in the automotive industry, counsel has submitted two letters, one dated April 1, 2000, from the manufacturer of stamping dies for the automotive industry, and the other dated April 5, 2000, from an automotive company that both develops and utilizes such dies. This information indicates that large automotive parts are formed using multiple dies in groups called “lines,” with each die in its own shoe or holder, and each one performing a different and unique function; whether supplied by the die manufacturer or the user company, die designs always specify complete lines, and not individual dies; all the dies in a particular line are necessary to produce a single part and separately, an individual die has no viable, commercial use; and finally, because these dies have a long usable life and to minimize the downtime of a production line, when a die fails it is most always serviced or repaired on-site and is not replaced.

The facts here indicate that while, as imported, the dies at issue are separately packed, are never in the same die shoe during use, and are used on separate stations in the transfer line, they are separable components that are adapted one to the other and are mutually complementary, and that, together, they form a whole which is not normally offered for sale in separate parts. The available evidence indicates that the dies at issue qualify as composite goods under GRI 3(b), HTSUS, and must be classified as if consisting of the component which gives them their essential character. In accordance with the principles of HQ 952717, as that decision applies to the issue of essential character, the die sets or line of dies at issue are classifiable as if consisting of the forming dies.

HOLDING:

The die sets at issue are provided for in heading 8207. Under the authority of GRI 1, applied at the subheading level through GRI 6, they are classifiable in subheading 8207.30.60, HTSUS. The merchandise should be reclassified as indicated, and the protest ALLOWED under this provision.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date

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of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,


John Durant, Director
Commercial Rulings Division