CLA-2 RR:CR:GC 965792 JAS
William Silverman
Hunton & Williams
1900 K Street, N.W.
Washington, D.C. 20006-1109
RE: Hot-Rolled Carbon Steel H-Beams, Drilled and Punched; 201 Duties
Dear Mr. Silverman:
Your letter to the Port Director of Customs, Blaine, WA, dated May 23, 2002, on behalf of George Third & Son (GTS), constitutes a request for internal advice on the tariff status, under the Harmonized Tariff Schedule of the United States (HTSUS), of certain hot-rolled carbon steel H-beams from Japan or South Korea. Of particular importance is the assessment of additional so-called "Section 201 Duties" on this merchandise pursuant to Presidential Proclamation 7529, issued on March 5, 2002 (Federal Register, Vol. 67, No. 45, March 7, 2002). Your letter has been referred to this office for reply. We regret the delay in responding.
Although the transactions which gave rise to your request are current, you note that importations of this merchandise are ongoing. For this reason, we will consider this as a ruling request on prospective transactions, under section 177.2, Customs Regulations. Potential inclusion of these H-beams within an antidumping duty order is outside the scope of this decision.
FACTS:
The merchandise at issue is hot-rolled carbon steel H-beams or sections, 80 mm or more in height, rolled in Japan or South Korea, then shipped to Canada. These H-beams are processed in Canada by cutting-to-length, coping or shaping, drilling, punching or perforating with various-sized holes at particular locations on the beams, followed by sandblasting and painting. This
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is the condition of the merchandise as imported. There is no dispute that either Japan or South Korea is the country of origin of the hot-rolled H-beams.
You indicate that for several years the merchandise was entered under subheading 7216.33.00, HTSUS, as angles, shapes and sections (H-sections) of iron or nonalloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of 80 mm or more, H sections. Recently, however, the merchandise has been reclassifed at Blaine under subheading 7216.99.00, HTSUS, as other angles, shapes and sections of iron or nonalloy steel. In addition, GTS has been advised that the H-beams are subject to the additional Section 201 duties of 30 percent under subheading 9903.73.50, HTSUS.
The HTSUS provisions under consideration are as follows:
7216 Angles, shapes and sections of iron or nonalloy steel
U, I or H sections, not further worked than hot-rolled,
hot-drawn or extruded, of a height of 80 mm or more:
7216.33.00 H sections
7216.99.00 Other
* * * * *
7308 Structures and parts of structures...of iron or steel; plates,
rods, angles, shapes, sections, tubes and the like, prepared
for use in structures, of iron or steel
7308.90 Other:
Columns, pillars, posts, beams, girders and similar
structural units:
7308.90.30 Not in part of alloy steel
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ISSUE:
Whether the H-beams at issue are "further worked than hot-rolled" for heading 7216 purposes; if not, whether they are "prepared for use in structures" under heading 7308; whether reclassification of the H-beams as indicated contravenes an established and uniform practice of classification under 19. U.S.C. 1315(d); and finally, whether the H-beams are subject to Section 201 duties.
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.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), constitute the official interpretation of the Harmonized System at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
You maintain that the H-beams at issue are not further worked than hot-rolled under heading 7216, HTSUS, based on structure of the nomenclature in that heading, as subheading 7216.99.00, in your opinion, is limited to H-beams that are either cold rolled or have undergone surface treatments considered further working as the term "further worked" is defined in Chapter 72, Additional U.S. Note 2, HTSUS; without any of the surface treatments in that note, perforated H-beams should not be deemed to fall within a "further worked" category; an administrative ruling cited by the port as controlling the classification here is inapposite as that case interpreted the term "further worked" in the context of flat-rolled products of heading 7208, HTSUS; if the suggested heading 7216 classification is found not to apply, classification in heading 7308, HTSUS, is appropriate because the H-beams have been prepared for use in structures within the terms of that heading; while subheading 7216.99.00 appears in Presidential Proclamation 7529, it applies only to a grouping of bars, rods, and "light shapes" of steel, a term that does not describe the "heavy" H-beams at issue; and finally, GTS has a classification practice that is both uniform and consistent, to classify the H-beams under subheading 7216.33.00, HTSUS. This, you contend, constitutes an established and uniform practice of classification that cannot be changed without employing the notice and comment procedure required by 19 U.S.C. 1315(c).
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As to classification of the H-beams in subheadings 7216.33.00, 7216.99.00 or 7308.90.30, HTSUS, relevant heading 7216 ENs identify H sections as among those included, such articles usually being produced by hot-rolling, hot-drawing, hot-extruding or hot-forging or forging blooms or billets. Further, these ENs indicate the products of heading 7216 may have been subjected to working such as drilling, punching or twisting or to surface treatment such as coating, plating or cladding, provided they do not
thereby assume the character of articles or products of other headings. Articles prepared for use in structures are expressly excluded from heading 7216 and are referred to heading 7308. Thus, unless the context provides otherwise, the steel products of Chapter 72 can be subjected to further working operations that include both surface treatments and mechanical working operations. Clearly, the H-beams at issue have been further worked beyond hot-rolled, hot-drawn or extruded. In addition to being coated with a nonmetallic substance, i.e., painting - a type of further working defined in Chapter 72, Additional U.S. Note 2, HTSUS - these H-beams have been further processed by drilling or punching. These articles are not provided for in subheading 7216.33.00, HTSUS. It is our opinion that the H-beams that have been hot-rolled and then drilled or punched are classifiable in subheading 7216.99.00.
Concerning heading 7308, inasmuch as drilling or punching holes in a beam are allowable processes for angles, shapes and sections of heading 7216, it is difficult to argue that those same processes identify the H-beams as "prepared for use in structures." The more logical interpretation is that angles, shapes and sections that have plates, stiffeners, or other structural elements bolted or welded onto them, are prepared for use in structures and are classifiable in heading 7308. The subject
H-beams are not so processed and are not provided for in heading 7308. HQ 950626, dated February 19, 1992, in part concerned the issue of whether beveling or perforating carbon steel plate constituted "further working" under heading 7208, HTSUS. Without further discussion, we agree that this decision does not control here.
To sustain a claim under 19 U.S.C. 1315(d), there must be evidence of a classification practice at one or more ports that is both uniform, i.e., consistent, and established, i.e., in existence over some period of time. It appears that while some entries of this merchandise at one port may have been liquidated under subheading
7216.33.00, HTSUS, when the H-beams were found to be drilled and punched, they were reclassified in liquidation under subheading 7216.99.00, HTSUS. Therefore, we conclude there is insufficient evidence of a uniform and established classification practice under 19 U.S.C. 1315(d) with respect to the drilled and punched H-beams at issue.
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Finally, as to the applicability of Section 201 duties to drilled and punched
H-beams 80 mm or more in height, Presidential Proclamation 7529 authorizes the assessment of such duties under subheadings 9903.73.42 through and including 9903.73.52, as appropriate, with respect to bars, rods and light shapes classifiable in subheading 7216.99.00. The exception to these additional duties that is relevant in this case concerns sections not further worked than hot-rolled, hot-drawn or extruded, with a height of 80 mm or more. But, the merchandise has been further worked beyond
hot-rolling by shaping, drilling and punching so that it would appear to fall outside the exception and thus, to be subject to the additional duties. However, a modification of this exception appeared in the November 14, 2002, edition of the Federal Register which, in effect, deleted the phrase "not further worked than hot-rolled, hot-drawn or extruded" from the affected text, and the modification given retroactive effect with respect to goods entered or withdrawn from warehouse for consumption on or after March 20, 2002, the effective date of Presidential Proclamation 7529. (Federal Register, Vol. 67, No. 220, November 14, 2002). As such, the H-sections at issue, with a height of 80 mm or more, classifiable in subheading 7216.99.00, are now within the stated exception and, thus, not subject to Section 201 duties.
HOLDING:
Under the authority of GRI 1, the hot-rolled carbon steel H-beams, 80 mm or more in height, cut-to-length, coped, drilled, punched or perforated, are provided for in heading 7216. They are classifiable in subheading 7216.99.00, HTSUS. Goods so classifiable are not subject to applicable Section 201 Duties authorized by Presidential Proclamation 7529.
We are providing a copy of this decision to the Port Director at Blaine for his information and guidance concerning any transactions that may currently be pending there.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division