CLA-2 RR:CR:GC 966927 RSD
TARIFF NOs. 7304.39.00, 7306.30.50, 7307.91.50.70, 7307.99.50.60
Mr. Barry Morgan
General Manager
Esser Twin Pipes, LLC
147 Airpark Industrial Road
Alabaster, Alabama 35007
RE: Steel pipe, tapered pipes and pipe fittings that are used in concrete pumping equipment; NY J8873 affirmed
Dear Mr. Morgan:
This is in response to your letter of November 20, 2003, requesting reconsideration of New York Ruling (NY) J88733, dated October 15, 2003, concerning the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of steel pipes, tapered pipes and pipe fittings used with concrete pumping machines. The National Commodity Specialist Division of U.S. Customs and Border Protection, (CBP), New York, forwarded your letter with its attachments to the Office of Regulations and Rulings for a decision on your request for reconsideration.
FACTS:
Esser Twin Pipes imports parts for Original Equipment Manufacturers (OEMs) of concrete pumps in the United States. You indicate that more than 98 percent of Esser’s sales consists of four main articles that are used with concrete pumps. These articles are twin straight length wall pipes, twin wall reducers, twin wall bends, and twin wall flanges of various dimensions and chemistries.
Concrete pumps are mobile units that are used to deliver concrete at construction sites where it is necessary to transport concrete across some distance (horizontal or vertical) from the mixer truck. From the mixer, the concrete is poured into a hopper and moved by pistons through the deck assembly that is mounted on the truck chassis. A pump located at the end of the deck assembly is used to move the concrete through the boom assembly. The boom assembly can be as long as 61 meters and can be swiveled, raised and lowered. When the job is completed, the boom assembly is folded down onto the deck assembly before the truck can be moved. The hydraulic and pneumatic transport of concrete through the pump causes high wear in the pipes. Each of the parts of the deck assembly and the boom assembly must be precision engineered of wear-resistant and pressure-resistant materials.
In addition, they must be customized for booms for varying lengths and for the individual specifications of the competing OEMs.
The twin pipes consist of two layers, an inner layer of carbon steel (similar to Grade 1045 steel) and an outer layer of alloy steel. The inner and outer layer pipes are produced separately. The inner pipe is inserted into the outer pipe, heated and then quenched with water. The water causes the outer pipe to shrink and bind itself to the inner pipe, which retains its diameter. After hardening, the pieces are cut to the exact length with an abrasive cut-off machine. The flanges are then welded on while the inner pipe is cooled.
Esser produces specialized twin layer pipeline components in various sizes up to a maximum inside diameter (ID) of 150 mm. The pipe sizes vary according to their intended locations throughout the truck mounted boom pumps. These pipes are not common sized pipes, but are made to the specifications of each model of each OEM.
The second product under consideration is called a reducer. Reducers are tapered cylinders that are used in the deck assembly to connect different sized pipeline components. The reduction of size in the pipeline components is necessary because the boom of the concrete pump cannot support all the weight of the largest pipeline components. A process that is similar to the process used to make the straight-length pipeline components is employed to make the reducers. They are customized to the specifications of each OEM.
The third product under consideration is referred to as bends. Bends are curved sections of twin layer material used throughout the deck and boom assembly to connect one pipeline component to another in a way that enables a change of direction in the flow of concrete or to allow the boom to be maneuvered, folded and unfolded. The process used to manufacture the bends is similar to the process used to produce straight-length pipeline components and the reducers. They are fabricated using a stem hardening process on the cast inner pipe and mounted in a mild steel outer pipe and fitted with patented Esser twin cast flanges at both ends.
The fourth product being considered is the twin cast flanges. They are designed to be attached to each end of all pipeline components. When coupled together using the correct gasket, a sealing joint is formed that allows for the pumping of concrete as well as the manipulation of the boom. The twin cast flanges are made of mild steel similar to ST 52. The outer layer is machined to the OEM specifications. It is necessary to import loose twin cast flanges to permit the pipeline components to be cut to the length required by the customers before they are permanently welded in place. The finished straight line pipe components, reducers, flanges, and bends are sold directly to OEMs of concrete pumping equipment in the United States as well as to numerous pump end users.
ISSUES:
Whether the seamless straight length steel pipes and reducers are classified in heading 7304, HTSUS, as tubes, pipes and hollow profiles seamless of iron or steel or in heading 8413, HTSUS as parts of concrete pumps.
Whether the seamed and welded steel pipes and reducers are classified in heading 7306, HTSUS as other tubes, pipes and hollow profiles of iron or steel or in heading 8413, HTSUS as parts of concrete pumps.
Whether the bends and flanges are classified in heading 7307, HTSUS as tube or pipe fittings of iron or steel, or in heading 8413 as parts of concrete pumps.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI’s). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The Harmonized Commodity Description And Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s 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 EN’s should always be consulted. See T.D. 89 80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The HTSUS provisions under consideration are as follows:
7304 Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel:
Other, of circular cross section of iron or nonalloy steel
* * * * * * * * * * *
7306 Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel:
* * * * * * * * * * * *
7307 Tube or pipe fittings (for example, couplings elbows, sleeves), of of iron or steel:
* * * * * * * * * * * *
8413 Pumps for liquids, whether or not fitted with a measuring device:
liquid elevators; parts thereof:
* * * * * * * * * * * *
The ENs provide a general description of the term pipes and tubes. They also indicate that pipes, tubes and fittings classified in the relevant headings of Chapter 73 of the HTSUS will often used be in various structures and mechanical systems.
With respect to pumps, EN 84.13 explains that:
This heading covers most machines and appliances for raising or otherwise continuously displacing volumes of liquids (including molten metal and wet concrete), whether they are operated by hand or by any kind of power unit, integral or otherwise.
You contend that the subject merchandise is properly classified in heading 8413, HTSUS, as parts of concrete pumps because the pipes, reducers, flanges, and bends are specially designed to work only with specified concrete pumps to transport liquid concrete. Furthermore, you point out the articles have no other plausible usage other than working with concrete pumps. In determining whether articles such as the subject merchandise are considered parts, it is a well-established rule that a part of an article is something necessary to the completion of that article. It is an integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article. United States v. Willoughby Camera Stores, Inc., 21 CCPA 322, 324, T.D. 46,851 (1933), cert denied, 292 U.S. 640 (1934). The rule set out in Willoughby Camera has been modified over the years so that a device may be a part of an article even though the device is not necessary to the operation of the article, provided that once the device is installed the article cannot function properly without it. To meet this test, the device must be dedicated for use upon the article. See Beacon Cycle & Supply Co., Inc. v. United States, 81 Cust. Ct. 46, 50-51, C.D. 4764 (1978).
Additional U.S. Rule of Interpretation 1(c) provides:
In the absence of special language or context which otherwise requires ... a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for "parts" or "parts and accessories" shall not prevail over a specific provision for such part or accessory[.]
By its terms, Additional U.S. Rule 1(c), HTSUS, applies in the absence of special language or context which otherwise requires. Section XVI, Note 2 is such special language or context, but only where the competing provisions at issue are both within Section XVI. See Nidec Corp. v. United States, 861 F. Supp. 136, aff’d 68 F. 3d 1333 (Fed Cir. 1995). However, in this case, because the competing provisions, headings 7304, 7306, 7307 HTSUS, are outside of Section XVI, Note 2 to that section does not provide special language or context which supercedes Additional U.S. Rule of Interpretation 1(c), HTSUS.
In the case at hand, we note that the concrete pumps can operate without the pipes, reducers, bends, and flanges. Thus the subject merchandise is not necessary to complete concrete pumps. In addition, the pipes and the other articles under consideration are not among the items that are mentioned in EN 84.13 as pump parts. Therefore, we do not believe that the subject articles should be considered parts of the concrete pumps. Moreover, headings 7304, 7306, and 7307, HTSUS, which are particular headings for pipes, tubes and pipe fittings provide more specific descriptions of the subject merchandise than heading 8413, HTSUS a heading for liquid pumps which includes parts. Consequently, based on the application of U.S. Additional Note 1(c), HTSUS, we conclude that the headings 7304, 7306, and 7307, HTSUS for pipes, tubes and pipe fittings should prevail over heading 8413, HTSUS, for pump parts. Accordingly, we find that the straight length seamless pipes and reducers are classified in heading 7304, HTSUS. We have been advised that carbon steel predominates by weight over the other materials in the straight length pipes under consideration. In accordance with Section XV Note 7, the straight length seamless pipes and reducers are classified in subheading 7304.39.00, HTSUS; which provides for tubes, pipes, and hollow profiles, seamless, of iron (other than cast iron) or steel, other of circular cross section, of iron or nonalloy steel, other.
In the case of the seamed or welded straight length pipes and the reducers, we have been advised that carbon steel also predominates by weight for these articles. Therefore under Section XV Note 7, they are classified in subheading 7306.30.50, HTSUS, which provides for tubes, pipes and hollow profiles, (for example, open seamed or welded, riveted or similarly closed) of iron or steel, other welded of circular cross section of iron or nonalloy steel, having a wall thickness of 1.65 mm or more, other.
With respect to the bends and the flanges, Section XV Note 2(a), defines “parts of general use” as articles of heading 7307, 7312, 7315, 7317 or 7318, HTSUS, and similar articles of base metals. Section XVI, Note 1(g), indicates that parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39) are excluded from classification in Section XVI. Chapter 84 is included in Section XVI. Therefore, the bends and flanges are excluded from being classified in 8413, HTSUS. This supports a finding that the bends are classified in heading 7307.99.50, HTSUS, which provides for tube or pipe fittings (for example, couplings elbows, sleeves), of iron or steel, other, other, other. The flanges produced by a forging process are classified in subheading 7307.91.5070 as [T]ube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: [O]ther: Flanges: [N]ot machined, not tooled and not otherwise processed after forging: of alloy steel (except stainless steel).
HOLDING:
NY J88733 is affirmed.
The straight length pipes reducers where the carbon steel predominates by weight which are seamless are classified in subheading 7304.39.00, HTSUS, which provides for: [T]ubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: [O]ther. Classification at the ten-digit statistical level depends upon the diameter and wall thickness of the pipes. The general column one rate of duty for these articles is free. Current information regarding classification at the ten-digit level for straight length pipes is available at the web site of the International Trade Commission at www.usitc.gov.
The seamed or welded straight length pipe and the reducers where carbon steel predominates by weight are classified in subheading 7306.30.50, HTSUS, which provides for: [O]ther tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel: [O]ther welded, of circular cross section, of iron or nonalloy steel: [H]aving a wall thickness of 1.65 mm or more: [O]ther.. The general column one rate of duty for these articles is free.
The bends are classified in heading 7307.99.5060 Harmonized Tariff Schedule of the United States Annotated (HTSUSA) that provides for: [T]ube or pipe fittings (for example, couplings elbows, sleeves), of iron or steel: [O]ther: [N]ot machined, not tooled and not otherwise processed after forging: [O]ther, of alloy steel (except stainless steel). The general column one rate of duty for the bends is 4.3 percent ad valorem.
The flanges if produced by a forging process are classified in heading 7307.91.5070, HTSUSA, as: [T]ube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: [O]ther: Flanges: [N]ot machined, not tooled
and not otherwise processed after forging: of alloy steel (except stainless steel). The general column one rate of duty for the flanges is 3.2 percent ad valorem.
Pursuant to the termination of the Section 201 steel safeguard measures, as provided by Presidential Proclamation 7741, of December 4, 2003, steel tubes, pipes, and fittings classified in the foregoing subheadings, entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m., EST, December 5, 2003, is no longer subject to additional ad valorem duties. See 68 Fed. Reg. 68483, 68485 (Dec. 8, 2003).
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division