CLA-2 OT:RR:CTF:TCM HQ H185699 TNA
Area Port Director
St. Louis Service Port
U.S. Customs and Border Protection
4477 Woodson Road St. Louis, MO 63134
Attn: Yvonne P. Williams, Senior Import Specialist
RE: Internal Advice Request 11/033; classification of a rolling mill and a rolling mill line
Dear Port Director:
This is in response to your Request for Internal Advice, dated August 11, 2011, initiated by Miller & Company, Inc., on behalf of its client, The Bradbury Company, Inc. (“Bradbury”), concerning the proper classification of a rolling mill and a rolling mill line under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
The subject merchandise consists of a rolling mill line, also called a rollforming line. Rolling mills are metal working machines that are used to flatten or shape metal by means of passing the metal through and across rollers. The subject rolling mill line is a cold metal rolling mill because it does not inject heat into the metal rolling process. It is principally used to roll steel but could be used to roll aluminum.
Bradbury’s rolling mill consists of different components that are assembled to make the complete rolling mill line. The first component is a decoiler, which unwinds the coiled steel. The steel then passes through feeding guides before passing through a number of stands that contain a varying number of rollers. The amount of shaping to be performed by the rolling process will dictate the number of rollers that are present. The rollers have adjustable gaps that are also set by the user to achieve the desired shape of the steel.
After the rolling process, the rolled steel passes through auxiliary equipment that is generally included in rolling mill lines, such as optical sensors, a guillotine, a stripper, and a run-off table. The sensors detect whether there is any material in the roll former. They also stop the rolling mill and guillotine if the mill is empty. The guillotine cuts the rolled steel to length. The stripper, which is a part of the guillotine, keeps the guillotine from pulling the steel off the rollers after cutting it. After being cut, the steel moves onto the run-off table and remains there until it is removed for warehousing, further production activities, or shipment to customers. The auxiliary equipment also includes control apparatus for various pieces of equipment on the line.
Bradbury requested this internal advice to clarify the classification of the subject merchandise in two different importation scenarios: 1. when the above-named components are imported together for post-importation installation into a complete rolling mill line, and 2. when the rolling mill is imported without the decoiler and run-off table.
ISSUES:
What is the classification of a complete rolling mill that is imported in separate components and assembled post-importation?
What is the classification of a rolling mill that is imported without a decoiler and run-off table?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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, GRIs 2 through 6 may then be applied in order. GRI 2(a) provides, in pertinent part, that:
Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
The HTSUS provisions under consideration are as follows:
8455 Metal-rolling mills and rolls therefor; parts thereof:
8462 Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above:
8466 Parts and accessories suitable for use solely or principally with the machines of headings 8456 to 8465, including work or tool holders, self-opening dieheads, dividing heads and other special attachments for machine tools; tool holders for any type of tool for working in the hand:
Note 4 to Section XVI, HTSUS, provides, in pertinent part, the following:
Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
The EN to heading 8455, HTSUS, provides, in pertinent part:
Rolling mills are metal working machines consisting essentially of a system of rollers between which the metal is passed; the metal is rolled out or shaped by the pressure exerted by the rollers, and at the same time the rolling modifies the structure of the metal and improves its quality. In some cases, in addition to their normal functions, rolling mills may be used to produce a pattern on the metal surface, or to roll together two or more sheets of different metals to produce a laminated product….
Rolling mills are of various types according to the particular rolling operations for which they are designed, viz. :
(A) Rolling out to reduce the thickness with a corresponding increase in length (e.g., in the rolling of ingots into blooms, billets or slabs; rolling of slabs into sheet, strip, etc.).
(B) Rolling of blooms, billets, etc., to form a particular cross section (e.g., in the production of bars, rods, angles, shapes, sections, girders, railway rails).
(C) Rolling tubes.
(D) Rolling of wheel blanks or wheel rim blanks (e.g., to shape the flanges of railway wheels).
The EN to heading 8462, HTSUS, provides, in pertinent part:
The heading covers certain machine tools, listed in the heading text, which work by changing the shape or form of metal or metal carbides.
In general machine tools are power driven but similar machines, worked by hand or pedal, are also covered by this heading. These latter types can be distinguished from the hand tools of heading 82.05 and from the tools for working in the hand of heading 84.67, by the fact that they are usually designed to be mounted on the floor, on a bench, on a wall or on another machine, and are thus usually provided with a base plate, mounting frame, stand, etc….
PARTS AND ACCESSORIES
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts and accessories (other than the tools of Chapter 82) of the machine tools of this heading are classified in heading 84.66.
The EN to heading 8466, HTSUS provides, in pertinent part:
With the exception of the tools of Chapter 82 and subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), this heading covers:
(A) Parts of the machine tools of the ten preceding headings, 84.56 to 84.65.
(B) Accessories for these machine tools, that is, subsidiary devices used in connection with machine tools, such as interchangeable devices which modify the machine tool so that it can perform a wider range of operations; devices to increase precision; devices which perform a particular service relative to the main function of the machine….
I. Classification of the complete rolling mill
Counsel argues that the complete rolling mill should be classified in heading 8455, HTSUS, which provides for “Metal-rolling mills and rolls therefor; parts thereof.” We agree.
Heading 8455, HTSUS, provides eo nomine for “metal rolling mills, rolls and parts thereof.” A “rolling mill” is defined as “a mill in which rollers are used for crushing or flattening,” and in particular, “a machine or (more commonly) a factory where rollers are used to flatten or shape metal.” See www.oed.com. Furthermore, EN 84.55 defines rolling mills as metal working machines consisting of a system of rollers between which the metal is passed and is rolled out or shaped by the pressure exerted by the rollers. See EN 84.55. EN 84.55 also describes the various types of rolling mills that are described by heading 8455, HTSUS, including those that roll out to reduce the thickness of the metal with a corresponding increase in length, such as the rolling of ingots into blooms, billets or slabs, or the rolling of slabs into sheet, strip, etc. See EN 84.55.
The subject merchandise unwinds rolled steel before passing the steel through various rollers that shape it. After being shaped, the steel is cut to length before being removed from the machine for either warehousing or shipping to customers. As such, the subject merchandise meets the definition of a metal rolling mill. It also comports with the exemplars of EN 84.55. As such, it is described by the terms of heading 8455, HTSUS, and is specifically provided for in subheading 8455.22.00, HTSUS, which provides for “Metal-rolling mills and rolls therefor; parts thereof: Other rolling mills: Cold.”
II. Classification of the rolling mill imported without a decoiler and run-off table
In the second scenario for which Bradbury seeks classification advice, the subject rolling mills are imported without two of the pieces that allow it to function: the decoiler and the run-off table. Counsel argues that this incomplete rolling mill should be classified in accordance with NY N018396, dated November 6, 2007. There, CBP found that a rolling mill line consisting of a stand for mounting copper wire, a flat rolling stand, an upright rolling stand, other rolling stands, emulsion equipment, compressed air equipment, and an optical measuring device were classified in subheading 8455.22.00, HTSUS, because they formed a complete functional unit intended to contribute together to the clearly defined function of rolling the metal.
Note 4 to Section XVI, HTSUS, provides that where a machine consists of individual components intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function. See Note 4 to Section XVI, HTSUS.
In addition, with respect to unfinished or incomplete goods such as the subject rolling mill, CBP has held that GRI 2(a), HTSUS, extends the scope of a 4-digit heading to include an article, whether assembled or unassembled, that is imported incomplete or unfinished. In order to be classified in accordance with GRI 2(a), the imported article must have the essential character of the complete or unfinished good. Furthermore, CBP has found that Note 4 to Section XVI, HTSUS, is the authority under GRI 1 for classifying a series of machines or components in a 4-digit heading describing a clearly defined function performed by the goods. Given the relationship between GRI 1 and GRI 2(a) in determining the scope of headings, CBP has stated that it follows that GRI 2(a) may also be applied to determine whether under GRI 1 a series of machines or components may qualify for classification under Section XVI, Note 4, even if imported incomplete or unfinished. In the context of GRI 2(a), CBP has explained that the term “essential character” means the attribute that serves to distinguish what an article is; that which is indispensable to the structure, core, or condition of the good; the aggregate of distinctive component parts that establishes the identity of an article as what it is, its very essence. See HQ 967975, dated March 24, 2006; see also HQ 965637, dated July 16, 2002.
In the present case, the subject mill line, when imported without the decoiler and run-off table, is admittedly incomplete, but it is still comprised of machines which, together, possess the essential character of a complete rolling mill line because the rolls that shape the metal are still present. As such, even when imported incomplete as described, the subject merchandise is described by the terms of heading 8455, HTSUS, and is specifically provided for in subheading 8455.22.00, HTSUS. This classification is consistent with prior CBP rulings. See NY N018396; NY N174796, dated August 4, 2011 (classifying a 160 inch Plate Mill Heat Treatment Leveler imported disassembled as replacement steel manufacturing equipment for use in a steel plate rolling mill as a rolling mill of heading 8455, HTSUS).
HOLDING:
By application of GRI 1 (Note 4 to Section XVI, HTSUS), the complete rolling mill is classified in heading 8455, HTSUS. It is specifically provided for in subheading 8455.22.00, HTSUS, which provides for “Metal-rolling mills and rolls therefor; parts thereof: Other rolling mills: Cold.” The applicable duty rate is free. By application of GRI 1 (Note 4 to Section XVI, HTSUS) GRI 2(a), the incomplete rolling mill, imported without the decoiler and run-off table, is classified in heading 8455, HTSUS. It is specifically provided for in subheading 8455.22.00, HTSUS, which provides for “Metal-rolling mills and rolls therefor; parts thereof: Other rolling mills: Cold.” The applicable duty rate is free.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division