CLA-2 OT:RR:CTF:TCM H154037 LWF
Port Director
United States Customs and Border Protection
Port of Buffalo
726 Exchange Street, Suite 400
Buffalo, NY 14210
Attn: Lawrence J. Mruk, Supervisory Import Specialist
Re: Internal Advice Request; Classification and Assessment of Antidumping Duties on Pipe Fittings; Headquarters File No. H154037
Dear Port Director:
This ruling is in response to a request for internal advice initiated by Barlow and Associates, PLLC, on behalf of its client, Westinghouse Air Brake Technologies Corporation (“Wabtec”). At issue is the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of certain pipe fitting combinations, consisting of cast iron flanges and steel swivels that are packaged together and used to connect pipes and hoses in pneumatic air brake systems. Also at issue is the scope of antidumping duties (ADD) on cast iron flanges from China, and whether such ADD are properly applied against the total value of the pipe fitting combinations, including the value of the steel swivels. The request for internal advice is sought based upon Wabtec’s disagreement with a letter from U.S. Customs and Border Protection (CBP) on August 9, 2010, advising that the two pipe fittings would be classified as a single, two-component fitting and would be subject to ADD applicable to the value of both components.
FACTS:
The merchandise at issue is a combination pipe fitting, designed for use with pneumatic braking equipment on freight and passenger rail transportation systems. Counsel for Wabtec identifies the pipe fitting as a “Combination Pipe Fitting” that consists of two parts, one cast iron flange and one steel swivel. Although the cast iron flanges and steel swivel fittings are often sold, shipped, and classified individually, in this application, one flange and one swivel are packaged together and sold to direct purchasers under a new part number as a Combination Pipe Fitting.
CBP submitted a sample of the Combination Pipe Fitting for laboratory testing to determine the composition and mass of each component. See CBP Lab Report No. NY20120079, dated January 20, 2012, and CBP Lab Report No. NY20120470, dated April 11, 2012. Analysis of the sample shows that the cast iron flange is composed on non-malleable cast iron containing 1.7% silicon. It measures approximately 101.5 millimeters in length and has a mass of 159.3 grams. The steel swivel is composed of non-alloy steel containing 0.21% carbon, 0.24% silicon, 0.48% manganese, 0.01% nickel, 0.06% chromium, and 0.01% vanadium. It measures approximately 30.2 millimeters in height and has a mass of 207.7 grams.
The cast iron flange has an inside ridge within the circumference of its center opening that allows it to receive the steel swivel. The male swivel fits inside the center opening of the flange and has an exterior lip which is mated with the inside ridge of the flange. When the two components are put together, they create a seal that allows for the connecting of the bores of two pneumatic pipes or hoses. Counsel states that the cast iron flanges are typically made in China. The steel swivels are made in various countries, including Canada, China, and Germany. Counsel also states that the steel swivels are significantly more expensive than the cast iron flanges.
ISSUE:
Whether the Combination Pipe Fitting is a tube or pipe fitting of subheading 7307.11, HTSUS, of cast iron, or of subheading 7307.99, HTSUS, of other metal.
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, the remaining GRIs 2 through 6 may then be applied in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
GRI 2(a) provides, in pertinent part, as follows:
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 completed or finished by virtue of this rule), entered unassembled or disassembled.
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The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to GRI 2(a) provide, in pertinent part, that:
The first part of Rule 2(a) extends the scope of any heading which refers to a particular articles to cover not only the complete article bust also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.
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The HTSUS subheadings under consideration are as follows:
7307 Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel:
Cast fittings:
7307.11.00 Of nonmalleable cast iron…
…
Other:
7307.99 Other:
7307.99.50 Other…
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EN 73.07 provides in pertinent part as follows:
This heading covers fittings of iron or steel, mainly used for connecting the bores of two tubes together, or for connecting a tube to some other apparatus, or for closing the tube aperture. This heading does not however cover articles used for installing pipes and tubes but which do not form an integral part of the bore (e.g., hangers, stays and similar supports which merely fix or support the tubes and pipes on walls, clamping or tightening bands or collars (hose clips) used for clamping flexible tubing or hose to rigid piping, taps, connecting pieces, etc.) (heading 73.25 or 73.26).
The connection is obtained:
by screwing, when using cast iron or steel threaded fittings;
or by welding, when using butt welding or socket welding steel fittings. In the case of butt welding, the ends of the fittings and of the tubes are square cut or chamfered;
or by contact, when using removable steel fittings.
This heading therefore includes flat flanges and flanges with forged collars, elbows and bends and return bends, reducers, tees, crosses, caps and plugs, lap joint stub ends, fittings for tubular railings and structural elements, off sets, multi branch pieces, couplings or sleeves, clean out traps, nipples, unions, clamps and collars.
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The Combination Pipe Fitting is composed of a cast iron flange and steel swivel. It is used to connect the bores of pneumatic pipes and hoses, and therefore, it falls within the description provided in EN 73.07. As such, there is no dispute that the Combination Pipe Fitting and its individual parts are classified in heading 7307, HTSUS, which provides for “Tube or pipe fittings (for example, couplings, elbows, sleeves), or iron or steel.” At issue is the proper eight-digit national tariff rate.
GRI 2(a) states 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 presented, the incomplete or unfinished article has the essential character of the completed or finished article…” EN (V) and (VII), to GRI 2(a), are particularly helpful in understanding the scope of GRI 2(a) as it applies to the imported merchandise and contain the following guidance:
(V) The second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.
(VII) For the purposes of this Rule, “articles presented unassembled or disassembled” means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved.
No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to any further working operation for completion into the finished state.
Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately.
In this case, it appears that because each packing carton contains one flange and one swivel, an essentially complete pipe fitting has been presented unassembled for convenience of packing, handling or transport. CBP has no specific information as to any particular fixing devices or post-importation assembly operations that may be used. It is clear, however, that only simple assembly operations by means of bolts in the flange would be required to assemble the flange and swivel components into a finished pipe fitting. No further working operations are performed on the components, and the packing carton does not contain components in excess of the number required. Consequently, the Combination Pipe Fitting is properly described as an unassembled, complete article. As such, the central issue herein is whether the unassembled Combination Pipe Fitting possesses the essential character of “nonmalleable cast iron fittings,” provided for under subheading 7307.11.00, HTSUS.
The longstanding position of CBP is that the term "essential character" for purposes of GRI 2(a) means the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article. See HQ H013671, dated January 16, 2009 (citing HQ 956538, dated November 29, 1994). The essential character for purposes of GRI 2(a) is determined on a case-by-case basis in consideration of the nature of a given article.
The first factors that CBP looks to for determining the essential character of the Combination Pipe Fitting are those factors identified in EN VIII to GRI 3(b), including the nature of the material and the role of a constituent material in relation to the use of the good. To determine the nature of the Combination Pipe Fitting’s material, we consider the bulk, quantity, weight, or value of each material. In this case, the steel swivel (207.7g) weighs substantially more than the cast iron flange (159.3g). Furthermore, counsel for Wabtec states that the steel swivel is substantially more expensive than the cast iron flange. As such, we find that the essential character of the Combination Pipe Fitting is provided by the steel swivel.
In its request for internal advice, Wabtec states that it has also filed a ruling request with the Department of Commerce to determine whether the scope of an Antidumping Duty Order on cast iron pipe fittings from China includes the entire, instant unassembled pipe fitting of cast iron and steel or only the cast iron portion of the merchandise. See Notice of Antidumping Duty Order: Non-Malleable Cast Iron Pipe Filings From the People's Republic of China, A-570-875, 68 Fed. Reg. 16765 (April 7, 2003) (“ADD Order: A-570-875”). The merchandise in question may be subject to antidumping duties or countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection. Wabtec can contact them at http://www.trade.gov/ia/ (click on “Contact Us”). Wabtec can also view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and can search AD/CVD deposit and liquidation messages using ACE, the system of record for AD/CVD messages, or the AD/CVD Search tool at http://addcvd.cbp.gov/index.asp?ac=home.
HOLDING:
By application of GRI 6 and GRI 3(b), the Combination Pipe Fitting is provided for in heading 7307, HTSUS. Specifically, it is classifiable in subheading 7307.99.50, HTSUS, which provides for “Tube or pipe fittings (for example, couplings, elbows, sleeves), of iron or steel: Other, of stainless steel: Other: Other.” The column one, general rate of duty under this provision in 2010 is 4.3 percent ad valorem.
You are to mail this decision to counsel for the internal advice requester no later than sixty days from the date of this decision. At that time, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public, on the CBP Home Page on the World Wide Web at http://www.cbp.gov, by means of the Freedom of Information Act, and other methods of publication.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division