[Federal Register Volume 84, Number 128 (Wednesday, July 3, 2019)]
[Notices]
[Pages 31879-31885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14230]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
[USCBP-2019-0012]
Notice of Decision on Domestic Interested Party Petition
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of decision on domestic interested party petition.
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SUMMARY: This document provides notice of U.S. Customs and Border
Protection's (CBP) decision regarding the tariff classification of
certain steel special profiles for the manufacture of forklift truck
masts and carriages. On April 3, 2019, CBP published in the Federal
Register a Notice of Receipt of a Domestic Interested Party Petition,
regarding the classification, under the Harmonized Tariff Schedule of
the United States (HTSUS), of the subject steel special profiles. The
Petition asked CBP to review the classification of these products and
revoke New York Ruling Letter (NY) N293371, dated February 8, 2018.
After reviewing 14 comments received in response to the Petition, CBP
has issued a decision agreeing with Steel of West Virginia, Inc.
(Petitioner) and revoking NY N293371, supra, as well as NY F83480,
dated March 13, 2000, which pertained to merchandise substantially
similar to the subject steel special profiles. This Notice advises
Petitioner and all interested parties of CBP's determination.
DATES: July 3, 2019.
FOR FURTHER INFORMATION CONTACT: Albena Peters, Chemicals, Petroleum,
Metals and Miscellaneous Articles Branch, Regulations and Rulings,
Office of Trade, U.S. Customs and Border Protection at (202) 325-0321.
SUPPLEMENTARY INFORMATION:
Background
This document concerns the tariff classification of certain steel
special profiles for the manufacture of forklift truck masts and
carriages.
Classification of Nonalloy Steel Special Profiles
Merchandise imported into the customs territory of the United
States is classified under the HTSUS. The tariff classification of
merchandise under the HTSUS is governed by the principles set forth in
the General Rules of Interpretation (GRIs). The GRIs are part of the
HTSUS and are to be considered statutory provisions of law for all
purposes. See Section 1204 of the Omnibus Trade and Competitiveness Act
of 1988, Public Law 100-418 (Aug. 23, 1988); 19 U.S.C. 3004.
GRI 1 requires that classification be determined first according to
the terms of the headings of the tariff schedule and any relative
section or chapter notes and, provided such headings or notes do not
otherwise require, then according to the other GRIs. See GRI 1, HTSUS
(2019). GRI 6 prescribes that, for legal purposes, the classification
of goods in the subheadings of a heading shall be determined according
to the terms of
[[Page 31880]]
those subheadings and any related subheading notes and, mutatis
mutandis, according to GRIs 1 to 5, on the understanding that only
subheadings at the same level are comparable. See GRI 6, HTSUS (2019).
The Explanatory Notes to the Harmonized Commodity Description and
Coding System (Harmonized System) represent the official interpretation
of the World Customs Organization on the scope of each heading. See
H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988),
reprinted in 1988 U.S.C.C.A.N. 1547, 1582; Treasury Decision (T.D.) 89-
80, 54 FR 35127, 35128 (August 23, 1989). Although not binding on the
contracting parties to the Harmonized System Convention or considered
to be dispositive in the interpretation of the Harmonized System, it is
CBP's position that the Explanatory Notes should be consulted on the
proper scope of the Harmonized System. T.D. 89-80, 54 FR at 35128.
In NY N293371, dated February 8, 2018, the steel special profiles
are incomplete mast rails and finger bars (also known as carriage bars)
produced by Mannstaedt GmbH in Germany.\1\ The articles are imported
either cut to a fixed length in accordance with customer instructions
or in lengths designed to fit within the transporting cargo container.
The subject beams and bars are not joined to form the mast weldments in
their condition as imported. The beams need to be drilled and welded to
plates and cross bars before acquiring the shape and dimensions
necessary for assembly into a mast as well as cleaned to prepare them
for painting. The finger bars must be cut to size and notched in
specific places along their length depending upon their placement as
upper or lower bars, as well as cleaned, painted, and welded to the
actual carriage assembly. CBP previously classified the steel profiles
in subheading 8431.20.00, HTSUS, as parts suitable for use solely or
principally with forklifts of heading 8427, HTSUS.
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\1\ The Petitioner indicated that it believed the subject steel
special profiles were from the United Kingdom and Germany. It is
CBP's belief that the steel special profiles covered by NY N293371
are of German origin; however, the reasoning applicable in the
attached decision would apply equally to such products of U.K.
origin (which are at this time also subject to additional duties).
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Filing of Domestic Interested Party Petition
On October 3, 2018, counsel filed a Petition on behalf of Steel of
West Virginia, Inc., under section 516, Tariff Act of 1930, as amended
(19 U.S.C. 1516), requesting that CBP reconsider its decision in NY
N293371 and classify the subject steel special profiles under
subheading 7216.50.00, HTSUS, which provides for ``Angles, shapes and
sections of iron or nonalloy steel: Other angles, shapes and sections,
not further worked than hot-rolled, hot-drawn or extruded.'' The column
one, general rate of duty for subheading 7216.50.00 in 2018 and today
is free. However, on March 8, 2018, pursuant to section 232 of the
Trade Expansion Act of 1962 (19 U.S.C. 1862), Presidential Proclamation
9705 (83 FR 11625) imposed additional duties on steel products of
Germany of subheading 7216.50.00, HTSUS, and steel products of
subheading 7216.50.00 are currently subject to additional 25 percent
duties under Subchapter III, Chapter 99, U.S. Note 16(b), HTSUS.
Importers of such products must also identify subheading 9903.80.01,
HTSUS, at entry.
On April 3, 2019, CBP published a Notice of Receipt of a Domestic
Interested Party Petition in the Federal Register (84 FR 13057). The
Notice invited written comments on the Petition from interested
parties. The comment period closed on May 3, 2019. CBP received 14
comments in response to the Notice. Seven comments reiterated the
Petitioner's position that the merchandise should be classified in
subheading 7216.50.00, HTSUS, as other angles, shapes and sections. The
other seven commenters argued that the profiles should remain
classified in subheading 8431.20.00, HTSUS, as parts suitable solely or
principally with forklifts of heading 8427, HTSUS.
Decision on Petition and Notice of CBP's Decision
After review of the arguments set forth by Petitioner as well as
those set forth in the responses to the Federal Register Notice, CBP
has determined that the classification decision in NY N293371 was
incorrect. In HQ H303762, which is attached to this Notice, CBP has
granted the Domestic Party Petition and revoked the classification
determination set forth in NY N293371.
CBP determined in HQ H303762 that the articles at issue are not
parts of forklifts. By application of GRIs 1 and 6, the nonalloy steel
mast beams and finger bars in NY N293371 are steel special profile
shapes of heading 7216, HTSUS, classified specifically under subheading
7216.50.00, which provides for angles, shapes and sections of iron or
nonalloy steel, other angles shapes and sections, not further worked
than hot-rolled, hot-drawn or extruded. The instant merchandise,
imported in bundles of beams and bars of various sizes and shapes, is
described by the term ``angles, shapes, and sections'' set forth in
note 1(n) to chapter 72, whether or not the product is a standard shape
or a special shape designed for a particular application such as use in
a lifting mast for a forklift truck. It is simply the beams necessary
to compose the weldments that form the inner, intermediate, or outer
uprights of the completed mast and crossbars, which in turn are used to
construct a portion of the carriage. While the subject merchandise may
ultimately be destined for incorporation into a forklift, it is not
identifiable as such based on its condition as imported.
Specifically, the beams are not welded to the plates and bars
necessary to create the shape and dimensions of an inner, intermediate
or outer weldment of a mast. Similarly, the finger bars are not welded
to the frame for attachment between the carriage and mast. Without the
various cuts, notches, drilled holes and welding, which take place
post-importation, the subject beams and bars do not possess
characteristics that dedicate them for use in a forklift truck, or even
for the weldment of the lifting mast or carriage, based on their
condition as imported.
In light of the fact that the subject bars and beams do not have
the approximate size or shape of the forklift mast and carriage, or
even of the weldment components of the mast and carriage (i.e., they
are not identifiable as parts of a lifting mast), they cannot be
considered a part of a forklift or a ``blank'' of a forklift part.
Authority
This Notice is published in accordance with 19 U.S.C. 1516(b) and
Section 175.22(a) of the CBP Regulations (19 CFR 175.22(a)).
Dated: June 28, 2019.
John Sanders,
Chief Operating Officer and Senior Official, Performing the Functions
and Duties of the Commissioner, U.S. Customs and Border Protection.
HQ H303762
June 28, 2019
OT:RR:CTF:CPMM H303762 APP
CATEGORY: Classification
TARIFF NO.: 7216.50.0000; 9903.80.01
Ms. Tamara Browne
Schagrin Associates
900 Seventh Street N.W., Suite 500
Washington, D.C. 20001
RE: Steel Special Profiles; New York Ruling N293371; 19 U.S.C. Sec.
1516; 19 C.F.R. Part 175; Domestic Interested Party Petition
[[Page 31881]]
Dear Ms. Browne:
This letter is in response to the Petition by Domestic Interested
Party, dated October 2, 2018, filed on behalf of Steel of West
Virginia, Inc., pursuant to 19 U.S.C. Sec. 1516 and 19 C.F.R. Part
175. In accordance with 19 C.F.R. Sec. 175.21(a), U.S. Customs and
Border Protection (``CBP'') published a Notice titled ``Receipt of
Domestic Interested Party Petition Concerning the Tariff Classification
of Steel Special Profiles for the Manufacture of Forklift Truck Masts
and Carriages'' in the Federal Register, Volume 84, Number 64 on April
3, 2019. The Notice solicited comments, which were due by May 3, 2019.
We have reviewed all comments and our decision follows.
FACTS:
The subject of the Petition is the merchandise in New York Ruling
Letter (``NY'') N293371, dated February 8, 2018, issued to counsel for
Mannstaedt GmbH. The merchandise in NY N293371 is described as follows:
The merchandise in question is described as incomplete steel
mast rails and finger bars. The articles are imported either (1) cut
to a fixed length in accordance with customer instructions or (2) in
lengths designed to fit within the transporting cargo container. You
indicate that, in their condition as imported, the mast rails and
finger bars are not ready for direct use in fork-lifts. However, the
imported articles do have the approximate final shapes of the
finished articles. Each article is said to be ``manufactured to a
single customer's specifications for use in the lift system of a
specific fork-lift truck.'' Minor modifications may be made to the
articles subsequent to importation but the value of such operations
is said to be estimated substantially lower than the value of the
actual imported articles.
The mast rails are the vertical components responsible for
lifting, lowering and positioning the loads carried by the fork-
lift. The contoured channels in the mast rails are manufactured to
fit the specific mast guide bearings used in the fork-lifts. The
finger bars are the crossbars to which the forks of a fork-lift are
attached. They attach to the mast rails and travel the length of the
mast rails during the lifting operations.
A process flow diagram submitted with the ruling request for NY
N293371 describes the steps in manufacturing the imported ``forklift
section'' as: purchase, receipt, inspection and transportation of
blooms to furnace for heating and reheating in preparation for rolling,
descaling, rolling, hot saw to remove crop ends, saw to straightening
length, test samples and cool, in line and press straightening,
detwisting, recut, bundle, weigh and pack for shipment. The control
plan submitted with the ruling request notes that the product at the
rolling stage is a ``profile shape'' and the sample size for inspection
is the ``whole bar.''
In NY N293371, CBP classified Mannstaedt's mast rails and finger
bars (also known as carriage bars) in subheading 8431.20.00, Harmonized
Tariff Schedule of the United States (``HTSUS''), as parts suitable for
use solely or principally with forklifts of heading 8427, HTSUS.
Petitioner contends that the proper classification for the steel
special profiles is under heading 7216, HTSUS, and specifically under
subheading 7216.50.00, HTSUS, which covers angles, shapes and sections
of iron or nonalloy steel. The column one, general rate of duty for
both subheadings is free. On March 8, 2018, pursuant to section 232 of
the Trade Expansion Act of 1962 (19 U.S.C. Sec. 1862), Presidential
Proclamation 9705 (83 FR 11625) imposed additional duties on steel
products of Germany \2\ of subheading 7216.50.00, HTSUS, and steel
products of this subheading are currently subject to additional 25
percent duties under subchapter III, chapter 99, U.S. note 16(b),
HTSUS. Importers of products classified under subheading 7216.50.00,
HTSUS, must also identify subheading 9903.80.01, HTSUS, at entry.
Products of subheading 8431.20.00, HTSUS, on the other hand, are not
subject to section 232 duties.
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\2\ The Petitioner indicated that it believed the subject steel
special profiles were from the United Kingdom and Germany. It is
CBP's belief that the steel special profiles covered by NY N293371
are of German origin; however, the reasoning applicable in this
decision would apply equally to such products of U.K. origin (which
are at this time also subject to additional duties).
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SUMMARY OF COMMENTS:
In the April 3, 2019 Notice, CBP informed the public of the filing
of your Petition and invited interested parties to submit comments on
or before May 3, 2019. During the comment period, CBP received a total
of 14 comments. Seven comments support Petitioner's position and seven
comments are opposed to Petitioner's position. Comments were received
from steel special profiles manufacturers and suppliers, law firms,
Members of the U.S. Senate and U.S. House of Representatives, unions,
and local government officials.
Six commenters in favor of the Petition point out that Petitioner
and its employees are negatively affected by Mannstaedt's imports from
Germany and that the United States is deprived of section 232 duties,
and urge CBP to remedy the situation by reconsidering NY N293371. One
commenter opposing the Petition states that some of the comments
politicize tariff classification and disregard tariff classification
principles.
All seven commenters opposing the Petition claim that the profiles
have the shape or outline of finished beams and bars, are intended for
use as forklift parts at the time of importation and have no other
practical use, and the processing after importation is minor and
accounts for a relatively small percentage of the total value of the
merchandise. They also explain that the imported profiles have non-
standard shapes and are manufactured to the customer's specifications
and meet the exacting tolerances and quality standards for forklift
manufacturing.\3\
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\3\ The seven commenters in opposition to the Petition claim
that most profiles are cut to length before importation and are not
straightened; machining/torch cutting creates clearance for a load
roller and does not materially alter the shape of the profiles;
drilling and/or welding is a minor process; and that the profiles
may be subject to surface cleaning operations such as pickling,
oiling, and shot blasting to prepare them for painting.
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Two commenters in opposition to the Petition argue that the
profiles cannot be classified solely based on General Rule of
Interpretation (``GRI'') 1, and that under GRI 2(a), unfinished parts,
provided they have the essential character of the finished parts, are
classified as if they are finished parts. The commenters argue that the
incomplete mast rails and finger bars have the same form and basic
structure as the complete beams/bars and should therefore be considered
``blanks.'' \4\
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\4\ One commenter requested an opportunity to review exhibits 11
and 12 that were not released to the public. Members of the public
may file a Freedom of Information Act (``FOIA'') request at https://www.cbp.gov/site-policy-notices/foia.
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One commenter states that steel profiles are often made of alloy
steel and the profiles may be ineligible for heading 7216, HTSUS, which
applies only to iron and nonalloy steel. However, heading 7228, HTSUS,
contains the same legal language, ``angles, shapes and sections,'' for
profiles of ``other alloy steel.'' Therefore, the analysis as to
whether the instant merchandise is an unfinished part of a forklift
truck is unaffected whether the rails and bars are made of nonalloy or
alloy steel, and references to heading 7216, HTSUS, for nonalloy steel
will include identical merchandise when made of alloy steel of heading
7228, HTSUS.
ISSUE:
Whether the subject nonalloy steel mast rails and finger bars are
classified under heading 7216, HTSUS, as angles, shapes and sections of
iron or nonalloy steel, or under heading 8431, HTSUS, as
[[Page 31882]]
parts suitable for use solely or principally with forklifts.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the
HTSUS, in accordance with the GRIs. GRI 1 requires that classification
be determined first according to the terms of the headings of the
tariff schedule and any relative section or chapter notes and, unless
otherwise required, according to the remaining GRIs taken in order. In
the event that the goods cannot be classified solely on the basis of
GRI 1, and if the heading and legal notes do not otherwise require, the
remaining GRIs 2 through 6 may then be applied in order. Pursuant to
GRI 6, classification at the subheading level uses the same rules,
mutatis mutandis, as classification at the heading level.
GRI 2(a) states:
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:
7216 Angles, shapes and sections of iron or nonalloy steel:
7216.50.00 Other angles, shapes and sections, not further worked
than hot-rolled, hot-drawn or extruded
8427 Fork-lifts; other works trucks fitted with lifting or handling
equipment:
8431 Parts suitable for use solely or principally with the machinery
of headings 8425 to 8430:
8431.20.00 Of machinery of heading 8427
Note 1(f) to section XV, HTSUS, states that, ``This section does
not cover: . . . Articles of section XVI (machinery, mechanical
appliances and electrical goods).''
Note 2(b) to section XVI, HTSUS, states that parts that are
``suitable for use solely or principally with a particular kind of
machine . . . are to be classified with the machines of that kind or in
heading . . . 8431 . . . .''
In interpreting the HTSUS, the Harmonized Commodity Description and
Coding System Explanatory Notes (``ENs'') may be utilized. The ENs,
though not dispositive or legally binding, provide commentary on the
scope of each heading of the HTSUS, and are the official interpretation
of the Harmonized System at the international level. See T.D. 89-80, 54
Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to GRI 2(a) provide, in relevant part:
(I) The first part of Rule 2 (a) extends the scope of any
heading which refers to a particular article to cover not only the
complete article but also that article incomplete or unfinished,
provided that, as presented, it has the essential character of the
complete or finished article.
(II) The provisions of this Rule also apply to blanks unless
these are specified in a particular heading. The term ``blank''
means an article, not ready for direct use, having the approximate
shape or outline of the finished article or part, and which can only
be used, other than in exceptional cases, for completion into the
finished article or part (e.g., bottle preforms of plastics being
intermediate products having tubular shape, with one closed end and
one open end threaded to secure a screw type closure, the portion
below the threaded end being intended to be expanded to a desired
size and shape).
Semi[dash]manufactures not yet having the essential shape of the
finished articles (such as is generally the case with bars, discs,
tubes, etc.) are not regarded as ``blanks'' . . . .
The General ENs to chapter 72, note 1(n) describe angles, shapes,
and sections of chapter 72 as ``[p]roducts having a uniform solid
cross[dash]section along their whole length which do not conform to any
of the definitions at (ij), (k), (l) or (m) above or to the definition
of wire.''
EN 72.16 states, in pertinent part, the following:
Angles, shapes and sections are defined in Note 1 (n) to this
Chapter.
The sections most commonly falling in this heading are H, I, T,
capital omega, Z and U (including channels), obtuse, acute and right
(L) angles. The corners may be square or rounded, the limbs equal or
unequal, and the edges may or may not be ``bulbed'' (bulb angles or
shipbuilding beams).
Angles, shapes and sections are usually produced by
hot[dash]rolling, hot[dash]drawing, hot[dash]extrusion or hot-
forging or forging blooms or billets . . . .
The products of this heading may have been subjected to working
such as drilling, punching or twisting or to surface treatment such
as coating, plating or cladding--see Part IV (C) of the General
Explanatory Note to this Chapter, provided they do not thereby
assume the character of articles or of products falling in other
headings.
The heavier angles, shapes and sections (e.g., girders, beams,
pillars and joists) are used in the construction of bridges,
buildings, ships, etc.; lighter products are used in the manufacture
of agricultural implements, machinery, automobiles, fences,
furniture, sliding door or curtain tracks, umbrella ribs and
numerous other articles.
Petitioner is requesting that CBP reconsider the classification of
the nonalloy steel mast rails and finger bars described in NY N293371.
Petitioner contends that the merchandise is merely nonalloy steel
special profile shapes classifiable under heading 7216, specifically
under subheading 7216.50.00, HTSUS. Petitioner asserts that the use of
GRI 2(a) is inappropriate because the merchandise is a semi-
manufactured article, which meets the definition of an angle, shape, or
section in note 1(n) to chapter 72, HTSUS. Moreover, Petitioner
contends that the profiles must undergo significant manufacturing after
importation to create a part suitable for use in the mast or carriage
of a forklift.
The instant merchandise, which is imported in bundles of beams and
bars of various sizes and shapes, is certainly described by the term
``angles, shapes, and sections'' set forth in note 1(n) to chapter 72,
whether or not the product is a standard shape or a special shape
designed for a particular application such as use in a lifting mast for
a forklift truck. Heading 7216 includes U, I, H, L and T shapes as well
as ``other'' shapes, such as special profiles of non-standard cross-
section including those used in the manufacture of machinery and
automobiles. See EN 72.16. In Headquarters Ruling Letter (``HQ'')
966522, dated December 22, 1994, CBP concluded that, ``it is not
disputed that . . . S-shaped steel profiles [also known as upper
carriage bars] are classified in subheading 7216.50.00, HTSUS.'' CBP
has also classified similar incomplete nonalloy steel profiles in
subheading 7216.50.00, HTSUS. In NY N295858, dated May 3, 2018; NY
N295670, dated April 27, 2018; and NY J82683, dated April 18, 2003, CBP
classified nonalloy steel profiles used in the manufacture of forklift
truck attachments under subheading 7216.50.00. Like the products at
issue, the profiles in NY N295858 and NY N295670 were further machined,
assembled into a frame, and painted after importation.\5\ Similarly, in
NY I85271, dated September 13, 2002, CBP classified steel beams used in
construction that did not have the essential character of the finished
parts in heading 7216, HTSUS.\6\
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\5\ One commenter points out that in NY J82683, supra, the
attachments classified under heading 7216, HTSUS, could go on to
many vehicles; in NY N295670, supra, the frame profiles classified
under heading 7216, were made into a sliding arm clamp attachment
not for use as a mast or finger bar after importation; in NY
N295858, supra, the nonalloy steel profiles classified in heading
7216, HTSUS, were assembled into a frame, which was later made into
a clamp attachment not for use as a mast or finger bar. The
commenter misses the relevance of these rulings to the merchandise
under consideration. Although not specifically beams or bars for
masts or finger bars, the merchandise was in a similar state of
manufacture as the instant merchandise.
\6\ Two commenters in opposition to the Petition cite to HQ
965520, dated July 9, 2002, where elevator guide rails, which were
cut to length, had the same shape as the finished article, and were
subject to additional processing after importation, were classified
in heading 8431, HTSUS. Elevator guide rails do not appear to be
incorporated into a lifting mast but rather are installed in the
elevator shaft. We are currently reviewing the analysis in HQ
965520, as well as in NY I81164, dated May 21, 2002, and
NY A82738, dated May 13, 1996, and intend to initiate a process
under 19 U.S.C. Sec. 1625 to allow maximum degree of notice.
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[[Page 31883]]
Accordingly, the merchandise at issue here is classifiable in
heading 7216, HTSUS, by virtue of being worked, unless it has assumed
the character of a part of a forklift.
In defining a ``part'' for tariff classification purposes, the
courts have fashioned two distinct, but not inconsistent, tests for
determining whether a particular item qualifies as such. See Bauerhin
Techs. Ltd. P'ship v. United States, 110 F.3d 774, 778-79 (Fed. Cir.
1997). Under the first test, articulated in United States v. Willoughby
Camera Stores, Inc. (``Willoughby''), 21 C.C.P.A. 322, 324, T.D. 46851
(1933), an imported item is a part only if it is ``something necessary
to the completion of that article without which the article to which it
is to be joined, could not function as such article.'' The second test,
set forth in United States v. Pompeo, 43 C.C.P.A. 9, 14, C.A.D. 602
(1955), equates ``part'' to ``an imported item dedicated solely for use
with another article.'' Bauerhin, 110 F.3d at 779 (citing Pompeo, 43
C.C.P.A. at 13).
However, before examining whether the goods in question satisfy one
or both of the aforementioned tests, we note that they only qualify to
be ``parts'' of the good (a forklift) if they bear a ``direct
relationship'' to the good, such that the good is the ``primary
article'' of which the item is a component. See HQ 255855, dated May
27, 2015. Otherwise, as the Court of International Trade (``CIT'') and
its predecessor, the Customs Court, have held, the item will be
considered merely a ``part'' of whatever intermediate part constitutes
the primary article. See Mitsubishi Elecs. Am. v. United States, 19 CIT
378, 383 n.3, 882 F. Supp. 171, 175 n.3 (1995) (``[A] subpart of a
particular part of an article is more specifically provided for as a
part of the part than as a part of the whole.''); Liebert v. United
States, 60 Cust. Ct. 677, 686-87, 287 F. Supp. 1008, 1014, Cust. Dec.
3499 (1968) (holding that parts of clutches, which clutches are in turn
parts of winches, are more specifically provided for as parts of
clutches than as parts of winches).
CBP has consistently adhered to this principle by excluding parts
of ``primary articles'' from HTSUS ``parts provisions'' where the
primary articles themselves are parts classifiable in such provisions.
For example, in HQ H169057, dated September 4, 2014, CBP ruled that a
front frame designed to reinforce a wind engine, which in turn
constituted one of two components of a wind generator, could not be
classified as part of the wind generator itself. Similarly, HQ H005091,
dated January 24, 2007, excluded from heading 8708, which provides for
motor vehicle parts, a trunk assembly that constituted one of several
component parts of an automobile trunk lock. See also HQ 020958, dated
November 28, 2008; HQ 963325, dated September 15, 2000. In sum, it is
not enough that an item will eventually form a portion of another
article. Rather the item must be processed to the point where it is no
longer recognizable as a profile but instead has the character of a
finished part.
In the instant case, finished mast beams and finger bars are
eventually welded to other components of a forklift mast, a complex
assembly of interlocking weldments formed of beams, bars, plates and
tubing containing, rollers, bearings, brackets, chains and pulleys, and
ultimately a hydraulic ram. For instance, as described by one forklift
retailer, ``. . . the mast is the vertical assembly on the front of the
forklift that does the work of raising, lowering, and tilting the load.
Most masts are `three stage' meaning there are three channels on each
side. The channels are similar in appearance to I-Beams.'' \7\ Another
states that, ``The mast is the vertical structure of a forklift that
provides a supporting pathway for the carriage rollers and allows the
forklift to raise and lower the forks and material it's carrying''.\8\
From these descriptions, it is clear that a vertical lifting mast is
comprised of much more than beams. The finger bars are horizontal cross
bars that are components of the carriage assembly and attach to the
mast beams across the front of the lift truck. The carriage assembly is
fitted with the forks. Even though the full mast and carriage assembly
may be classifiable under heading 8431, HTSUS, as a part of a forklift,
heading 8431, HTSUS, does not cover parts of parts of machines of
headings 8425 to 8430.
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\7\ See Mast Types and Their Advantages, https://www.summithandling.com/mast-types-advantages/ (last viewed May 31,
2019).
\8\ See Glossary of Forklift Terminology and Definitions,
https://www.mcfa.com/en/mcfa/resources/glossary-forklift-terminology-definitions (last viewed May 31, 2019).
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Furthermore, we note that the instant beams and bars are not joined
to form the mast weldments in their condition as imported. Moreover,
they do not contain the necessary angular cuts for clearance of the
rollers, drilled holes for brackets, anchors, and other attachments for
pulleys and chains. More importantly, they are not welded to the plates
and bars necessary to create the shape and dimensions of an inner,
intermediate or outer weldment of a mast. It is the weldments, which
are assembled to slide smoothly against the rollers and are sold as a
replaceable part.\9\ Similarly, the finger bars are not welded to the
frame for attachment between the carriage and mast. Rather, the instant
merchandise is simply the beams necessary to compose the weldments that
form the inner, intermediate, or outer uprights of the completed mast
and crossbars necessary to compose a portion of the carriage.\10\
Accordingly, while the subject merchandise may ultimately be destined
for incorporation into a forklift, it is not identifiable as such based
on its condition as imported. Indeed, to the extent a weldment
constitutes a part of a forklift, the profiles have not even assumed
the character of a weldment.
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\9\ See Lifting Masts Parts Manuals, http://www.lift-tek.com/support.html?sel=s2 (last viewed May 31, 2019).
\10\ As the merchandise is fully described by the terms of
heading 7216, the issue is whether it is excluded from
classification under note 1(f) to section XV as an article of
section XVI. Note 1(f), which excludes ``Articles of Section XVI''
(emphasis added), does not apply in this case because heading 8431,
HTSUS, merely covers ``parts'' of forklifts. In this respect, HTSUS
legal notes that operate to exclude parts of articles (and not just
the articles themselves) from a given chapter or section explicitly
indicate as such. For example, in note 3(k) to chapter 71, the
exclusion specifically identifies ``machinery, mechanical appliances
or electrical goods, or parts thereof, of Section XVI.'' (Emphasis
added.) The exclusion note at issue in this case, note 1(f) to
section XV, is tailored to exclude only articles of section XVI, and
not their parts, from section XV. See HQ 561353, dated September 19,
2002. Accordingly, even if the subject steel profile shapes were
prima facie classifiable under heading 8431, HTSUS, which is not the
case, the instant beams and bars are not excluded from
classification under heading 7216 by operation of note 1(f) to
section XV.
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Commenters in opposition to the Petition emphasize that a portion
of the merchandise is cut to a specified customer length and that it is
imported to customer specification. Initially, the statement itself
concedes that some portion of the imported merchandise is not cut to a
specified length for use in the mast assembly. The commenters also do
not state that the merchandise is cut to the exact length used in the
creation of the weldments for the mast. In fact, one of the submissions
shows a picture of ``pre-processing mast rail in the condition as it
arrives'' which is at
[[Page 31884]]
least three times longer than the rail shown in the adjacent picture of
``post-processing mast rail'' prior to incorporation into a mast
assembly.'' Additionally, one commenter notes the angled cut at the top
of the rail necessary for clearance of the rollers, though the inner
rail does not require this angled cut because no load roller is
attached. The commenter also cites to additional drilling and welding
for the bearing pad attachment and stub shafts for load rollers.
Commenters in opposition to the Petition also uniformly state that
the beams seldom need to be straightened after importation. Again, this
statement thus acknowledges the fact that some beams may need
straightening or are rejected. All commenters in opposition to the
Petition agree that the beams need to be drilled and welded to plates
and cross bars before acquiring the shape and dimensions necessary for
assembly into a mast as well as subject to surface cleaning operations,
such as pickling, oiling, and shot blasting, to prepare them for
painting. Finger bars must be cut to size and notched in specific
places along their length depending upon their placement as upper or
lower bars, as well as cleaned, painted, and welded to the actual
carriage assembly.
Commenters further state that the merchandise is manufactured to
tight tolerances. We obtained the invoices for a random entry of the
merchandise wherein an importer claimed classification in heading 8431,
HTSUS. Whereas some invoices indicated certain specifications, others
provided for a range of acceptable characteristics of the imported
merchandise. This is consistent with the manufacturing process
described in the original submission for NY N293371, which showed no
steps beyond those necessary to produce a rail or bar. Hence,
regardless of whether manufactured to a tight tolerance, without the
various cuts, notches, drilled holes and most importantly, welding,
that takes place post-importation, there is nothing that dedicates
these beams and bars for use solely in a forklift truck, or even for
the weldment of the lifting mast or carriage, in accordance with
Bauerhin.\11\
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\11\ Furthermore, there is nothing about the chemistry of the
steel used in the profile shapes that dedicates them to a specific
use. While the particular chemistry of steel may make it stronger,
harder, more malleable, more brittle or ascribe other physical
charecteristics to the product, customer specifications for the
chemistry of the steel do not dedicate the steel to a specific use
beyond a use that necessitates that particular physical
characteristic.
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Commenters opposing the Petition also claim that the merchandise is
not a part in and of itself, but a blank for a part of a forklift under
GRI 2(a). The EN excludes semi-manufactures not yet having the shape of
finished articles, such as bars and rods, from classification as
unfinished articles under GRI 2(a). See ENs to GRI 2(a), supra. As the
process and control documents submitted with the ruling request for NY
293371 state, the profiles and bars in their condition as imported are
just that: beams and bars. They certainly do not have the shape of the
finished forklift part, namely the mast or carriage. Indeed, the
process and control documents initially submitted for NY 293371
referred to the products as profiles and bars.
Additionally, we find that the example listed in the EN is
particularly instructive to understand the meaning of the term
``blank.'' The bottle preforms have the tubular shape of a bottle, with
one closed and one open end. The threads at the open end of the preform
that identify the tubular shape as one which will only be fashioned
into a bottle are already formed. By contrast, the process in creating
a lifting mast and carriage using the imported beams and bars requires
significant processing to dedicate their shape to use in a forklift
mast or bar carriage. The threads on the bottle preform are like the
notching, welding, drilling or cutting that must be performed on the
instant beams and bars. The tubular shape specifically with one open
and one closed end forms the shape that needs only be expanded to form
a bottle. Here, a significant amount of welding to other metal profiles
and plates must be performed in order to create the shape of the object
that is incorporated into the mast or carriage. The bars and beams do
not have the approximate size or shape of the forklift mast and
carriage, or even of the weldment components of the mast and carriage.
As such, the instant merchandise cannot be considered a blank of a part
for a lifting mast for a forklift.
Therefore, we concur with Petitioner that by application of GRIs 1
and 6, the nonalloy steel mast beams and finger bars in NY N293371 are
steel special profile shapes of heading 7216, HTSUS, classified
specifically under subheading 7216.50.00, which provides for angles,
shapes and sections of iron or nonalloy steel, other angles shapes and
sections not further worked than hot-rolled, hot-drawn or extruded.\12\
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\12\ One commenter cites to NY F83480, dated March 13, 2000,
which also involves lifting mast rails. There, the rails had been
cut to length, notched, milled, and drilled with holes for assembly
into single or multi-stage forklift masts. However, as the
merchandise in that ruling had not been welded into the shape of an
inner or outer mast for incorporation into the mast assembly, the
merchandise is substantially similar to the instant merchandise in
ways material to the determination here. Hence, NY F83480 is also
revoked by this decision.
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HOLDING:
Your Petition is granted. By application of GRIs 1 and 6, the
instant nonalloy steel special profiles are classified in heading 7216,
HTSUS, specifically in subheading 7216.50.00, HTSUS, which provides for
``Angles, shapes and sections of iron or nonalloy steel: Other angles,
shapes and sections, not further worked than hot-rolled, hot-drawn or
extruded.'' The 2019 column one, general rate of duty is free.\13\
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\13\ Rails and bars of alloy steel are classified under heading
7228, HTSUS, specifically under subheading 7228.70.3041 and
subheading 7228.70.3081, HTSUSA. Subheading 7228.70.3041, HTSUSA,
provides for: Other bars and rods of other alloy steel; angles,
shapes and sections, of other alloy steel; hollow drill bars and
rods, of alloy or nonalloy steel: Angles, shapes and sections: Hot-
rolled, not drilled, not punched and not otherwise advanced: Other:
With a maximum cross-sectional dimension of 76 mm or more: Other.''
Subheading 7228.70.3081, HTSUSA, provides for: Other bars and rods
of other alloy steel; angles, shapes and sections, of other alloy
steel; hollow drill bars and rods, of alloy or nonalloy steel:
Angles, shapes and sections: Hot-rolled, not drilled, not punched
and not otherwise advanced: Other: With a maximum cross-sectional
dimension of less than 76 mm: Other.'' The 2019 column one, general
rate of duty for both subheadings is free. See Subchapter III,
chapter 99, U.S. note 16, HTSUS, for additional duties that apply.
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Duty rates are provided for your convenience and are subject to
change. The text of the most recent HTSUS and the accompanying duty
rates are provided at https://hts.usitc.gov/current.
The steel special profiles from Germany \14\ are currently subject
to 25 percent ad valorem section 232 duties under subheading
9903.80.01, HTSUS, pursuant to subchapter III, chapter 99, U.S. note
16(b).
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\14\ See supra note 1, at 2.
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Section 232 remedies are based on the country of origin. At the
time of importation, the importer must report the chapter 99 subheading
applicable to the product classification in addition to the chapter 72
subheading listed above. The relevant Proclamations are subject to
periodic amendment of the exclusions, so the importer should exercise
reasonable care in monitoring the status of goods covered by the
Proclamations and the applicable chapter 99 subheadings.
Please be advised that the steel special profiles may be subject to
antidumping and countervailing duties (``ADD/CVD''). We note that the
U.S. Department of Commerce is not necessarily bound by a country of
origin or classification determination issued by CBP, with regard to
the scope of ADD/
[[Page 31885]]
CVD orders. Written decisions regarding the scope of ADD/CVD orders are
issued by the Import Administration in the Department of Commerce and
are separate from tariff classification and origin rulings issued by
CBP. The Import Administration can be contacted at http://www.trade.gov/ia/ (see Contact Information). A list of current ADD/CVD
cases at the U.S. International Trade Commission can be viewed on its
website at http://www.usitc.gov (click on ``Import Injury'' and then
``Antidumping and Countervailing Duty Investigations''). ADD/CVD
deposit and liquidation messages can be searched using ACE, the system
of record for ADD/CVD messages, or the ADD/CVD Search tool, at http://adcvd.cbp.dhs.gov/adcvdweb/.
EFFECT ON OTHER RULINGS:
NY N293371, dated February 8, 2018, is hereby revoked. CBP is also
revoking or modifying any other rulings involving substantially
identical merchandise, such as NY F83480 (mast rails), see supra note
11, at 10, to reflect the analysis contained in this decision. Pursuant
to 19 U.S.C. Sec. 1516(b) and 19 C.F.R. Sec. 175.22, this constitutes
CBP's decision and it will be published in the Federal Register and the
Customs Bulletin.
Sincerely,
Myles B. Harmon,
Director, Commercial and Trade Facilitation Division.
[FR Doc. 2019-14230 Filed 7-2-19; 8:45 am]
BILLING CODE 9111-14-P