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HQ 954643

OCTOBER 21 1993

CLA-2:CO:R:C:M 954643 JAS


TARIFF NO.: 7208.90.00

District Director of Customs
Patrick V. McNamara Bldg.
477 Michigan Ave.
Detroit, MI 48226

RE: PRD 3801-92-103604; Circular Steel Blanks, Unfinished Torque Converter Covers, Subheading 8708.99.50; Unfinished Automobile Parts, GRI 2(a); Steel Circles, Articles of Iron or Steel, Heading 7326, Specificity, GRI 3(a); Fabricated Components, Automotive Products Trade Act of 1965; Flat- Rolled Products of Iron or Nonalloy Steel; HQ 087047, HQ 951994

Dear Sir:

This is our decision on Application for Further Review of Protest 3801-92-103604, filed by the broker representing Kasle Steel, against your action in classifying certain circular steel discs or blanks from Canada. The entries were liquidated on September 4, 18 and 25, and on October 2, 9, 16 and 23, 1992. This protest was timely filed on November 27, 1992.


Protestant refers to the merchandise as configured steel blanks that will be fabricated into front covers for torque converters, i.e., automotive transmissions. They are circular shapes with diameters of 14.185 inches, plus or minus 0.010 inch, cut from 6-gauge, 0.189 to 0.20 inch thick hot rolled steel sheet. Customer specifications require four (4) equally spaced square extrusions on the outer edge of each circle. Each extrusion, called an oil breaker, measures 0.12 inch on a side and flares from the surface of the circle to a height of 0.02 inch at the outer edge. These keep the circles from sticking together and prevent double-blanking in the press machine which could damage the circles or jam the machine. A coil identification number is stenciled on each circle. After delivery to the customer, the circles move from a conveyor to a machine press that subjects them to what protestant describes as a "variety of pressing and stamping operations" that convert them - 2 -
into torque converter covers. The post-importation processing is not further described. The finished articles are intended for installation in new automobiles.

The steel circles were entered under subheading 8708.99.50, Harmonized Tariff Schedule of the United States (HTSUS), as other parts and accessories of the motor vehicles of headings 8701 to 8705. Protestant maintains that the steel circles are entitled to free entry under this provision because they are Canadian articles that are fabricated components intended for use as original motor-vehicle equipment under the Automotive Products Trade Act of 1965, as amended (APTA). He argues that the precise dimensional tolerances advance these circles beyond the stage of mere materials; the oil breaker extrusions clearly establish the identity of the stamped circles as unfinished components and make them commercially unusable for anything other than torque converter covers. Based on decisions on similar merchandise under the HTSUS as well as the Tariff Schedules of the United States (TSUS), you liquidated the entries under the provision for flat-rolled products of iron or nonalloy steel, in subheading 7208.90.00, HTSUS.

The provisions under consideration are as follows:

7208.90.00 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot- rolled, not clad, plated or coated:
Other...5 percent

7326.19.00 Other articles of iron or steel: Forged or stamped, but not further worked:
Other...5.7 percent/free under APTA

8708.99.50 Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other...3.1 percent/free under APTA


Whether the steel circles are unfinished torque converter covers; whether the provision in heading 7208 is more specific than the provision in heading 7326. - 3 -


Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined 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. GRI 2(a) states in part that any reference in a heading to an article shall be taken to refer 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. GRI 3(a) states in part that where goods are, prima facie, classifiable under two or more headings the heading which provides the most specific description shall be preferred to headings providing a more general description.

Relevant to the issue of essential character, we believe, is the degree to which the steel circles have been advanced toward their intended use at the time of their importation; that is, whether they are physically recognizable as the articles they will ultimately become. This is always a question of fact and depends on the merchandise in issue and the processing steps involved. In previously-decided protests, the post-importation processing was fully described. However, in this case protestant identifies only "a number of pressing and stamping operations" but does not describe them. Therefore, we are unable to determine whether the stamped steel circles have any particular characteristic or characteristics that would impart the essential character of a torque converter cover. The fact that these circles may, in all instances, be used to make torque converter covers, is not legally dispositive as to their essential character.

As to the second issue, the goods are prima facie classifiable both in heading 7208 and in heading 7326. In such cases, GRI 3(a) requires that the steel circles be classifiable in the provision that most narrowly and specifically describes it, or the one with requirements that are the most difficult to satisfy. Goods classifiable in heading 7208 are necessarily limited to those meeting the definition of the term flat-rolled products, in chapter 72, note 1(k), HTSUS. Therefore, all flat- rolled products that are forged or stamped but not further worked, and which have not assumed the character of goods of another heading qualify as "articles" of heading 7326. However, only those forged or stamped articles meeting the terms of note 1(k) can be classifiable in heading 7208. In addition, relevant HTS Explanatory Notes indicate, at p. 1037, that heading 7326 covers all iron or steel articles...other than articles...more - 4 -
specifically covered elsewhere in the Nomenclature (Emphasis original). For these reasons, heading 7208 is more specific than heading 7326.


Under the authority of GRI 1, the steel circles in issue are provided for in heading 7208. They are classifiable in subheading 7208.90.00, HTSUS, as liquidated. The protest should be denied.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you should mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, Lexis, the Freedom of Information Act and other public access channels.


John Durant, Director
Commercial Rulings Division

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