The tariff classification of roll shells from Canada

N032839 August 7, 2008 CLA-2-84:OT:RR:E:NC:1:104 CATEGORY: Classification TARIFF NO.: 7326.90.8588; 8479.90.9496 Mr. Jeffrey R. Bliss ANBO Machining 3 Allison Line P.O. Box 249 Blenheim, Ontario N0P 1A0 Canada RE: The tariff classification of roll shells from Canada Dear Mr. Bliss: In your letter dated July 8, 2008 you requested a tariff classification ruling. Roll shell material, which you refer to as “blanks”, is shipped from China to Canada. From an examination of your submitted photos, the Chinese material is in tubular form, open on both ends. In Canada, the material will either be finished into roll shells or left in an unworked state for finishing in the United States. The articles (both unworked and finished) will subsequently be exported to the United States. In order to produce a finished roll shell, various precision machining and heat-treatment operations are performed. Two types of finished shells are produced, i.e., corrugated and dimpled. The corrugated surface is the result of machining grooves in the outside diameter of the material. The dimpled surface is achieved by drilling small holes in the outside diameter. The grooving and drilling operations create surfaces which give the shells traction when running inside the pellet die. After heat-treating the shell for wear resistance and longevity, the inside diameter is ground to a specific size for bearing fit. Each shell is stamped with an identification number and a batch number. The finished roll shells are used in pellet mills which produce a wide variety of products such as animal feed pellets, plastic pellets, paper pellets and wood pellets (for bio mass fuel). The Explanatory Notes to GRI 2(a)/Incomplete or unfinished articles (“ENs”) provide guidance on the application of the rule to “blanks”. Said ENs state, in part, (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 performs 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-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”. After examining the submitted photos showing the material in its unworked and finished states, it is this office’s opinion that the unworked material from China does not qualify as “blanks” for tariff purposes. In their imported condition, the semi-manufactures are not recognizable as the finished roll shells they will become. The material does not take on the essential shape and character of a roll shell until machined. Thus, they would not be considered unfinished roll shells. The applicable subheading for the roll shell blanks will be 7326.90.8588, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other articles of iron or steel, other, other, other, other, other.  The rate of duty will be free. The applicable subheading for the finished roll shells will be 8479.90.9496, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Parts: Other…Other. The rate of duty will be free. In your letter you also requested a country of origin ruling on the goods both in the unworked state and in the finished state. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines “country of origin” as: The country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. Accordingly, the country of origin of an article is the country in which it was wholly grown, or, if processed in several countries, the country in which the last substantial transformation occurred. The well-established test for determining whether a substantial transformation has occurred is derived from language found in Anheuser-Busch Association v. United States, 207 U.S. 556, 562 (1908), which defines the term “manufacture” as follows: Manufacture implies a change, but every change is not manufacture and yet every change in an article is the result of treatment, labor and manipulation. But something more is necessary, as set forth and illustrated in Hartranft v. Wiegmann, 121 U.S. 609. There must be transformation; a new and different article must emerge, having a distinctive name, character or use. Thus, a substantial transformation occurs “when an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing.” [Texas Instruments, Inc. v. United States, 69 CCPA 152, 681 F. 2d 778 (1982)(cited with approval in Torrington Co. v. United States, 764, F.2d 1463, 1568 (1985)] In determining whether a substantial transformation occurs in the manufacture of roll shells from the Chinese material, this office examined the details concerning the manufacturing processes performed in Canada. From your description, the manufacturing processes performed are complex. It is this office’s opinion that the Chinese material undergoes a substantial transformation based upon the extensive manufacturing operations performed on it which results in a new and different article of commerce. In view of the above, the country of origin of the material which you refer to as “blanks” remains China. The country of origin of the finished roll shells is Canada. 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 on World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patricia O’Donnell at (646) 733-3011. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division