HQ 958806

JULY 26, 1996

CLA-2 RR:TC:MM 958806 JAS

CATEGORY: Classification

TARIFF NO.: 9817.00.90

Port Director of Customs

200 Granby Street

Norfolk, VA 23510

RE: PRD 1401-95-100253; Titanium Ingots, Unwrought Titanium;

Heading 8108, Section XV, Additional U.S. Note 1; Remelt

Scrap Ingots, Defective or Damaged Ingots, Subheading

9817.00.90; Chapter 98, U.S. Note 1

Dear Port Director:

This is our decision on Protest 1401-95-100253, filed

against your classification of titanium ingots made in Russia.

The entries were liquidated on August 25 and September 15, 1995,

and this protest timely filed on October 26, 1995. Counsel for

the protestant made supplemental submissions dated June 17 and

July 11, 1996.

FACTS:

The merchandise is referred to variously as bulk weldable

titanium, unwrought titanium, titanium ingots or scrap titanium

ingots. A purchase order describes the ingots as 11 inches in

diameter, either 30 or 86 inches long, and weighing between 300-400 lbs.
Counsel describes the merchandise as remelt scrap

ingots or as bulk weldable scrap, a term by which they are said

to be known in the industry. Counsel maintains the merchandise

is defective titanium ingots produced from reverted scrap. It

includes tungsten carbide fragments and other refractory

particles called \"inclusions\" which can only be eliminated by

further remelting and refining. After importation, these ingots

are welded to other titanium pieces of the same grade and melted

in a vacuum arc furnace. The product is said to be remelted two

\(2\) times for standard quality applications and three (3) times

for critical quality applications such as the aircraft industry.

Remelt certificates for the merchandise under protest were

provided for our examination.

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The titanium was entered under a duty-free provision in

heading 8108, Harmonized Tariff Schedule of the United States

(HTSUS), for titanium waste and scrap. Your office determined

that ingots are other forms of unwrought titanium and liquidated

the entries under the appropriate provision in heading 8108.

Counsel now claims the merchandise is eligible for duty-free

entry under subheading 9817.00.90, HTSUS, as unwrought metal in

ingot form which is defective or damaged.

The provisions under consideration are as follows:

8108 Titanium and articles thereof, including waste and scrap:

8108.10 Unwrought titanium; waste and scrap; powders:

8108.10.10 Waste and scrap\...Free

8108.10.50 Other\...15 percent ad valorem

\* \* \* \*

Unwrought metal including remelt scrap

ingot\...in the form of ingots\...which are

defective or damaged, or have been produced from melted down metal waste
and scrap for

convenience in handling and transportation without sweetening, alloying,
fluxing or

deliberate purifying, and which cannot be

commercially used without remanufacture\...;

Articles of metal (\...not including unwrought

metal provided for in chapters 72-81) to be

used in remanufacture by melting\...:

9817.00.90 Other\...Free

ISSUE:

Whether the titanium ingots are unwrought metal in ingot

form which are damaged or defective for purposes of subheading

9817.00.90.

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LAW AND ANALYSIS:

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.

Initially, for purposes of chapters 72 through 83, Section

XV, Additional U.S. Note 1, HTSUS, defines the term \"unwrought\"

as refer\[ring\] to metal, whether or not refined, in the form of

ingots, among other similar manufactured primary forms, but does

not cover rolled, forged, drawn or extruded products, tubular

products or cast or sintered forms which have been machined or

processed otherwise than by simple trimming, scalping or

descaling. In a letter dated July 11, 1996, counsel confirmed

that the merchandise under protest is, in fact, unwrought for

tariff purposes.

Pursuant to Chapter 98, U.S. Note 1, HTSUS, even if the

merchandise is unwrought titanium of heading 8108 or is

classifiable elsewhere in HTS chapters 1 through 97, if it is an

article described in any provision in chapter 98 it is

classifiable in said provision if the conditions and requirements

thereof and of any applicable regulations are met.

Subheading 9817.00.90 describes three types of goods:

\(1\) Unwrought metal including remelt scrap ingot (except copper, lead,
zinc and tungsten) in the form of pigs, ingots, or billets

\(a\) which are defective or damaged, or have been

produced from melted down metal waste and scrap

for convenience in handling and transportation

without sweetening, alloying, fluxing or

deliberate purifying, and

\(b\) which cannot be commercially used without

remanufacture;

\(2\) relaying or rerolling rails; and,

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\(3\) articles of metal (except articles of lead, or zinc or

of tungsten, and not including metal-bearing materials

provided for in section VI, chapter 26 or subheading

8548.10 and not including unwrought metal provided for

in chapters 72-81) to be used in remanufacture by

melting or to be processed by shredding, shearing,

compacting, or similar processing which renders the

fit only for the recovery of the metal content.

The ingots in issue here are unwrought for tariff purposes. They

are not type (2) relaying or rerolling rails, nor are they type

\(3\) articles of metal, because unwrought metal of chapters 72-81

is excluded. The issue, then, is whether the ingots are type (1)

forms of unwrought metal. The terms defective and damaged are

not defined in the heading 9817.00.70 text, nor is there any

available legislative history on the scope of the terms. In

common meaning, however, the terms are quite broad and embrace

any kind of imperfection, or the lack of an element that impairs

usefulness or is necessary to a thing\'s completeness, whether in

terms of physical appearance, structure or quality.

Conventional titanium ingots range from 28-36 inches in

diameter and weigh from 7,000-15,000 lbs. The ingots under

protest are significantly smaller in physical dimensions and

lighter in weight. In addition, despite the fact these ingots

were ordered to specific chemistry, they contained significant

amounts of tungsten carbides and other refractory particles

called inclusions. These are objectionable and must be removed

to render the product commercially useful. Only after these

inclusions are removed by remelting is the product recast as

chemically certified prime ingot and made suitable for eventual

processing into bar and ultimately into forged products requiring

the highest quality standards, such as aircraft parts. The

evidence here suggests that the titanium ingots here are damaged

or defective for tariff purposes, and are of the type that cannot

be commercially used without remanufacture.

HOLDING:

Under the authority of GRI 1, the titanium ingots in issue

here are provided for in heading 9817. They are classifiable in

subheading 9817.00.90, HTSUS.

The protest should be ALLOWED. 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

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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, the

Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

Tariff Classification

Appeals Division