Calibration Considered 'Further Work,' Says CBP in Classification Ruling

Having two separate processes to soften and calibrate iron shells used in mining means the shells are ineligible for classification as "cast articles of iron," CBP said in a Dec. 9 ruling (here). The application for further review of a protest came from VS Guss, which disagreed with CBP's classification decisions on entries of iron shells and spherical washer castings in 2011. The importer argued that the processing of the goods after casting was "incidental" and thus classifiable under heading 7325, which excludes additionally processed goods.

The entries in question involved shells and washers that CBP reclassified under heading 7326 as "other articles of iron or steel.". The shells and washers, which "form part of an anchor assembly in the roof of mines," are cast in Germany, said CBP. After casting and cleaning, "the shells and washers undergo an annealing process that softens the cast iron in order to make them malleable enough for their intended use." Before both parts are imported into the U.S., the shells go through an additional calibration process.

Heading 7325, VS Guss' preferred classification for the shells, precludes cast articles of iron steel that went through additional processing. Therefore, the classification depends "on whether annealing and calibrating the shells is merely incidental," said CBP. While the importer cited a previous CBP ruling that found annealing doesn't constitute a substantial transformation, that's not the issue here, the agency said. The analysis for a "substantial transformation" differs from that of whether "further work" occurred, CBP said.

The softening and calibration are "required to make the shells usable for their intended purpose in an anchor assembly in a mine roof, and can be characterized as 'further work," CBP raid. "Consequently, we find that the combination of the annealing process and calibration amount to more than merely incidental processes and amount to “further work” beyond casting. The port was therefore right to classify the shells under heading 7326 with a 2.6 percent duty rate. Still, the agency partially agreed with importer's protest on classification of the washers. "The spherical washer castings at issue here fit the physical description of what is commonly understood to be a washer, and their use is consistent with that of a washer," which means the washers castings are best classifiable under the duty-free heading in 7318.