CBP Finds Pointed Rods Not 'Blanks' Classifiable in Final Form as Drill Bits
Just because a pointy rod appears to be a drill bit doesn’t mean it should be classified as one, said CBP in a ruling issued in May that overturned the port’s classification of “high speed steel drill blanks” imported by MC Tubular Products. CBP Minneapolis had originally classified the pointed steel rods intended for making drill bits as finished drill bits under Harmonized Tariff Schedule heading 8207. But noting that the point of the rod is only a chamfer that is completely ground off before the drill bit’s actual point is applied, CBP ruled that the steel rods are not “blanks” classifiable in their intended final form as drill bits, but are instead bars and rods of high speed steel classifiable in heading 7228.
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The steel rods at issue are imported in various diameters and lengths, and after importation they are further processed into drill bits. As imported, they have a bevel on one end and a point on the other. MC Tubular classified them as steel rods under subheading 7228.10.00 (free). After CBP Minneapolis liquidated the rods as drill bits under subheading 8207.50.20 (5%), MC tubular protested and requested further review, alleging the classification to be inconsistent with previous CBP rulings.
Under General Rule of Interpretation 2, “any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that … the unfinished article has the essential character” of the finished article. An Explanatory Note to GRI 2 says the rule applies to “blanks,” which it defines as “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.”
The pointed steel rods seemed to have the “approximate shape or outline of the finished article or part,” but CBP ruled that the appearance was deceiving. The point at the end of the rod was not a drill bit point, but instead a “chamfer” used to eliminate a sharp corner. The point is to be removed when the rod is worked into a drill bit, and a new point is added after importation, it said. “The instant products do not qualify as ‘blanks.’ While the large chamfer resembles the final point to be taken by the final product, this is not actually the case,” said CBP. “Thus, the instant products do not have the approximate shape or outline of the finished part,” it said. As steel rods of the appropriate composition, the merchandise is classifiable in heading 7228, said CBP.
(HQ H217699, 05/09/14)