HQ 083426: Railway or Tramway Transition Rails; Country of Origin

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                        HQ 083426
                                      May 24, 1989

             CLA-2:CO:R:C:G   083426 JAS

             CATEGORY:   Classification

             TARIFF NO.: None

             Klaus Koelling
             Voest-Alpine International Corporation
             60 East 42nd. Street
             New York, New York 10165

             RE:  Railway or Tramway Transition Rails; Country of Origin

             Dear Mr. Koelling:

                  In your letter of January 17, 1989, you inquire as to the
             country of origin of transition rails fabricated in Austria
             from rail sections produced in different EC countries.  Our
             New York office has already ruled on the tariff classification
             issue.  At our request, you provided additional information on
             the processing in Austria which we received on April 13, 1989.

             FACTS:

                  Each railroad normally utilizes track with rails of one
             cross section.  Transition rails serve to connect or splice
             together rails of one cross section with those of another
             cross section.  They permit rail cars of one railroad to
             travel on the track of another railroad.

                  You state that American Railway Engineering Association
             (AREA) rail sections are utilized in the process.  These rail
             sections are sourced in different EC countries and stockpiled
             in Austria.  In this instance, 115 RE (denoting a rail weight
             of 115 lbs. per 3-foot length) and 132 RE rail sections are
             used.  In Austria, one end of the 115 RE section is forged and
             machined if necessary to the dimensional cross-section of the
             132 RE section.  The forged end of the 115 RE section is then
             flash butt welded to the 132 RE section and the weld area
             finished machined to remove burrs and excess metal.
             Ultrasonic and dye penetration tests detect defects in the
             welded area.

                  Transition rails produced from this process range in
             length from 10 to 20 feet.  You state that the forging,
             welding, machining and testing adds approximately 44.2 percent















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             to the cost of the EC rail sections, inclusive of the cost of
             a stress pulsation test performed on randomly selected
             samples.

             ISSUE:

                  Does the described processing substantially transform the
             EC rail sections so that Austria is the country of origin of
             the transition rails for purposes of the U.S.-Austria steel
             arrangement?

             LAW AND ANALYSIS:

                  In order for the EC rail sections to be considered as
             having been substantially transformed in Austria by the
             described processing, the record must establish that the
             processing resulted in a product other than or materially
             different from the rail sections of EC origin.  A new and
             different article must emerge from the processing, one having
             a new name, character or use.  Anheuser-Busch Brewing
             Association v. United States, 207 U.S. 556 (1908).

                  A mere change in a product's name, without more, is a
             relatively unimportant consideration in most instances.
             United States v. International Paint Co., 35 CCPA 87, C.A.D.
             376 (1948).  As to character and use, however, there must be
             evidence to show that the processing in Austria transforms the
             EC rail sections in such a way that they are no longer the
             essence of the final product as imported, and also dedicates
             that product to a specific use not associated with the rail
             sections.

                  The record here supports a finding that the processing in
             Austria results in a new and different article of commerce,
             one commercially recognizable as a transition rail.  The
             article, as imported, has lost the identifying characteristics
             of its constituent components, the rail sections, and has
             taken on a new use - to permit the rail cars of one railroad
             to pass onto the track of another railroad - distinct from
             that of the rail sections.  It is our opinion, therefore, that
             the processing in Austria results in a substantial transforma-
             tion of the EC rail sections.




















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             HOLDING:

                  Transition rails produced from rail sections in Austria
             by the described processing, are products of Austria for
             purposes of the steel arrangements.


                                        Sincerely,



                                        John Durant, Director
                                        Commercial Rulings Division