HQ 084656: Coastwise Transportation of Merchandise Manufactured or Processed into a New and Different Product; Section 4.80b(a), Customs Regulations

us-cbp-cross-rulings-hq-084656HQ 084656: Coastwise Transportation of Merchandise Manufactured or Processed into a New and Different Product; Section 4.80b(a), Customs RegulationsGuidance

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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 084656

                                    August 18, 1989

            CLA-2 CO:R:C:G  084656

            CATEGORY:  Classification

            Chief, Carrier Rulings Branch

            RE:  Coastwise Transportation of Merchandise Manufactured
                      or Processed into a New and Different Product;
                      Section 4.80b(a), Customs Regulations

            Dear Sir:

                 By memorandum, dated May 24, 1989 (110217 GV), you ask
            whether drawn galvanized wire processed from carbon steel wire
            rod is a new and different product for purposes of section
            4.80b(a), Customs Regulations.  Our response follows.

                 AISI grade 1008 carbon steel wire rod in round cross
            sectional dimension ranges in diameter from 0.216 to 0.748
            inches.  The wire rod is wound onto coils which are dipped into
            hydrochloric acid to remove mill scale, then coated with lime
            or borax to inhibit rust formation.  The wire rod is then
            uncoiled and cold drawn as many as eleven times through a
            series of conical shaped dies into what is described as 16
            gauge wire.  Thereafter, the drawn wire is stress relieved
            (annealed) in a bath of molten lead maintained at 1300 degrees
            F, cooled, cleaned again in hydrochloric acid, and flux
            treated.  The wire is then hot dipped galvanized by passing it
            through a molten zinc bath heated to 860 degrees F.

                 The drawing significantly increases both yield strength
            and tensile strength, and reflects a reduction in cross-
            sectional area of up to 92 percent.  The annealing reduces
            yield strength up to 62 percent and tensile strength up to 50
            percent while increasing ductility by up to 300 percent.  The
            cleaning, drawing, annealing, and galvanizing operations are
            said to add approximately 124 percent to the value of the wire
            rod.






















                                       - 2 -


                 In order for the wire rod to be considered a new and
            different product for purposes of section 4.80b(a), Customs
            Regulations, the record must establish that the described
            processing substantially transforms the galvanized wire in such
            a way that it results in a product other than or materially
            different from the wire rod.  A new and different product 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), and related cases.  In this case, the drawing
            phase of the operation results in a significant reduction in
            the product's cross sectional area.  Moreover, the drawn
            process wire here cannot be galvanized without first being
            annealed to remove the stresses of cold working.  This
            increases ductility which is essential, in this case, to permit
            galvanizing.  The substantiality of the entire processing
            operation is reflected in the 124 percent value added.
            Finally, the processing dedicates the galvanized wire to uses
            (i.e., nails, coat hangers, barbed wire, condenser wire), for
            which the wire rod is unsuited.

                 The facts here support a finding that drawn, galvanized
            wire, processed as indicated from carbon steel wire rod, is
            considered substantially transformed, and is a new and
            different product for purposes of section 4.80b(a), Customs
            Regulations.

                                      Sincerely,


                                        John Elkins

























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