Copper alloy classification for phosphor bronze ingots supports Heading 74.01 treatment and deemed Modvat credit eligibility.

Phosphor bronze ingots containing about 90% copper were treated as a copper alloy under Section XV Notes 3 and 4, because the base metal predominated by weight. On that basis, the goods fell within Heading 74.01 as unwrought copper, including ingots, rather than Heading 74.13 for other copper articles such as nails, tacks, rivets, washers and similar items. As inputs classifiable under Heading 74.01 qualified for deemed Modvat credit, denial of the credit was not sustainable and the benefit remained available.

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Issues: (i) Whether phosphor bronze ingots, consisting predominantly of copper, were classifiable as copper under Heading 74.01 rather than as other articles of copper under Heading 74.13; and (ii) whether such classification entitled the assessee to deemed Modvat credit.

Analysis: Note 3 of Section XV provided that an alloy of base metal is classified as an alloy of the metal which predominates by weight over each of the other metals, and Note 4 extended references to a base metal to alloys so classifiable. Since the goods contained about 90% copper, the material was to be treated as copper alloy for tariff purposes. Heading 74.01 specifically covered unwrought copper, including ingots, whereas Heading 74.13 covered other copper articles of a different kind, such as nails, tacks, rivets, washers and similar items. Phosphor bronze ingots did not fall within that description. As inputs classifiable under Heading 74.01 were eligible for deemed Modvat credit, denial of the benefit was not sustainable.

Conclusion: The phosphor bronze ingots were classifiable under Heading 74.01 and the assessee was entitled to deemed Modvat credit.

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