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HQ 554906


June 12, 1989

CLA-2-CO:R:C 554906 RA

CATEGORY: CLASSIFICATION

TARIFF NOS: 9802.00.60 (806.30, TSUS)

District Director of Customs
880 Front Street Rm. 5-S-9
San Diego, California 92188

RE: Classification of header assembly adjusted abroad

Dear Sir:

This ruling is in response to your memorandum of November 6, 1987, requesting internal advice as to whether the adjustment of the header for a relay constitutes further processing (IA No. 78/87).

FACTS:

Header assemblies for relays made in the United States of base metal are exported to Mexico for certain adjustments and then returned for completion and stabilization bake. The foreign adjustments consist of setting the space between stationary contacts using a gauge to determine the predetermined amounts, setting the spring force of moving contacts using a gram gauge, and setting the return spring angle using an angled shim. When the products are returned to the United States, they are cleaned, baked, and inspected.

ISSUE:

Are the operations performed in Mexico and after return sufficient to qualify as "further processing" under item 806.30, Tariff Schedules of the United States (TSUS)(now subheading 9802.00.60, Harmonized Tariff Schedule of the United States

LAW AND ANALYSIS:

In order to obtain tariff treatment under item 806.30, TSUS, or subheading 9802.00.60, HTSUS, the base metal articles of domestic origin must have been subjected to a process of further manufacture in the foreign country and then the resultant product must have been returned to the United States for further processing. The term "further processing" refers to
operations which affect the metal itself such as grinding, cutting, drilling or forming. The operations applied to the metal articles must change their shape or form or impart new and different properties and characteristics to the metal that did not previously exist. CSD 84-49, 18 Cust. Bull. 957 (1983). Further processing implies a further process of manufacture of the article. Intelex Systems, Inc. v. United States, 59 CCPA 138, C.A.D. 1055 (1972).

In the case under consideration, the only processing of the header assemblies in Mexico consists of setting the space between the stationary contacts, changing the spring force of the moving contacts, and setting the return spring angle. None of these operations affects the metal itself or imparts different characteristics that the metal did not have before. Moreover, the adjustments of the contacts and the spring do not constitute a process of manufacture.

HOLDING:

The adjustments performed on the header assemblies in Mexico are not a sufficient treatment of the products to comply with the foreign further processing requirement under the statute. Therefore, the tariff treatment provided for in item 806.30, TSUS, or subheading 9802.00.60, HTSUS, must be denied for the imported articles.
Sincerely,

John Durant, Director

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