United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1991 HQ Rulings > HQ 0555716 - HQ 0555869 > HQ 0555731

Previous Ruling Next Ruling


HQ 555731


November 14, 1990

CLA-2 CO:R:C:V 555731 GRV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.60

Mr. Marshall R. Mazer
Manager, Government Programs
Bethlehem Steel Corporation
Bethlehem, PA 18016

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.60 to steel test plates. Rolling steel slabs into plates and subjecting them to an "accelerated cooled and direct quench" and other processing (shot blasting, heat treatment) abroad and variously cutting the returned plates into test specimens when returned to the U.S. constitute "further processing."555701

Dear Mr. Mazer:

This is in response to your letter of August 6, 1990, to the Regional Commissioner of Customs, New York Region, requesting a ruling on the applicability of subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS), to stainless steel plates to be imported from Japan after processing. Your letter was forwarded to this office for a direct response.

FACTS:

U.S.-manufactured steel slabs will be exported to Japan for processing into steel test plates. In Japan, the steel slabs will be rolled into plates and subjected to a process referred to as an accelerated cooled and direct quench (AC/DQ). This AC/DQ process will impart improved mechanical properties to the plates. The plates will also be subjected to other processing in Japan, including shot blasting and heat treatment. The steel slabs will then be returned to the U.S. where they will be tested and a variety of test specimens and samples (denominated patterns) will be cut from the plates as required for evaluation. Some plates will be welded together for various mechanical and ballistic tests.

ISSUE:

Whether the steel plates will be eligible for the partial duty exemption available under HTSUS subheading 9802.00.60 when returned to the U.S.
LAW AND ANALYSIS:

HTSUS subheading 9802.00.60 provides a partial duty exemption for:

[a]ny article of metal (as defined in U.S. note 3(d) of this subchapter) manufactured in the United States or subjected to a process of manufacture in the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing.

This tariff provision imposes a dual "further processing" requirement on eligible, U.S. articles of metal--one foreign, and when returned, one domestic. Metal articles satisfying these statutory requirements may be classified under this tariff provision with duty only on the value of such processing performed outside the U.S., provided the documentary requirements of section 10.9, Customs Regulations (19 CFR 10.9), are met.

In C.S.D. 84-49, 18 Cust.Bull. 957 (1983) we stated that:

[f]or purposes of item 806.30, TSUS [the predecessor tariff provision to HTSUS subheading 9802.00.60], the term 'further processing' has reference to processing that changes the shape of the metal or imparts new and different characteris- tics which become an integral part of the metal itself and which did not exist in the metal before processing; thus, further processing includes machining, grinding, drilling, threading, punching, forming, plating, and the like, but does not include painting or the mere assembly of finished parts by bolting, welding, etc.

In a similar steel test plate case, we ruled that steel slab is an eligible article of metal for purposes of HTSUS subheading 9802.00.60. We further held that rolling the slab into plate abroad, and cutting the returned plate into various, use-specific sizes and machining and/or welding sectioned parts (some plates also were heat treated) to form test materials for various mechanical and ballistic tests were sufficient to meet the dual further processing requirement of this tariff provision. Headquarter Ruling Letter (HRL) 555701 dated August 29, 1990. As the transaction you describe is materially the same as that previously ruled on, we believe that HRL 555701 is controlling here.
HOLDING:

On the basis of the information provided, the steel plates to be imported are eligible for the partial duty exemption under HTSUS subheading 9802.00.60, provided the documentary requirements of 19 CFR 10.9 have been met, as the processes performed abroad and in the U.S. are sufficient to satisfy the "further processing" requirements under this tariff provision.

Sincerely,


Previous Ruling Next Ruling

See also: