HQ 0224190 - Protest #2704-92-102387 concerning claim for same condition drawback under 19 U.S.C. 1313(j); AST Research, Inc.; automatic data processing machine with dual voltage power supply. - United States International Trade Commision Rulings

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HQ 224190

February 26, 1993

DRA-4 CO:R:C:E 224190 TLS

CATEGORY: ENTRY

Regional Commissioner
U.S. Customs Service
One World Trade Center Suite 705
Long Beach, California 90831-0700

RE: Protest #2704-92-102387 concerning claim for same condition drawback under 19 U.S.C. 1313(j); AST Research, Inc.; automatic data processing machine with dual voltage power supply.

Dear Sir:

The above-referenced protest has been forwarded to this office for further review. We have considered the points raised by the protestant and your office. Our decision follows.

FACTS:

The protestant sells desktop computers which can operate on either 115 or 230 volt power systems. A dual voltage power supply is utilized rather than a conventional power supply to achieve this versatility. The protestant states that an external switch on the back of the computer slides back and forth to change from one power rating to another.

Your office contends that these computers were not exported in the same condition as imported because they were altered to operate under a different power system before exportation. The protestant claims that the different power setting is a result of the testing the computer undergoes before exportation and that the power switch is operated in this instance.

ISSUE:

Whether the switching of the voltage power system before exportation is a "use" which disqualifies the subject merchandise from same condition drawback.

LAW AND ANALYSIS:

The provisions for same condition drawback may be found under 19 U.S.C. 1313(j)(1). The statute provides that, inter alia, drawback may be obtained on merchandise exported within three years of the date of importation in the same condition as was imported. The merchandise also must not be used within that three-year period. Id. In the present case, there is no dispute that the merchandise was exported within three years of the date of importation. The issue is whether the computers were "used" before exportation.

There are several rulings that have determined what constitutes "use" in these types of cases. In Customs Service Decisions (C.S.D.'s) 82-7, 89-13, 89-73, and 91-18, it was held that the alteration of merchandise to change its voltage capacity is considered more than an incidental change and results in the merchandise not being in the same condition as when imported. See also HQ 223342 (October 8, 1991). In those cases, the common activities that led to a finding of not in the same condition were alterations, exchange of component parts, or repairs made to the articles so that they performed different functions than before. C.S.D. 89-73.

In this case, the computers have built in switches on their back panels which are used to change the voltage system the computers can operate on. For instance, to switch from operating on a 115 voltage system to a 230 voltage system or vice versa, the user can move the switch from one side to another, using a pointed object of some kind. These computers are designed for this function; the units are marketed with this as a prominent feature. We find distinction from C.S.D. 89-73, where changes were made to allow the merchandise to perform a different task than before, rather than interchangeable tasks in the normal usage of the product, as is done here. Therefore, given that the nature of the subject merchandise is to switch back and forth between the different power systems, we find that the testing of the computers utilizing a 230 voltage system is an incidental operation.

HOLDING:

The testing of the computers in this case while utilizing a 230 voltage system is an incidental operation for drawback purposes. The merchandise is eligible for same condition drawback under 19 U.S.C. 1313(j)(1). This ruling is limited to the facts of this case. Protests ##2704-92-102388 through 2704- 92-102399, 2704-92-102477, and 2704-92-102800 should be handled accordingly, as they involve the same merchandise, importer, and proposed transactions.

Sincerely,

John Durant, Director

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