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HQ 951866


August 21, 1992

CLA-2 CO:R:C:M 951866 NLP

CATEGORY: CLASSIFICATION

TARIFF NO.: 7103.99.10

District Director
United States Customs Service
40 South Gay Street
Baltimore, MD 21202

RE: Protest No. 1303-92-100061; tumbled semi-precious gemstones; semi-precious gemstones that are otherwise worked than simply sawn or roughly shaped; subheading 7103.10.40; Explanatory Note 71.03; Gem Cutting: A Lapidary's Manual

Dear Sir:

The following is our decision regarding the Protest and Request for Further Review No. 1303-92-100061, dated March 12, 1992. At issue is the classification of tumbled semi-precious gemstones under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The articles at issue are the following semi-precious gemstones: banded amethyst, rose quartz, leopard skin, jasper and rock crystal B. The rough gemstones are shoveled into 2-1/5 ton tumblers with abrasives and water. The tumblers are turned over and over and the stones slide and rub against each other for many weeks until they are perfectly smooth. Tumbling gives the stones a slick and shiny surface. Upon importation, the gemstones are not set. Once imported, the stones will be used to manufacture various articles of jewelry such as, bracelets, necklaces and earrings.

Upon liquidation, the semi-precious gemstones were classified in subheading 7103.10.40, HTSUS, which provides for "[p]recious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi- precious stones, temporarily strung for convenience of transport: [u]nworked or simply sawn or roughly shaped: [o]ther." The rate of duty for articles that fall within this subheading is 21% ad valorem.

The protestant contends that the semi-precious gemstones are classified in subheading 7103.99.10, HTSUS, which provides for "[p]recious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi- precious stones, temporarily strung for convenience of transport: [o]therwise worked: [o]ther: [c]ut but not set, and suitable for use in the manufacture of jewelry." The rate of duty for articles that fall within this subheading is 2.1% ad valorem.

ISSUE:

Are the tumbled semi-precious gemstones classified as "roughly shaped" in subheading 7103.10.40, HTSUS, or as stones that are "otherwise worked" in subheading 7103.99.10, HTSUS?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Heading 7103, HTSUS, provides for "[p]recious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi-precious stones, temporarily strung for convenience of transport." Explanatory Note (EN) 71.03 of the Harmonized Commodity Description and Coding System, page 953, states that "[t]he provisions of the second paragraph of the Explanatory Note to heading 71.02 apply, mutatis mutandis, to this heading." EN 71.02 states on page 952 that heading 7102, HTSUS, "covers unworked stones, and stones worked, e.g., by cleaving, sawing, bruting, faceting, grinding, polishing, drilling, engraving (including cameos, and intaglios), preparing as doublets, provided they are neither set nor mounted."

Unworked semi-precious stones of subheading 7103.10.20, HTSUS, are stones that are unworked and are in the same condition as when they were mined from the earth. The "other" semi- precious stones of subheading 7103.10.40, HTSUS, are stones that have been "simply sawn or roughly shaped". Articles that have been further worked than simply sawn or roughly shaped are classified in subheading 7103.99, HTSUS.

The protestant argues that tumbled semi-precious gemstones are considered cut stones and are more than "roughly shaped". In addition, the stones are not set and in their condition as imported they are suitable for the manufacture of jewelry items
such as bracelets, earrings and necklaces. Therefore, these stones are considered "otherwise worked" and they should be classified in subheading 7103.99.10, HTSUS.

Tumbling is a method of mass producing gems by placing rough pieces of gem material in a barrel, adding abrasives and water, and turning the barrel over and over until the stones are perfectly smooth. As a result of this process, the gemstones are cut into different shapes and are suitable for use in the manufacture of jewelry. See, Gem Cutting: A Lapidary's Manual, by John Sinkarkas, 2nd Ed. 1962, Van Nostrand Reinhold Company, p. 187. It is our position that gemstones that are shaped by tumbling are more than "roughly shaped" and would be considered "otherwise worked" for HTSUS purposes. As the subject semi- precious gemstones are tumbled, not set and suitable for use in the manufacture of jewelry, they would be classified in subheading 7103.99.10, HTSUS.

HOLDING:

The protest should be allowed in full. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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