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HQ 557096


June 18, 1993

CLA-2 CO:R:C:S 557096 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9801.00.60

District Director
U.S. Customs Service
International & Terrace Sts.
Nogales, Arizona 85621

RE: Application for Further Review of Protest No. 2605-92- 100001; Denial of duty exemption under subheading 9801.00.60, HTSUS, to a camera system exported to Germany and displayed at a photo show; solely for exhibition purposes; public

Dear Sir:

This is in reference to a protest and application for further review filed by Marron Carrel, Inc. (dba Maron Inc.), which we received on January 19, 1993, contesting the denial of the duty exemption under subheading 9801.00.60, Harmonized Tariff Schedule of the United States (HTSUS), to various items which are part of an electronic imaging camera system.

FACTS:

The items at issue are part of an electronic imaging camera system which reproduces high-quality photographs from photographs. The items arrived in Arizona on November 5, 1990, and entry was made the next day under subheading 9801.00.10, HTSUS, as American Goods Returned. After the discovery was made that several components of the system were of foreign origin, and because these items were packed separately and were not registered upon exportation, a meeting was held with an employee of William F. Joffroy, Inc., Customs Brokers for the protestant, who suggested that the merchandise appeared to be eligible for duty-free entry under 9801.00.60, HTSUS. Therefore, the protestant states that the decision was made to make formal entry on November 27, 1990, with payment of the estimated duties on the components of foreign origin, and to present a bond pursuant to 19 CFR 10.66(b), pending the receipt of evidence to prove that the items were exported from the U.S. and the fair was open to the public. The entry was liquidated on August 2, 1991, and this protest was filed on October 22, 1991, seeking a full refund of the estimated duties deposited in the amount of $3799.90.

The protestant alleges that the items were exported for temporary exhibition at a public trade show and should be classified under 9801.00.60, HTSUS. Furthermore, although the items were not registered for temporary exhibition at a public trade show, the protestant claims that the intent of section 10.66(b), Customs Regulations {19 CFR 10.66(b)}, is to provide relief to an importer who causes foreign-made exhibition material to be exported without benefit of registration.

The record contains two Burlington air waybills, #94509925 dated September 18, 1990, and #94509940 dated September 20, 1990, which indicate that various items were shipped to De Vere Ltd., in England (the protestant's European distributor). The air waybill dated September 18, lists three crates with a shipping weight of 339 kilos, and references Maron Inc. invoice #25449. The air waybill dated September 20, lists two crates with a shipping weight of 210 kilos, references Maron Inc. invoice #25477, and indicates "Trade show materiel: all equipment will be returned to country of origin." Maron Inc. invoice #25449 lists various camera equipment under items M170, M600, M400, MC1600, and M650 (which is a JVC conversion system that includes a stand #49958, JVC TK7100, 28mm lens, monitor, and copy lites, and which is the subject of this protest). Maron Inc. invoice #25477 lists item 400PR, a Nikon camera system that includes a stand, camera, 80mm, 5 x 7 CL, 5 x 7 CRC, and loop, and which is also the subject of this protest.

The record also contains a De Vere invoice dated October 16, 1990, which states that "boxes camera equipment as per Maron invoice 25477" were shipped to Maron Inc. in Arizona. After a telephone conversation with the Vice President of Marketing and Technical Support of Maron Inc., requesting information to confirm that the entire shipment sent to De Vere was returned to the U.S., we received a facsimile of a copy of the De Vere invoice supplied by your office, except that the invoice also indicates that "boxes camera equipment as per Maron invoice 25449" were shipped to Arizona. An air waybill dated November 2, 1990, indicates the shipment of two crates with a total weight of 185 kilos from England to Arizona. Two Nikon Inc. invoices dated February 23, 1988, and June 18, 1990, are presented which indicate that a 28mm lens and an 80mm lens, respectively, were shipped to the protestant.

The protestant states that it shared an exhibition booth with De Vere at "Photokina Weltmesse des Bildes" (World Fair for Imaging Systems), which was held in Cologne, Germany, from October 3-9, 1990. The protestant submits the Photokina visitor information book as proof to show that its camera system was exhibited at a public fair. The information book lists De Vere Ltd. as a booth holder located in Hall 12.1, Aisle B, Stand 30. The book states that tickets for the fair may be purchased in advance for DM25 (German Marks), and at the Ticket Office for DM30; these tickets admit "trade" visitors to Halls 1-14. The book also indicates that "Hobby Tickets" are available at the ticket office for DM15, which admits visitors to Halls 1-9 and 11. Halls 1-9 and 11 contained the "amateur product range" of photo, film, and video/audio items, while Halls 12-14 contained "Professional media (Professional sound and image communication), Photofinishing (equipment, systems and materials)." A copy of a page in the September 1990 issue of "Photomethods" magazine is presented announcing the fair. The record also contains a letter dated June 24, 1991, from the German Chamber of Industry & Commerce stating that the exhibition was open to the public.

ISSUE:

Whether the camera system displayed at a photo show abroad is eligible for duty-free treatment under subheading 9801.00.60, HTSUS.

LAW AND ANALYSIS:

Subheading 9801.00.60, HTSUS, provides for the free entry of articles which are returned after having been exported for temporary use abroad solely for exhibition or use in connection with any public exposition, fair, or conference, provided such articles are returned by or for the account of the person who exported them.

In connection with the entry of articles exported for temporary exhibition and returned and claimed to be exempt from duty under subheading 9801.00.60, HTSUS, a certificate of exportation on Customs Form 3311, and a declaration of the importer on Customs Form 4455 for articles of either domestic or foreign origin are required. 19 CFR 10.66(a)(1) and (2). However, if it is shown to be impracticable to produce the certificate of exportation, the district director may accept other satisfactory evidence of exportation, or may take a bond on Customs Form 301 to secure the production of such certificate or other evidence. 19 CFR 10.66(b).

With regard to the requirement that the returned articles be exported solely for exhibition or use at a public fair, in Headquarters Ruling Letter (HRL) 221961 dated May 15, 1990, the issue was whether gemstones, which were exported for exhibition at the Hong Kong Watch and Jewelry Fair and returned to the U.S., were eligible for subheading 9801.00.60, HTSUS, treatment, because orders were solicited during the fair. It was stated that the controlling factor that Customs will focus on in determining the applicability of subheading 9801.00.60, HTSUS, is the intention of the exporter at the time of exportation, and that compliance with the provision of subheading 9801.00.60, HTSUS, requires that no commercial venture (i.e, sale of goods) be contemplated at the time of exportation. However, a sale which is incidental to the showing at an exhibition, fair, or conference (i.e., when an exporter at the exposition or fair is prevailed upon to sell some of his wares) will not preclude the applicability of subheading 9801.00.60, HTSUS, to the remaining merchandise. Therefore, it was held that the exporter's acquisition of future orders did not violate the general prohibition of subheading 9801.00.60, HTSUS, against sales at the exposition when the primary intention was for exhibition and the exported articles were returned to the U.S.

The decision in HRL 221961 was based upon HRL 058569 dated December 8, 1978, which held that a sale of some of the articles exported for the purposes of item 802.30, Tariff Schedules of the United States (TSUS) (now subheading 9801.00.60, HTSUS), would not preclude the remaining articles from free entry under that provision when returned to the U.S. The analysis in HRL 221961 also discussed the history of subheading 9801.00.60, HTSUS. Subheading 9801.00.60, HTSUS, and item 802.30, TSUS, are based upon 19 U.S.C. 194 which contained no words prohibiting a sale. In 1962, when certain free entry provisions were consolidated (i.e., items 802.10, 802.20, and 802.30, TSUS) under one superior heading in Subpart 1A, Schedule 8, TSUS and the word "solely" was added to the heading immediately preceding the three aforementioned items, although a sale was prohibited under the predecessor provision to item 802.10 (formerly paragraph 1815, Tariff Act of 1930, as amended) TSUS, the 1960 Tariff Study stated that the consolidation was not to effect any significant change.

In the instant case, based upon the two Burlington air waybills and the Maron invoices #25449 and #25477 that were attached to each air waybill, it is clear that all of the items the subject of this protest (i.e., the JVC conversion system and the Nikon camera system), as well as other camera equipment listed on invoice #25449, were shipped from the U.S. to England. However, the protestant only returned the JVC conversion system and the Nikon camera system. Based upon the evidence presented, with the exception of the camera equipment listed under item M650 (JVC conversion system), all of the other camera equipment listed on Maron invoice #25449 (i.e., items M170, M600, M400, and MC1600) were not returned to the U.S.

Although the Maron invoices #25449 and #25477 which were attached to the Burlington air waybills, both state that the items were for the Photokina show, only the Burlington air waybill #94509940 dated September 20 (referencing the Nikon camera system), indicates that the items shipped abroad would be returned to the U.S. It is therefore our opinion that only the items which are listed on Maron invoice #25477 which was attached to the Burlington air waybill #94509940 dated September 20, 1990, (i.e., the Nikon camera system, consisting of a stand, camera 430004, 80mm 690454, 5 x 7 CL 49969, 5 x 7 CRC 89141, and loop 49968) were sent to the Photokina show solely for exhibition purposes. [We note that the stand, 5 x 7 CL 49969, 5 x 7 CRC 89141, and loop 49968 were already accorded duty-free treatment as American Goods Returned.] With regard to the camera equipment items listed as M650 on Maron invoice #25449 that are a part of the JVC conversion system (i.e., stand #49958, JVC TK7100, 28mm lens, monitor, and copy lites), although these items were returned to the U.S., because the Burlington air waybill #94509925 dated September 18, 1990, did not indicate that the camera equipment would be returned and, in fact, some of the equipment did not return, this is indicative that the JVC conversion system was not exported solely for exhibition purposes as required under subheading 9801.00.60, HTSUS.

The next issue we must address is whether the Nikon camera system was exhibited at a public exposition, fair, or conference. In C.S.D. 92-23 (HRL 556092 dated October 22, 1991) fur goods were exported to Canada from the U.S. for display at an annual "fur show", for the purpose of soliciting sale orders from attendees. Admission to the show was not restricted to members of a private trade association; however, only someone with a reasonable business interest in attending the show was permitted to attend. The show was advertised through trade or professional journals, and through invitations or letters sent to prospective attendees. Preregistration was required because of space limitations, and no items were actually sold and delivered at the show. It was held that a fair or conference may be considered "public" so long as it does not deny admission, for reasons other than space limitation, to persons who have a reasonable business interest in attending the event. Therefore, the returned fur goods were determined to be eligible for duty-free treatment under subheading 9801.00.60, HTSUS.

In HRL 067426 dated December 8, 1981, medical equipment was exported to Canada for exhibition and demonstration at a joint meeting of the International Society of Hematology and the International Society of Blood Transfusion. The meeting was open only to members of these two societies. Therefore, it was not found to be a "public" conference within the meaning of item 802.30, TSUS. Furthermore, in HRL 222792 dated January 10, 1991, which reconsidered HRL 221961 dated May 15, 1990, although a Hong Kong watch and jewelry fair was allegedly open only to members of the watch and jewelry trades, no indication was found that the fair excluded the general public; therefore, the jewelry and gemstones exported for exhibition at the fair and returned to the U.S were eligible for the duty treatment provided under 9801.00.60, HTSUS.

In this case, the evidence presented indicates that Photokina was a "public" fair within the meaning of subheading 9801.00.60, HTSUS. As in HRL 222792, although the De Vere booth was located in a Hall that was open only to visitors with a "trade" ticket which allowed access to all of the 14 Halls, there is no indication in the visitor's information book that the general public was prohibited from purchasing such a ticket. As in C.S.D. 92-23, Photokina was advertised in a magazine which serves various industries and businesses. Furthermore, the letter from the German Chamber of Industry and Commerce indicates that Photokina is a fair held every two years in Cologne, Germany, and that it is open to the public. During the October 3-9, 1990, fair, it is stated that 164,747 visitors attended, 33.5 percent of which were private visitors.

HOLDING:

Based on the information submitted, we find that only the camera equipment items which are a part of the Nikon camera system (i.e., stand, camera, 80mm, 5 x 7 CL, 5 x 7 CRC, and loop), are eligible for duty-free treatment under subheading 9801.00.60, HTSUS. It appears that adequate documentation has been presented to establish that these items were exported from the U.S. solely for exhibition purposes at a "public" fair as required by subheading 9801.00.60, HTSUS. Accordingly, the protest should be granted and denied in part. A copy of this decision should be attached to Customs Form 19, Notice of Action, to be sent to the protestant.

Sincerely,

John Durant, Director

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