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HQ 559008




April 27, 1995

CLA-2 R:C:S 559008 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9801.00.20

District Director
U.S. Customs Service
P.O. Box 610
Pembina, North Dakota 58271-0610

RE: Application for Further Review of Protest No. 3401-94-100109; Denial of duty exemption under HTSUS subheading 9801.00.20 to retaining ring device; documentation; 19 CFR 10.108

Dear Sir:

This is in reference to a protest and application for further review filed by ABB Power Distribution, Inc. ("ABB"), contesting the denial of the duty exemption under subheading 9801.00.20, Harmonized Tariff Schedule of the United States (HTSUS), to a retaining ring device ("device").

FACTS:

The protestant claims that the device should be duty-free under 9801.00.20, HTSUS. Customs denied the claim because insufficient documentation was provided, namely, proof of the original entry of this device. The record includes a Certificate of Registration, Customs Form (CF) 4455, indicating that the device was exported to Canada by ABB on August 13, 1993. The record also contains an invoice, bill of lading, shipper's export declaration, and Canadian Customs Coding Form. The Certificate of Return, on the bottom of CF 4455, indicates that the article was returned unchanged to the U.S. on September 30, 1993. An affidavit from ABB dated November 19, 1993, is also submitted indicating that ABB, Canada, issued a purchase order to ABB, Richmond, Virginia, for the rental of the device, and that ABB, Canada, was billed for rental charges. The protestant also submits a copy of ABB's plant register to show that the device was in its inventory on April 26, 1988, and in a letter dated November 3, 1994, Steve Gooch, Controller of ABB, states that "the equipment was originally imported from Switzerland about 20 years ago and has been used and stored at [its] facility in Richmond, Va."

ISSUE:

Whether the retaining ring device is eligible for the duty exemption under subheading 9801.00.20, HTSUS.

LAW AND ANALYSIS:

Subheading 9801.00.20, HTSUS, provides duty-free treatment for:

[a]rticles, previously imported, with respect to which the duty was paid upon such previous importation or which were previously free of duty pursuant to the Caribbean Basin Economic Recovery Act or Title V of the Trade Act of 1974, if (1) reimported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, after having been exported under lease or similar use agreements, and (2) reimported by or for the account of the person who imported it into, and exported it from, the United States.

Therefore, two conditions must be satisfied in order to obtain the duty-free status under this provision.

In this instance, your office agrees that condition (1) is satisfied. The Certificate of Return indicates that the device was reimported to the U.S. "unchanged", and the affidavit indicates that the device was exported to ABB, Canada, pursuant to a rental agreement with ABB, Virginia. Your office also agrees that condition (2) is partially satisfied. Customs Form 4455, the shipper's export declaration, the Canadian Customs form, and the U.S. Customs entry indicate that ABB exported and reimported the device to and from the U.S.

As support that the device was reimported by or for the account of the person who imported it into the U.S., the protestant submits a copy of ABB's plant register indicating that the device was in its inventory on April 26, 1988. The protestant states that the device is over 20 years old and, therefore, proof of the original import entry to prove duty was paid on a previous importation is not available and should not be required.

Section 10.108, Customs Regulations (19 CFR 10.108), provides that:

[f]ree entry shall be accorded under subheading 9801.00.20, [HTSUS], whenever it is established to the satisfaction of the district director that the article for which free entry is claimed was duty paid on a previous importation, is being reimported without having been advanced in value or improved in condition by any process of manufacture or other means, was exported from the United States under a lease to a foreign manufacturer, and is being reimported by or for the account of the person who previously imported it into, and exported it from, the United States.

Consequently, it is clear that no specific documents are required to show that duty was paid on a previous importation and that the article is being reimported by or for the account of the person who previously imported it into the U.S. (unlike other regulations promulgated for similar statutory conditions such as subheading 9801.00.25, HTSUS, proof must only be submitted to the satisfaction of the district director).

In Headquarters Ruling Letter (HRL) 555966 dated May 24, 1991, a machine tool was registered with Customs on CF 4455 before exportation to Germany for testing purposes. Although the protestant claimed that it had originally imported the machine tool and paid all necessary duties in 1980 or 1981, no supporting documentation to that effect was submitted. Accordingly, it was determined that the machine tool was ineligible for duty-free treatment under this tariff provision because the protestant failed to submit any documentation showing that the machine tool was previously imported and that it was previously imported by or for its account to the satisfaction of the district director.

In this case, however, the protestant has not failed to file any documents, but has submitted its plant register dated April 26, 1988, to show that the device was in its inventory in the U.S., and that it is at least five years old. The protestant has also stated that the device is 20 years old and has affirmed that it was imported by ABB in 1973 when its plant first opened. Consequently, while information concerning the port of entry and exact date of importation is lacking, it is our opinion that the information submitted is sufficient evidence to meet condition (2) of subheading 9801.00.20, HTSUS, namely, that the device was reimported by or for the account of the person who imported it into the U.S.

HOLDING:

On the basis of the information submitted, it is our opinion that the device is eligible for duty-free treatment under subheading 9801.00.20, HTSUS. In order to receive duty-free treatment under this tariff provision, no specific documents are required; rather, the importer must establish to Customs satisfaction that the statutory requirements have been met. It is our opinion that the information submitted is sufficient proof that all conditions of subheading 9801.00.20, HTSUS, are met. Accordingly, the protest should be granted in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 4, 1993, Subject: Revised Protest Directive, this decision should be attached to Customs Form 19, Notice of Action, and be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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