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HQ 954058




April 14, 1995

CON-2-07-CO:R:C:E 954058 AJS

CATEGORY: CONDITIONALLY FREE

District Director
U.S. Customs Service
10 Causeway Street
Room 603
Boston, MA 0222-1059
ATTN: Edward Szymczak, Supervisory Import Specialists

RE: Protest 0401-92-100384; General Note 3(c)(iv); HQ 079093; HQ 726350.

Dear Sir:

This is our decision in protest 0401-92-100384, dated June 18, 1992, concerning the assessment of duties on entries of experimental civil aircraft engine parts.

FACTS:

The protestant entered civil aircraft engine parts under subheading 8411.91.90, Harmonized Tariff Schedule of the United States (HTSUS), and claimed duty-free status under its blanket certification of use in civil aircraft on file with the U.S. Customs Service pursuant to 19 CFR 10.183. This protest does not involve the issue of the protestant's failure to file certifi- cation for use in civil aircraft when the blanket certification on file had expired. The subject parts were imported for purposes of testing and development, and subsequent exportation. After entry, these parts were installed (or set aside for installation) in test engines which typically are fired and run in a test cell. The test engines usually are not placed in service on commercial airplanes. Customs determined that the subject parts were not being used in civil aircraft because they were not imported for incorporation in flight-capable commercial aircraft. Customs liquidated the subject entries and assessed duties at 3.7 percent ad valorem.

ISSUE:

Whether the subject engine parts qualify for duty-free entry under General Note 3(c)(iv), HTSUS.

LAW AND ANALYSIS:

Initially, we note that this protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(A). The date of liquidation was April 10, 1992, and this protest was filed on June 18, 1992. We also note that the liquidation of an entry is a protestable matter pursuant to 19 U.S.C. 1514(a)(5).

General Note 3(c)(iv) provided:

Articles Eligible for Duty-Free Treatment Pursuant to the Agreement on Trade in Civil Aircraft. Whenever a product is entered u nder a provision for which the rate of duty "Free ( C)" appears in the "Special" subcolumn, the importer shall file a written statement, accompanied by such supporting documentation as the Secretary of the Treasury may require, with the appropriate customs officer stating that the imported article has been imported for use in civil aircraft, that it will be so used and that the article has been approved for such use by the Administrator of the Federal Aviation Authority (FAA) or by the airworthiness authority in the country of exportation, if such approval is recognized by the FAA as an acceptable substitute for FAA certification, or that an application for approval for such use has been submitted to, and accepted by, the Administrator of the FAA. For purposes of the tariff schedule, the term "civil aircraft" means all aircraft other than aircraft purchased for use by the Department of Defense or the United States Coast Guard.

We note that this note was subsequently changed to General Note 6, HTSUS.

The specific issue in this protest is whether the subject engine parts used for testing and development purposes are imported for use in civil aircraft and that they are so used within the meaning of the above note.

In HQ 079093 (December 16, 1986), also published as C.S.D. 87-4, Customs addressed the application of the above note under the Tariff Schedules of the United States (TSUS). That case involved underwing fairing panels imported for use both in static test and fatigue test aircraft. These aircraft were incapable of actual flight because certain equipment not needed for the tests were not installed. The issue was whether the actual use of the
aircraft parts govern their eligibility for duty-free entry under General Note 3(c)(iv). Customs ruled that the clear intent of the note requires actual use of the subject parts in a flight-capable aircraft. Therefore, Customs denied duty-free treatment of the subject panels because they were used in test aircraft incapable of actual flight.

In this case, the subject parts were installed in test engines which are fired and run in a test cell. The test engines usually are not placed in service on commercial aircraft, and no evidence exists in the file to indicate that the subject parts were placed in service on commercial aircraft. Based on these facts, we find HQ 079093 instructive for determining that the subject parts were not imported for use in civil aircraft nor so used in civil aircraft. Therefore, the General Note 3(c)(iv) is inapplicable in this case.

In HQ 726350 (September 20, 1984), Customs addressed the application of the above note under the TSUS for experimental aircraft engines imported to test aircraft. A review of the file indicates that the engines were utilized in a flight test on a certified aircraft. Customs stated that insofar as the experimental nature of engines is concerned, nothing in the headnote or in the newly published amendments to the Customs Regulations (T.D. 84-109) addresses that issue. Accordingly, Customs concluded that if the proper certification of use is filed the fact that the articles imported will be used in experimental aircraft, are themselves of an experimental nature, or are to be used in connection with testing or experiments is irrelevant as long as all other requirements of law and regulation are complied with. We note that one of these requirements stated in the ruling is that an article will be used in civil aircraft. Therefore, we view both HQ 726350 and HQ 079093 as requiring that the articles in General Note 3(c)(iv) be used in civil aircraft.

Despite the mutual requirement of the above discussed decisions, this protest is nevertheless factually distinguishable from HQ 726350 because the subject parts were not utilized in a flight test on a certified aircraft. As stated previously, the subject parts were only used in a test cell. Accordingly, we do not find HQ 726350 instructive for determining that the subject parts were imported for use in civil aircraft or so used in civil aircraft as required by General Note 3(c)(iv).

HOLDING:

The protest is denied. The subject engine parts were not imported for use in civil aircraft nor so used in civil aircraft as required pursuant to General Note 3(c)(iv), HTSUS.

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 mailed by your office, with the Customs Form 19, 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
Commercial Rulings Division

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