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HQ 559516




June 14, 1996

CLA-2 R:C:S 559516 DEC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9810.00.60

Mr. Louis S. Shoichet
Tompkins & Davidson
One Astor Plaza - 43rd Floor
1515 Broadway
New York, New York 10036-8901

RE: Subheading 9810.00.60, HTSUS; Instrument; Apparatus; Primary Mirror;
Telescope; 15 CFR 301.2(k)

Dear Mr. Shoichet:

This is in response to your correspondence dated October 17, 1995, in which you request a binding ruling concerning the classification of an eight meter optical telescope mirror on behalf of your client, the Association of Universities for Research in Astronomy, Incorporated (AURA).

FACTS:

AURA is in charge of managing the Gemini Project pursuant to a cooperative agreement with the National Science Foundation (NSF) which involves, in part, the erection of the Gemini Telescope on Mauna Kea, Hawaii. The primary mirror blank for the telescope is manufactured by Corning, Incorporated, in New York. REOSC Optique of Ballainvilliers, France, will grind and polish the eight meter mirror blank. You state that the optically worked mirror will weigh approximately 25 tons and it will allow for a telescope with a specification goal of .10 arc/second at the infrared wavelength which exceeds any other ground telescope previously constructed.

On March 30, 1995, the Customs Service issued a letter denying AURA's application for classification pursuant to subheading 9810.00.60, HTSUS, on the ground that the optically worked mirror is a "component" of the telescope and therefore ineligible for the claimed duty-free status. In support of this conclusion, Customs cited section 301.2(k) of the joint regulations of the Department of Commerce and the Department of the Treasury (15 CFR 301.2(k)), which provides that applications for duty-free entry shall not be accepted for components of instruments.

Subsequently, on October 17, 1995, you submitted a request for reconsideration contending that Customs' current interpretation of subheading 9810.00.60, HTSUS, is erroneous to the extent that it precludes duty-free treatment for separate components of scientific equipment. On February 23, 1996, representatives from the NSF, AURA, Customs, and counsel met to discuss the eligibility of the primary mirror for classification pursuant to subheading 9810.00.60, HTSUS. As a result of this meeting, on March 13, 1996, you forwarded a document prepared by G.W. Van Citters, Jr. of the NSF which explained the role, function, and design characteristics of the Gemini Telescope's primary mirror in relation to the telescope itself. In addition, on May 14, 1996, you submitted cost information with respect to the various items used to erect the telescope.

In the letter submitted on March 13, 1996, Mr. Van Citters highlighted the fact that the two most critical factors of an astronomical telescope are the collecting area of the telescope and the quality of the image that the telescope delivers to the instrumentation. The giant 8-meter primary mirror is the collecting area of the telescope and is capable of collecting over 600,000 times as much light as the human eye. Mr. Van Citters stated that the degree of detail that can be obtained from an object being viewed and the extent to which a faint object can be detected at all is determined by the quality of the image that is formed at the focus of the telescope. The Gemini Project's goal is to construct a primary mirror capable of concentrating light from a distant star into a spot with a diameter less than that of a human hair. According to Mr. Van Citters, it is the unprecedented size and resolution of the Gemini Project's primary mirror that are of paramount importance to the telescope.

ISSUE:

Whether the Gemini Telescope primary mirror qualifies as a scientific instrument or apparatus under subheading 9810.00.60, HTSUS.

LAW AND ANALYSIS:

Subheading 9810.00.60, HTSUS, provides for the duty-free treatment of:

Articles entered for the use of any nonprofit institution, whether public or private, established for educational or scientific purposes:

9810.00.60 Instruments and apparatus, if no instrument or apparatus of equivalent scientific value for the purposes for which the instrument or apparatus is intended to be used is being manufactured in the United States (see U.S. note 6 to this subchapter).

United States Note 6(a), Subchapter X, Chapter 98, HTSUS, states that

The term "instruments and apparatus" (subheading 9810.00.60) embraces only instruments and apparatus which are both provided for and dutiable in:
. . .
(xvii) Chapter 90: all provisions (except subheadings 9009.11 through 9009.90, 9013.80 and 9023.00)
. . .

Since the telescope's primary mirror would ordinarily be classified under subheading 9001.90.06, HTSUS (and not under one of the excluded sections cited above), you contend that Customs should find that the primary mirror is an "instrument or apparatus" eligible to be classified under subheading 9810.00.60, HTSUS. In the administration of this tariff provision, the Customs Service relies on the regulatory language contained in 15 CFR Part 301 which is jointly administered by the Department of Commerce and the Department of the Treasury. Section 301.2(k), which was promulgated in July, 1982, pursuant to public notice and comment states that

(k) Components of an instrument means parts or assemblies of parts which are substantially less than the instrument to which they relate. A component enables an instrument to function at a specified minimum level, while an accessory adds to the capability of an instrument. Applications shall not be accepted for components of instruments that did not enter duty-free under tariff item 851.60 or for components of instruments being manufactured or assembled by a commercial firm or entity in the U.S. In determining whether an item is a component ineligible for duty-free consideration or an accessory eligible for such consideration, Customs shall take into account such factors as the item's complexity, novelty, degree of integration and pertinency to the research purposes to be performed by the instrument as a whole.

47 Fed. Reg. 32515, 32516 (July 28, 1982) (codified at 15 CFR

Citing this language in our March 30, 1995, letter, Customs denied the AURA's application for duty-free treatment, finding that the primary mirror is a "component" rather than a scientific instrument or apparatus.

In support of your request for reconsideration, you cite to the regulatory history of this provision and the intent of the Florence Agreement to foster the free exchange of
scientific knowledge. A review of the regulatory history reveals that the proposed rule provided that
applications shall be considered for components or [sic] novel instruments being built or assembled by qualified nonprofit institutions as part of the institutions's scientific research or science related program.

46 Fed. Reg. 23755, 23757 (April 28, 1981).

When the language in the final regulation was adopted, this proposed language was deleted in response to a public comment which objected to the allowance of separate applications for "components" of novel instruments being built or assembled by qualified non-profit institutions. In the Background discussion of the Final Rule, the Government stated:

Infrequently, however, we receive applications for parts of instruments which, even through they may be referred to as
"components" in the trade, are so integral to the instrument's function that a scientific instrument may not be said to exist without them. In other cases, while an identifiable instrument may exist without the component, one or several of the applicant's research purposes clearly could not be undertaken without the capability added by the " component."

In such cases, we believe rejection of the application would be more restrictive than intended by either the Agreement [Florence Agreement] or the law. Accordingly, in lieu of the deleted proposal, we have added clarifying language permitting
Customs to consider on a case-by-case basis such components as accessories for the purposes of these regulations.

47 Fed. Reg. 32515, 32516 (July 28, 1982).

Upon further consideration, we agree that when the regulatory history is read in conjunction with the language of section 301.2(k), Customs has some latitude in limited circumstances when deciding whether an item is a "component" ineligible for duty-free entry under subheading 9810.00.60, HTSUS. It is clear in this case that the primary mirror is of paramount importance to the overall function of the telescope. As Mr. Van Citters of the NSF described in his letter, the collection of light and the quality of the image that is formed at the focus of the telescope are the two most critical attributes of the Gemini telescope. It is the primary mirror's unprecedented size and resolution attributes that are critical to the telescope's ability to perform its function in astronomical research.

In light of the applicable law, regulations, and regulatory history, we believe that a rejection of the application for duty-free treatment of the primary mirror would be more restrictive than that which was intended by the Florence Agreement. Therefore, in consideration of such factors as the primary mirror's complexity, novelty, degree of integration and pertinency to the research purposes to be performed by the Gemini Project's telescope as a whole, we find that the mirror constitutes the very essence of the telescope and thus qualifies to be considered under a separate application pursuant to procedures set forth in 15 CFR Part 301.

HOLDING:

The application for the primary mirror used in the Gemini Project telescope should be accepted on the ground that the primary mirror constitutes the essence of the scientific instrument, the telescope.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction

Sincerely,

John Durant

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