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HQ 559598




March 12, 1996

CLA-2 RR:TC:SM 559598 MLR

CATEGORY: CLASSIFICATION

Tariff No.: 9801.00.80

Port Director
U.S. Customs Service
P.O. Box 1490
St. Albans, VT 05478

RE: Application for Further Review of Protest No. 0201-95-100467 concerning denial of free entry of 1994 GMC Jimmy Van; previously exported from U.S.; drawback

Dear Sir:

This is in reference to the above-referenced Application for Further Review filed by A.N. Deringer, Inc., on behalf of Coblev. Inc., contesting the denial of an entry under heading 9801, Harmonized Tariff Schedule of the United States (HTSUS), to a 1994 GMC Jimmy Van.

FACTS:

The record indicates that a 1994 GMC Jimmy Van was entered July 21, 1995, at St. Albans, Vermont from Canada. The van's VIN is 1GJHG39K4RF532794. The record contains an explanation of the symbols contained in the VIN. The entry was liquidated under subheading 8703.24.90, HTSUS, on October 27, 1995, at a duty rate of 2.5 percent ad valorem. The protest, timely filed on November 13, 1995, claims that the van should have been allowed entry under heading 9801, HTSUS, because it was manufactured in the U.S., but not in a U.S. foreign trade zone (FTZ). A letter is submitted from General Motors Corporation stating that GMC has not and does not intend to manufacture or assemble heavy, medium or light duty trucks in a FTZ using non-privileged foreign material or material on a non-duty paid basis.

ISSUE:

Whether the GMC Jimmy Van is eligible for entry under heading 9801, HTSUS.

LAW AND ANALYSIS:

Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations are satisfied. While some change in the condition of the product while it is abroad is permissible, operations which either advance the value or improve the condition of the exported product render it ineligible for duty-free entry upon return to the U.S. Border Brokerage Company, Inc. v. United States, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970).

The pertinent documents required by 19 CFR 10.1, are a declaration from the foreign shipper that the articles were exported from the U.S. and that they are returned without having been advanced in value or improved in condition, and a declaration from the owner, importer, consignee, or agent that the articles were manufactured in the U.S. and that the articles were exported from the U.S. without benefit of drawback.

Your office denied entry under heading 9801, HTSUS, because it was not established to your satisfaction that the GMC Jimmy Van was not produced in a FTZ in the U.S. The van's VIN is 1GJHG39K4RF532794. The explanation of the VIN indicates that the first position denotes where the vehicle was built. A "1" means that the vehicle was built in the U.S. The eleventh position denotes the assembly plant. An "F" means Flint, Michigan. The Office of Field Operations, Trade Programs Branch informs us that the 1994 GMC Jimmy Van was not assembled in a FTZ established in Flint, Michigan. Accordingly, the van may qualify for free entry under subheading 9801.00.10, HTSUS, provided you are satisfied that the documentary requirements of 19 CFR 10.1 have been met. The Office of Field Operations, Trade Programs Branch also informs us that automobile manufacturers often claim drawback when their vehicles are exported from the U.S. If your office is not satisfied that the vehicle was exported from the U.S. without benefit of drawback, entry under subheading 9801.00.10, HTSUS, will not be applicable.

However, subheading 9801.00.80, HTSUS, provides for a duty on articles previously exported from the U.S. equal to the sum of any duty and internal-revenue tax imposed upon the importation of like articles not previously exported from the U.S., which, except for U.S. note 1, Subchapter I, Chapter 98, HTSUS, would qualify for free entry under one of the foregoing items and are not otherwise free of duty. But in no case is the duty to be in excess of the sum of (a) any customs drawback proved to have been allowed upon such exportation of the article, and (b) any internal revenue tax imposed, at the time such article is entered, upon the importation of like articles not previously exported. U.S. note 1, Subchapter I, states that the provisions in the subchapter (except subheadings 9801.00.70 and 9801.00.80) shall not apply to any article that is: "(a) exported with the benefit of drawback; ... or (c) manufactured or produced in the United States in a customs bonded warehouse...."

Accordingly, since it has been established that the vehicle was not produced in a U.S. FTZ, the vehicle may qualify for duty-free entry subheading 9801.00.10, HTSUS, treatment, provided the documentary requirements of 19 CFR 10.1 are satisfied. If your office is not satisfied that the vehicle was exported from the U.S. without benefit of drawback, the vehicle may be entered under subheading 9801.00.80, HTSUS, with duty to be assessed equal to the sum of any duty and internal-revenue tax imposed upon the importation of like articles not previously exported, but in no case in excess of the sum of (a) any customs drawback proved to have been allowed upon such exportation of the article, and (b) any internal revenue tax imposed, at the time such article is entered, upon the importation of like articles not previously exported.

HOLDING:

Based upon the information provided, the 1994 GMC Jimmy Van was not assembled in a FTZ in the U.S., but was manufactured in Flint, Michigan. Therefore, the vehicle will qualify for duty-free entry under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 CFR 10.1 are satisfied. If your office is not satisfied that the vehicle was exported from the U.S. without benefit of drawback, the vehicle may be entered under subheading 9801.00.80, HTSUS. Accordingly, this protest should be disposed of in accordance with this decision.

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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