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HQ 559603




RR:TC:SM 559603 DLD
April 19, 1996

CATEGORY: CLASSIFICATION

Port Director
U.S. Customs Service
Room 2200
1000 2nd Avenue
Seattle, WA 98104

RE: Decision on Application for Further Review of Protest No. 3001-95-100651. Subheading 9810.00.60, HTSUS. Duty Free Treatment of Scientific Instruments.

Dear Sir:

This protest was filed against your decision in the liquidation as dutiable of an electron microscope imported by the Washington State University (WSU).

FACTS:

The Washington State University placed an order on October 6, 1994, with Philips Electronic Instruments Company of the Netherlands for an electron microscope. On February 1, 1995, Professor M. Grant Norton of the Department of Mechanical and Materials Engineering applied to Customs Headquarters for duty-free entry for the electron microscope under Subheading 9810.00.60, HTSUS. The application was denied on February 24, 1995. The denial letter stated as the basis for the denial:

It is our determination that the electron microscope is not eligible for duty-free entry under Subheading 9810.00.60, HTSUS, inasmuch as there is the intention to use the instrument for commercial purposes within the mean- ing of the regulations. Pursuant to subsection 301.4(a)(3) of the joint regula- tions of the Department of Commerce and the Department of the Treasury
(15 CFR 301.4(a)(3)), the instrument which is the subject of the application must be intended for the exclusive use of the applicant institution and must not be intended to be used for commercial purposes. In your answer to appli- cation item 7.c., you state:

The instrument will be available for use by other institutions, local industry and scientists at National Laboratories (e.g.,
Pacific Northwest Laboratories). As such it will enable the development and fostering of collaborative interactions to the benefit of the scientific, educational, and industrial commun- ity in the Pacific and Inland Northwest.

Use of the electron microscope by local industry and collaborative interac- tions with the industrial community is considered by Customs to be "com- mercial use". Accordingly, the electron microscope is not eligible for duty- free treatment under Subheading 9810.00.60, HTSUS.

The electron microscope entered the Customs Territory of the U.S. on March 7, 1995, at Seattle-Takoma International Airport. Inasmuch as the application for duty-free entry had been denied, the entry was liquidated as dutiable on June 30, 1995. A protest was timely filed on September 22, 1995, by Washington State University with a request for further review pursuant to 19 CFR 174.24(c). Accordingly, the protest was forwarded to Customs Headqudarters by your staff and received on December 13, 1995. This is the response of Customs Headquarters to the protest.

ISSUE:

Does an electron microscope imported by the Washington State University qualify as a scientific instrument or apparatus under Subheading 9810.00.60, HTSUS?

LAW AND ANALYSIS:

The protest contains no argument as to why the duty-free application should not have been denied nor why duty-free entry should now be allowed. The Customs Protest and Summons Information Report (Customs Form 6445A) submitted by the Port of Seattle states that "[t]he importer is requesting reconsideration of this decision", i.e., the denial of duty-free entry. WSU included Exhibits A through E, however,with the protest. They consist of the following printed or photocopied material:

Exhibit A: The denial letter of February 24, 1995. Exhibit B: The duty-free application (in part). Exhibit C: The WSU proposal to the National Science Foundation for funding for the electron microscope.
Exhibit D: The WSU 1994 Financial Report
Exhibit E: Two pages from the WSU Faculty Manual.

Exhibit D contains charts showing, for example, the percentage of "Externally Funded Research Expense" attributable to "nonfederal grants" for each year from 1989 to1994 (p. 8). Exhibit E gives policy and guidance to WSU faculty members on how to conduct contract and collaborative research. It states that "[t]he University encourages individual investigators, departments, and other units to seek financial support for research...outside the funds ordinarily available to the Board of Regents" (p. 71). This affirms Customs contention that contract research and collaborative research with industry is not only allowed, but encouraged. Thus, the material submitted with the protest affirms rather denies that contract and collaborative research with industry is carried out at WSU. And in all the material comprising the protest there is no disaffirmation of the statement by WSU on the duty-free application, which caused the application to be denied, that "[t]he instrument will be available for use by...local industry".

HOLDING:

The protest should be denied in full by your office. The protest is not eligible for further review by Customs Headquarters pursuant to subsection 174.24(c) of the Customs Regulations (19 CFR 174.24(c)), inasmuch as no "facts are alleged or legal arguments presented which were not considered at the time of the original ruling".

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, a copy of this decision should be attached to the Customs Form 19 and mailed by your office to the protestant as part of the notice of action on the protest no later than 60 days from the date of this letter. Any liquidation 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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