United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1997 HQ Rulings > HQ 114022 - HQ 226416 > HQ 226295

Previous Ruling Next Ruling
HQ 226295

---

December 6, 1995

DRA-4-R:IT:EC 226295 IOR

CATEGORY: DRAWBACK

Port Director of Customs
Drawback Unit
10 Causeway St.
Boston, MA 02222-1059

RE: Microscope; unused merchandise drawback; 19 U.S.C. 1313(j)(1); 19 U.S.C.(j)(3); checking; screwing in objectives; manufacture or production; use

Dear Sir:

This is in response to a ruling request submitted on behalf of the claimant, by letter dated March 20, 1995 (and follow up letter dated July 5, 1995). We are in receipt of your memorandum dated October 20, 1995, commenting on the claimant's request. From the information presented this appears to be a current transaction. Pursuant to 19 CFR 177.1(a) a ruling may only be issued only with respect to prospective transactions. Therefore, this request is being treated as an internal advice request, pursuant to 19 CFR 177.11.

FACTS:

The claimant is an importer of microscopes, microscope components and accessories. Drawback has been and will be claimed at your regional office. The exported items at issue consist of a number of imported components that are simply packaged together, and not assembled. In response to a microscope order, the components required to fill the specific order, are pulled together from inventory. Prior to packaging, the objective lenses are screwed into place for the purpose of checking alignment and then unscrewed and put into their designated place in the standard Styrofoam packing frame. Considering the recent changes in drawback, specifically the institution of unused drawback, the claimant feels there may be operational savings if, after the alignment check, the objective lenses were left screwed in. Photographs submitted by the claimant show 1) the unassembled microscope components packaged with the objectives in tubes, alongside of the nosepiece, in the foam container for shipment, and 2) the unassembled microscope components with the objectives screwed into the nosepiece, packaged in the foam container for shipment.

In your memorandum dated October 20, 1995, you state that the issue is whether the screwing in of the objectives is an incidental operation allowable under unused merchandise drawback or a simple assembly which constitutes a manufacture.

According to information received from the claimant's broker, in a November 8, 1995 telephone conversation with a member of the Entry and Carrier Rulings Branch staff, the claimant is currently allowed drawback under 1313(j)(1), when the objectives are unscrewed from the nosepiece prior to exportation.

ISSUE:

Whether the merchandise at issue is eligible to receive drawback under 19 U.S.C. 1313(a) or (j)(1).

LAW AND ANALYSIS:

19 U.S.C. 1313(j)(1) provides that if imported merchandise, on which was paid any duty, tax, or fee imposed under Federal Law because of its importation is, before the close of the 3-year period beginning on the date of importation, exported and is not used within the United States before such exportation; then upon such exportation 99 percent of the amount of each duty, tax or fee so paid shall be refunded as drawback. Section 1313(j)(3) provides that:

The performing of any operation or combination of operations (including, but not limited to, testing, cleaning, repacking, inspecting, sorting, refurbishing, freezing, blending, repairing, reworking, cutting, slitting, adjusting, replacing components, relabeling, disassembling, and unpacking), not amounting to manufacture or production for drawback purposes under the preceding provisions of this section on-- (A) the imported merchandise itself in cases to which paragraph (1) applies,...
shall not be treated as a use of that merchandise....

The claimant proposes to gather the requisite microscope components for the microscope ordered, screw the objective lenses into the nosepiece of the microscope for the purpose of checking the alignment and export the unassembled microscope components with the objective lenses screwed in, as opposed to alongside of the microscope nosepiece. The "checking" operation is included within the exemplars listed in section 1313(j)(3), under "testing." The word "checking" is described as "to test or examine, as for accuracy or efficiency." The American Heritage Dictionary, 262 (2d ed. 1982). According to the information submitted, the separate microscope components are pulled from inventory and packaged together as the components of a complete microscope. This operation is not one included within the exemplars listed in section 1313(j)(3), furthermore, similar operations have previously been determined to be manufactures or productions.

Section 1313(j)(3) provides that the permitted operations cannot amount to a "manufacture or production." A "manufacture or production" has been defined as a process which transforms an article into a new and different article with a different name, character or use. Anheuser Busch v. United States, 207 U.S. 556 (1907). This office has previously approved manufacturing and production drawback proposals relating to microscopes. In T.D. 57-54288-E (HQ control number 275177, January 10, 1957), Customs approved a drawback allowance under 19 U.S.C. 1313(a) on imported microscope parts consisting of nose pieces, objectives, and condensor mounts. The manufacturing or production process approved consisted of fitting, matching, adjusting and adapting the imported parts for mounting into microscopes, involving the specific alignment of all parts to each other and to a certain type of stand. The imported parts were assembled and modified as required by each customer. The complete microscope was disassembled and arranged in a carrying case for exportation. In T.D.63-55888-C (HQ control number 275708, dated April 17, 1963), Customs approved a drawback allowance under 19 U.S.C. 1313(a) on imported microscope parts, manufactured into complete microscopes. The manufacturing process consisted of assembling the microscopes by dropping the eyepiece into the head, screwing the objectives into the nose piece, bolting or screwing an attachment to the stage and adjusting the microscope. Both of these approved drawback contracts entailed the importation of microscope parts, which were transformed into new and different articles-- the complete microscopes.

The merchandise at issue entails the importation of microscope components and the exportation of complete but disassembled microscopes. We find that as in the foregoing T.D.'s, the packaging together of microscope components into a disassembled complete microscope, is a manufacture or production under 19 U.S.C. 1313(a). The subject uniting of microscope parts and packaging operations result in a new and different article-- a complete disassembled microscope. The exported disassembled complete microscope also has a different character and use. In C.S.D. 80-58, Customs determined that "[t]he requirements that a manufactured article have a different character or use are satisfied when an imported article which is not suited for commercial use is further manufactured into one that is suited for commercial use." In C.S.D. 80-58, eyeglass frames were found not suited for commercial use when imported, whereas sunglasses were found to be so suited when exported. In this case, the disassembled complete microscope can be purchased for assembly and use as a microscope, whereas the separately imported components cannot be used as a microscope unless the purchaser has special knowledge regarding the matching of components for particular uses and has access to all of the parts needed. Although the claimant's operation does not entail a complete assembly of the microscopes, as in the foregoing T.D.'s, it does involve the matching and selecting of specific microscope components to fit the requirements of the customer order, an alignment check and arrangement of the disassembled microscope parts in a single container for exportation.

Based on the foregoing, uniting necessary microscope components which result in a disassembled complete microscope, and packaging the united components together is a manufacture which is eligible for drawback under 19 U.S.C. 1313(a). The operation is a manufacture or production whether or not the objectives are left screwed into the nosepiece or unscrewed and packaged separately alongside the other components.

HOLDING:

The subject operation of uniting microscope components for a disassembled complete microscope is a manufacture under 19 U.S.C. 1313(a).

Sincerely,

Director,
International Trade

Previous Ruling Next Ruling