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HQ 227059




August 2, 1996

ENT-4-01-RR:IT:EC 227059 GOB

CATEGORY: ENTRY

Rae Fawcett
Vice President, East
Circle International, Inc.
810-R Oregon Avenue
Linthicum, MD 21090

RE: 19 U.S.C. 1321; 19 CFR 10.151, 10.153(d); Reimportation of catalogue merchandise; Consolidated shipment

Dear Ms. Fawcett:

This is in response to your letter of June 14, 1996 on behalf of Victoria's Secret Catalogue ("VSC").

Pursuant to the request of the VSC representatives at the oral conference on this matter on July 31, 1996, we have forwarded a copy of your request to the special Classification and Marking Branch of this office for a determination with respect to a specific issue raised by VSC at the oral conference, i.e., the applicability of subheading 9801.00.25, HTSUS to "[a]rticles which VSC purchased domestically, that were previously imported by parties related and unrelated to VSC." See page one, "category (c)" of your ruling request.

FACTS:

In your letter of June 14, 1996, you state as follows, in pertinent part:

When VSC receives an order for merchandise from an individual consumer in Canada, it ships the ordered goods in a package which contains a return form for the consumer to use in the event an item does not meet the consumer's specifications. The return form provides the address of an agent designated by VSC in Canada, i.e., TNT/Canada, to which the returns are to be sent. TNT accumulates all individually packaged consumer returns and moves them into the USA in a truckload shipment approximately twice per week. Formal entry is made at the port of Detroit, and duties are paid upon reimportation of only those articles which were previously imported by parties other than VSC.

The consolidation of the individual consumer returns in Canada is simply an aggregation of personal, non-commercial transactions designed to provide an easier means of returning goods for Canadian consumers and to enable more efficient processing of the re-importation for VSC and Customs...
...
We respectfully submit that, consistent with Customs' position concerning consumer returns to mail-order companies and the "personal, non-commercial nature" of these returns, even when consolidated, the exemption from duty under CR 10.151 for importations not over $200 should apply to each individual consumer return (valued at $200 or under, of course) re-imported by VSC pursuant to its Canadian consolidation program. As discussed below, notwithstanding CR 10.153(d), we submit that the consolidation of these individual non-commercial returns from individual consumers should not preclude the applicability of CR 10.151. (Emphasis in original.)

ISSUE:

Whether VSC can import merchandise which it purchased domestically and which was previously imported by other parties, as described supra, duty-free under 19 CFR 10.151?

LAW AND ANALYSIS:

Section 651 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103- 182, 107 Stat. 2057, 2209 (1993) amended 19 U.S.C. ?1321. As amended, 19 U.S.C. 1321 authorizes the Secretary of the Treasury to promulgate regulations relating to administrative exemptions from duty for certain articles, including gifts and personal and household goods. In all other cases, the Secretary is authorized to promulgate regulations providing for a duty exemption for a specific amount, not to be less than $200. The prior law provided for a duty exemption for those articles valued less than $5.

Interim regulations were published in the Federal Register on June 13, 1994, T.D. 94-51 (59 FR 30289), including regulations concerning certain duty exemptions, e.g., 19 CFR 10.151. These regulations became effective on August 23, 1994. See T.D. 94-71 (59 FR 43283); see also, T.D. 95-31 (60 FR 18983).

19 CFR 10.151 provides:

?10.151 Importations not over $200.

Subject to the conditions in ?10.153 of this part, the port director shall pass free of duty and tax any shipment of merchandise, as defined in ?101.1(o) of this chapter, imported by one person on one day having a fair retail value, as evidenced by an oral declaration, the bill of lading (or other document filed as the entry) or manifest listing each bill of lading, in the country of shipment not exceeding $200, unless he has reason to believe that the shipment is one of several lots covered by a single order or contract and that it was sent separately for the express purpose of securing free entry therefor or of avoiding compliance with any pertinent law or regulation. Merchandise subject to this exemption shall be entered under the informal entry procedures (see subpart C, part 143, and ??128.24, 145.31, 148.12, and 148.62, of this chapter).

19 CFR 10.153 provides, in pertinent part:

?10.153 Conditions for exemption.

Customs officers shall be further guided as follows in determining whether an article or parcel shall be exempted from duty and tax under ?10.151 and ?10.152: (d) Consolidated shipments addressed to one consignee shall be treated for purposes of ??10.151 and 10.152 as one importation.

VSC states in its ruling request that it utilizes the duty-free provision of subheading 9801.00.10, HTSUS for articles of U.S. origin and the duty-free provision of subheading 9801.00.25, HTSUS for articles imported by VSC previously.

VSC seeks to be able to import articles, as described supra, which it purchased domestically, and which were imported by parties other than VSC, duty-free under 19 CFR 10.151. VSC cannot do so. 19 CFR 10.153(d) provides that a consolidated shipment addressed to one consignee, which is the case in the subject situation, shall be treated as one importation. VSC stated at the oral conference a consolidated shipment consists of hundreds or thousands of articles being returned. The total value of the shipment far exceeds the $200 limitation of 19 CFR 10.151, thus precluding the use of that regulation. (The statutory authority for 19 CFR 10.151, 19 U.S.C. 1321, authorizes the Secretary of the Treasury to promulgate regulations providing for a duty exemption for a specific amount, not to be less than $200.)

VSC cites Ruling 556429 dated March 24, 1992, which states, in pertinent part:

The return of merchandise in a consolidated package from customers in Canada who purchased it from a U.S. store's catalog is not subject to visa and quota requirements, provided the package contains a separate form for each article which identifies it, states the reason for the return and lists the names of the individual customers.

Ruling 556429 is not supportive of VSC's position because Ruling 556429 did not involve the statute or regulations which are at issue in the case of VSC.

HOLDING:

VSC cannot import merchandise which it purchased domestically and which was previously imported by other parties, as described supra, duty-free under 19 CFR 10.151 because the merchandise exceeds the $200 limitation of 19 CFR 10.151. Pursuant to 19 CFR 10.153(d), the articles are treated as one importation.

Sincerely,

Director,
International Trade Compliance

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