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HQ

559513

April
1, 1998

CLA-2 RR:TC:SM 559513 BLS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.50, 6802.91.05, 6802.91.15

Regional Commissioner c/o Protest and Control Section
6 World Trade Center, Room 761
New York, New York 10048-0945

RE: Application for Further Review of Protest No. 1001-95-106218; eligibility of certain stone for partial duty exemption under subheading 9802.00.50,
HTSUS; subheadings 6802.91.05, 6802.91.15

Dear Sir:

This is in reference to the memorandum dated October 18, 1995, from the Chief, Residual Liquidation and Protest Branch, forwarding the above-captioned Application for Further Review, timely filed on behalf of Domestic Marble and Stone Corp. Protestant has filed additional submissions in support of the protest, the most recent dated January 16, 1998.

In its letter dated July 8, 1996, copy enclosed, protestant has also advised that C.E. 4701-94-4471224201-3 should be withdrawn from our consideration of the protest. Please take appropriate action to comply with this instruction.

FACTS:

The subject merchandise is described on the entry invoices as "Vermont Imperial Danby Eureka Marble," quarried by Vermont Quarries Corp. in an underground site located near Danby, Vermont. The process of quarrying involves selecting an area for excavation, and cutting the stone from the quarry. This is accomplished by using diamond wire, diamond chains and drilling machines to saw and release areas of stone. When the stone has been cut from the wall, drilling machines and airbags are used to push it away from the wall.

After the stone is quarried, it is displayed for the buyer's selection and approval. Protestant advises that the stone covered by the subject entries was selected for installation in the Foley Square courthouse in New York City. The architect
chose the subject stone because of its specific color, graining, veining and physical characteristics.

Once the architect selects the stone, it is transported to Italy, where it is placed into a gang saw which slices it into smaller pieces. After this cutting process is completed, the material moves to an automatic honing machine. This device merely removes the roughness and scratches left by the gang saw. The stone is then cut to specific sizes required for the job and packaged for shipping back to the U.S.

Upon arrival in the U.S., the material is prepared for installation. This includes drilling anchor holes, cutting mitres and trimming the slabs to fit.

The merchandise was entered under subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), as articles exported for repair or alteration and returned to the U.S., with duty only on the value of the repair or alteration. The stone was classified upon entry under HTSUS subheading 6802.91.15, "Worked monumental or building stone......Other: Marble, travertine and alabaster: Marble: Other."

The entries were liquidated under subheading 6802.92, HTSUS, "Worked monumental or building stone (except slate) and articles thereof,...Other, Other calcareous stone," with no allowance for the value of the operations performed abroad. Protestant contends in this protest that subheading 9802.00.50, HTSUS, is applicable. Further, protestant contends that the imported stone is classifiable under HTSUS subheading 6802.21.50, as building stone of marble, simply cut or sawn, with a flat or even surface, or under subheading 6802.91.05, which provides for marble slabs.

ISSUES:

1) Whether the imported stone is eligible for the partial duty exemption under subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), upon return from Italy.

2) What is the proper classification of the stone?

LAW AND ANALYSIS:

Subheading 9802.00.50

Articles returned to the U.S. after having been exported to be advanced in value or improved in condition by repairs or alterations may qualify for the partial duty exemption under subheading 9802.00.50, HTSUS, provided the foreign operation does not destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. See A.F. Burstrom v. United
States, 44 CCPA 27, C.A.D. 631 (1956), aff'g C.D. 1752, 36 Cust. Ct. 46 (1956); Guardian Industries Corp. v. United States, 3 CIT 9 (1982). Accordingly, entitlement to this tariff provision is precluded where the exported articles are incomplete for their intended purpose prior to the foreign processing and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. Dolliff & Company, Inc. v. United States, 455 F. Supp. 618 (CIT 1978), aff'd, 599 F.2d 1015 (Fed. Cir. 1979). Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations when returned to the U.S., provided the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8), are satisfied.

In Headquarters Ruling Letter (HRL) 557939 dated August 31, 1994, quarried marble was cut in the U.S. into a rectangular block of stone and then exported to Italy, where it was cut into slabs, nominally polished, and returned to the U.S., where the slabs were processed by cutting to size and polishing. The completed products were used for table tops and other like products. In that case, we found that the exported stone was not complete for its intended use without the slicing operation performed in Italy, and that this operation was a necessary step in the final use of the product, e.g., table tops. We noted that the required additional processing in the U.S. was not relevant, as HTSUS subheading 9802.00.50 concerns the condition of the article as imported into the U.S. Accordingly, since the stone block as exported to Italy was not complete for its intended use, we held that the imported product was not entitled to the benefits of subheading 9802.00.50.

In HRL 555085 dated September 27, 1988, glass rectangles were exported to Japan, cut to smaller sizes, and lightly polished. The processing also included grounding of the edges. The articles were further processed in the U.S. upon return from Japan. Customs found in that case that the returned glass was commercially different from the exported glass, and, as in HRL 557939, the glass was not complete for its intended use upon exportation from the U.S. Rather, the Japanese
operations were necessary steps in the preparation of the finished glass.

In the instant case, the stone in its condition as exported to Italy requires further cutting into smaller specified sizes and additional operations in the U.S. before it is complete for its intended use as building stone. The operations performed in Italy are necessary steps in this manufacturing process, as are the finishing operations performed in the U.S. Accordingly, as the stone is not complete for its intended use upon exportation, it is not entitled to the benefits of HTSUS 9802.00.50 upon return from Italy.

We find that HRL 555949 (December 28, 1989) and HRL 555411 (August 11, 1989), cited by protestant, are not supportive of its position. HRL 555949 involved rope in material length sent to Mexico to be cut to shorter lengths. HRL 555411 involved cutting to length of wire and tieing the various lengths with a twist tie. Processing of this nature is considered an alteration since material lengths are exported and material lengths are also imported. Thus, the exported product is commercially indistinguishable from the returned article and is considered complete for its intended use upon exportation. We find that these cases are not analogous to the instant situation, as the stone is not complete for its intended use upon exportation, the operations performed abroad substantially exceed the mere cutting to length of the rope and wire involved in HRL 555949 and HRL 555411, and the returned product is clearly distinguishable from the exported stone.

Classification

As noted, supra, protestant is of the opinion that the imported stone is classifiable under HTSUS subheading 6802.21.50, as building stone of marble, simply cut or sawn, with a flat or even surface, or under subheading 6802.91.05, which provides for marble slabs.

As it appears that appropriate samples may not have been available at the time of entry, and were not available upon protest, the concerned import specialist could not conclude at the time of protest whether the stone was marble, as claimed on the entry. He therefore classified the merchandise under HTSUS subheading 6802.22, which does not provide for marble but for "Other calcareous stone." However, subsequent to filing the protest, this Customs officer examined the stone which (Customs concurs) had been used to build a courthouse in New York City. As a result of his inspection of the stone, the Customs officer advised this office that he
found the stone to be marble. However, he was also of the opinion that classification of these items depended on how they were cut and whether or not they were considered "Slabs." The NIS (National Import Specialist) confirmed the Customs officer's findings. Thus, protestant was requested to submit additional information showing a breakdown of the stone on an entry-by-entry basis of the type of building item involved, and of the value.

In submissions dated November 19, 1997 and January 16, 1998, protestant forwarded to Customs a breakdown of the marble building items (base, cornice, header, jamb, cladding and returns) and a corresponding total value for that item on an entry-by-entry basis. (In this regard, it is noted that the total value of the building items on an entry-by-entry basis does not appear to match in every case the total invoice values reflected on the entry. An additional submission may be required to reconcile these totals.)

The concerned Customs officer is of the opinion that the cladding, returns, jambs and headers are properly classifiable under subheading 6802.91.05, HTSUS, "Worked monumental or building stone (except slate) and articles thereof, ...Other:, Marble, travertine and alabaster: Marble: Slabs." The cornices and bases were not considered slabs, as such articles were finished beyond the definition of a slab
(".. broad, flat, rather thick piece, as of cake, stone, or cheese." Webster's II New Riverside University Dictionary, 1988). These articles were considered classifiable under HTSUS subheading 6802.91.15, "Worked monumental or building stone.....Other: Marble, travertine and alabaster: Marble: Other." HTSUS subheading 6802.21.50 was not considered applicable as the imported marble was polished, and not "simply cut or sawn." The NIS orally advised this office that he agrees with this determination.

We concur with the findings of the concerned field officer and the NIS with regard to the classification of the imported articles.

HOLDING:

1) The operations performed abroad on the stone are not considered repairs or alterations within the meaning of subheading 9802.00.50, HTSUS, since upon exportation from the U.S. the material is not complete for its intended use as building stone. Therefore, the imported product is not eligible for the partial duty exemption under this tariff provision.

2) The cladding, returns, jambs and headers are properly classifiable under
subheading 6802.91.05, HTSUS, "Worked monumental or building stone (except slate) and articles thereof, ...Other: Marble, travertine and alabaster: Marble:
Slabs." The cornices and bases are classifiable under HTSUS subheading 6802.91.15, "Worked monumental or building stone.....Other: Marble, travertine and alabaster: Marble: Other."

Under the circumstances, you are directed to deny the protest in part and grant the protest in part in accordance with the foregoing.

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 mailed by your office to the protestant attached to the Form 19, Notice of Action, no later than 60 days from the date of this letter. Any reliquidation of the entries 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 Ruling 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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