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 > 1998 HQ Rulings > HQ 560135 - HQ 560470 > HQ 560418

Previous Ruling Next Ruling
HQ 560418




February 25, 1998

RR:TC:SM 560418 DLD

CATEGORY: CLASSIFICATION

Port Director
U.S. Customs Service
10 Causeway Street, Suite 603
Boston, MA 02222-1059

RE: Decision on Application for Further Review of Protest No. 0401-96-100521. 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 laser smoke obscuration instrumentation, carbon monoxide and carbon dioxide analysis instrumentation imported from the United Kingdom by Worcester Polytechnic Institute.

FACTS:

Worcester Polytechnic Institute (WPI) placed an order on June 2, 1995, with a British manufacturer for laser smoke obscuration instrumentation, carbon monoxide and carbon dioxide analysis instrumentation. The device, characterized as a Large Scale Oxygen Depletion Instrument and Ducting apparatus, and hereafter referred to as a "room calorimeter", is a large console made up of a series of individual components. It is used to determine certain fire properties from a substance, object or material. The device was entered on December 12, 1995. WPI filed an application for duty-free entry of a scientific instrument or apparatus under subheading 9810.00.60, HTSUS, on June 27, 1996. The application was denied on September 23, 1996, on the following grounds:

It is our determination that the laser smoke obscuration instrumentation, carbon monoxide and carbon dioxide analysis instrumentation is not eligible for duty-free treatment inasmuch as there is the intention to use the instrumentation for commercial purposes within the meaning of the governing regulations. In response to our query of June 28, 1996, in which we asked whether there would be any use of the importation by, or for the benefit of, any commercial entity, the response was, in part:

The purpose of this instrument is to enable academic research, most particularly in support of master's theses and doctoral dissertations. It is anticipated that some of this academic research will receive financial support from off-campus sponsors. Most of the off-campus sponsors would be government agencies although some may be for-profit corporations or trade associations. It is also possible that some secondary activities may involve testing for government agencies or for-profit corporations or trade associations. In this sense, the instrument could be used for the benefit of a commercial entity.

Pursuant to subsection 301.4(a)(3) of the joint regulations 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. The running of tests for the private sector is consid- ered commercial use of the instrumentation of the application. Accordingly, the laser smoke obscuration instrumentation and carbon monoxide and carbon dioxide analysis instrumentation may not obtain duty-free treatment under subheading 9810.00.60, HTSUS.

Accordingly, the entry was liquidated as dutiable on September 23, 1996. A protest was timely filed on November 7, 1996, with Boston Customs. The protest was subsequently forwarded to Customs Headquarters for further review pursuant to 19 CFR 174(c). This is the response of Customs Headquarters to the request for further review.

ISSUE:

Does laser smoke obscuration instrumentation, carbon monoxide and carbon dioxide analysis instrumentation qualify as a scientific instrument or apparatus under subheading 9810.00.60, HTSUS?

LAW AND ANALYSIS:

The relevant portion of the regulations pertaining to the denial was 15 CFR 301.4(a)(3), which states that in determining the eligibility of the instrument of the application for duty-free entry under subheading 9810.00.60, HTSUS, the following criteria shall be used by the Commissioner of Customs or his designee. Customs shall determine:

Whether the instrument which is the subject of the application is intended for the exclusive use of the applicant institution and is not intended to be used for commercial purposes. For the purposes of this section, commercial uses would include, but not necessarily be limited to: distribution or sale of the instrument by the applicant institution; any use by, or for the primary benefit of, a commercial entity; or use of the instrument for demonstration purposes in return for a fee or other valuable consideration. In making the above determination, the Commissioner may consider, among other things, whether the results of any research to be performed with the instrument will be fully and timely made available to the public. For the purposes of this section, use of an instrument for the treatment of patients is considered noncommercial. If any of the Commissioner's determinations is in the negative, the application shall be found to be outside the scope of the Act [Public Law 89-651] and shall be returned to the applicant with a statement of the reason(s) for such findings. [Emphasis added.]

The protest argues that "even though there is a possibility that some corporate sponsorship may materialize, the results of all research efforts are published and are available to the public." The availability of the results of any research to be performed with the instrument or apparatus is a factor which weighs toward approval of the application (15 CFR 301.4(a)(3)).

The response on the application to item 7.C., pertaining to uses for clients or persons who are not students or personnel of WPI stated that "it is anticipated that some limited commercial testing services will be provided to consulting engineers and others. To date, one such project has been done." On August l, 1997, in the course of conducting the further review of the protest, a query was sent to WPI asking whether, in the period from the importation in December 1995, to the present, there had been any commercial use of the room calorimeter. On September 11, 1997, WPI responded that there had been one instance of the testing of materials for a for-profit company.

In view of the statements by WPI subsequent to the application that during the two years since the importation of the room calorimeter there has been only one instance of testing for a for-profit entity and that "the results of all research efforts are published and are available to the public", the room calorimeter is considered to qualify for duty-free entry under application item 7.C., pertaining to commercial use as well as the other requirements necessary for Customs approval for duty-free treatment under subheading 9810.00.60, HTSUS. However, WPI should be advised that any further testing for commercial entities or any other commercial use within the remaining three years of the five years following entry would require WPI to pay the duty on the room calorimeter which would otherwise have been due (See 15 CFR 301.4(a)(3), 15 CFR 301.9(b), 15 CFR 301.9(c.)).

Accordingly, Docket Number 97-089 was assigned to the duty-free application on October 23, 1997, signifying Customs approval. The application was then forwarded to the Department of Commerce for their review and determination. The Department of Commerce approved the application on January 28, l998.

HOLDING:

The subject instrumentation is not intended for commercial purposes, and the duty-free application has now been approved by both Customs and the Department of Commerce. Accordingly, the protest should be allowed in full.

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 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
Commercial Rulings Division


Previous Ruling Next Ruling

See also: