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NY C80374





October 7, 1997

CLA-2-98:RR:NC:1:118 C80374

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.6000

Mr. Emil Klipstein
Mechwin Corporation
460 Nepperhan Avenue
Yonkers, NY 10701

RE: The applicability of subheading 9802.00.6000, Harmonized Tariff Schedule of the United States, to certain brass and copper wire made from scrap.

Dear Mr. Klipstein:

In your letter dated September 26, 1997, you requested a tariff classification ruling.

You state that brass and copper scrap is the resulting by-product of a manufacturing process done to wire you produce. You have requested guidance as to the applicability of subheading 9802.00.6000, Harmonized Tariff Schedule of the United States (HTS), to imported brass and copper wire which would be manufactured from this exported scrap. You state it is your intention to further process this wire after importation, although, you did not elaborate on what this manufacturing process entails.

Subheading 9802.00.6000, HTS, provides a partial duty exemption for:

[a]ny article of metal (as defined in U.S. note 3(d) of this subchapter) manufactured in the United States or subjected to a process of manufacture in the United States, if exported for further processing, and if the exported article is processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing.

This tariff provision imposes a dual "further processing" requirement on eligible metal articles: one foreign, and when returned, one domestic. Articles of metal satisfying these statutory requirements may be classified under subheading 9802.00.60, HTS, with duty only upon the value of such processing performed outside the U.S., upon compliance with the documentation requirements of section 10.9, Customs Regulations (19 CFR 10.9).

The Customs Service has consistently held that subheading 9802.00.60, HTS, is inapplicable to scrap obtained directly from processing foreign-made metal in the U.S. The requirement that scrap be a metal article "manufactured or subjected to a process of manufacture" in the U.S. is satisfied only if the metal article from which the scrap was obtained was initially manufactured or subjected to a process of manufacture in the U.S. Customs does not consider processes such as the dismantling (by whatever means), shredding, crushing, ripping and grinding of obsolete articles and industrial scrap to be manufacturing processes, whether or not accompanied by sorting, grading or other similar activities to promote the salability or utility of the scrap. Manufacturing begins once raw materials are available and does not include reclamation activities undertaken with respect to obsolete and industrial scrap prior to the creation of raw materials for new manufacturing. Based on the information submitted, the scrap in this case is obtained from metal articles which were produced in the U.S. Thus, the metal scrap in the instant case is "manufactured or subjected to a process of manufacture" in the U.S., as required by subheading 9802.00.60, HTS. Had the metal scrap been obtained directly from processing foreign-made metal in the U.S., and not subjected to a process of manufacture in the U.S., the subsequent manufactured wire would need to be classified within Heading 74.08.

In C.S.D. 84-49, 18 Cust. Bull. 957 (1983), it was stated that:

[f]or purposes of item 806.30 [the precursor provision to subheading 9802.00.60, HTS], the term "further processing" has reference to processing that changes the shape of the metal or imparts new and different characteristics which become an integral part of the metal itself and which did not exist in the metal before processing; thus, further processing includes machining, grinding, drilling, threading, punching, forming, plating and the like, but does not include painting or the mere assembly of finished parts by bolting, welding, etc.

Manufacturing brass and copper wire abroad, utilizing this qualifying scrap, clearly constitutes a "further processing" as enumerated in C.S.D. 84-49, supra at 963. However, insufficient information has been provided as to the further processing that you intend to do in the United States. As previously stated, in order to be considered "further processing," some operation must be applied to the metal which changes the shape or form of the metal or imparts new and different characteristics which become an integral part of the metal itself. Processing performed on an already completed article, incident to using it for the purpose intended, is not sufficient to constitute "further processing." Intelex Systems, Inc. v. United States, 59 CCPA 138, C.A.D. 1055 (1972)

Based on the information submitted, manufacturing brass and copper wire abroad using U.S. origin brass and copper scrap, satisfies the foreign "further processing" requirement of subheading 9802.00.60, HTS. Entitlement to the partial duty exemption under subheading 9802.00.60, HTS, is contingent upon compliance with the documentary requirements of 19 CFR 10.9 and meeting the requirements of the "further processing" of the wire here in the United States. In addition, you must satisfy the director at the port of entry that the actual performance of the subsequent processing of the wire in the U.S. was performed within a reasonable period of time.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Kathy Campanelli at 212-466-5492.

Sincerely,

Robert B. Swierupski
Director,

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