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NY E81627




May 5, 1999

CLA-2-98 RR:NC:1:110 E81627

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.5060

Mr. Larry Pei
Bexco Technologies, Inc.
2535 Research Drive
Corona, CA 91720

RE: The tariff classification of electrostatic copiers being returned from Indonesia after being refurbished. Applicability of duty exemption under HTSUS subheading 9802.00.50.

Dear Mr. Pei:

In your letter dated April 5, 1999, you requested a tariff classification ruling.

It is stated in your ruling request that your company is a distributor/reseller of copiers and its products. Your company plans to purchase used Japanese copiers, such as Canon, and Sharp in the United States, and then export them to your subsidiary in Indonesia for refurbishing. The copiers will be basically plain paper, indirect, electrostatic copiers. The copiers will be disassembled, cleaned and inspected and if there any defective parts it will be replaced with new parts. The copiers will be completely refurbished inside and outside and will have the appearance of a new machine. The machines are one-functional, black and white electrostatic copiers, and at the conclusion of the refurbishing will remain as such.

The refurbishing process will consist of the following:
a. Each copier is disassembled down to the frame. b. All components are cleaned and inspected. c. All consumable parts and supplies are replaced. (such as toner cartridges) d. Mandatory parts replaced are bushings, bearings, blades, rollers, etc. e. Copiers are reassembled to factory specifications. f. Outside panels are refinished to look like new. g. Unit is labeled as remanufactured, and the meter is set to (0) zero.

No major sub-assemblies such as imaging assemblies, optics assemblies, or user control assemblies, etc., will be replaced or altered. Basically only the worn parts will be replaced and the outside to look like new. The approximate cost of the refurbishing will run in the 25% to 30% range of the total cost.

ISSUE:

Whether the refurbishing of these used Japanese copiers constitutes repairs or alterations within the meaning of subheading 9802.00.50, HTS, thereby qualifying the returned copiers for the duty exemption under this tariff provision.

LAW AND ANALYSIS:

Articles exported from and returned to the U.S., after having been advanced in value or improved in condition by repairs or alterations in Indonesia, may qualify for a duty exemption under HTSUS subheading 9802.00.50, 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. “Repairs or alterations” are defined in 19 CFR 181.64 as the restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the U.S.

In previous rulings, we have held that subheading 9802.00.50, HTS, will be applicable to articles subject to both partial and complete disassembly, where repairs are made and parts are replaced as long as the essential components and, therefore, the identity of the article remains intact throughout the repair process. Note HQ ruling letter 557991 dated October 17, 1991. In the situation before us, the defective parts of the copiers will be replaced with new parts and cosmetic changes will be made to the outside panels of the copiers. Since none of the major sub-assemblies of the copiers, such as the imaging assemblies, optics assembly, and user control assemblies will be replaced, and since the evidence does not otherwise indicate that the operations changed the essential identity of the returned copiers, we find that the operations performed in Indonesia constitute repairs and alterations within the meaning of subheading 9802.00.50, HTSUS. Please note also HQ rulings 559770, 559405, and 559485 for similar merchandise.

HOLDING:

On the basis of the information submitted, it is our opinion that the Indonesian operations enumerated above constitute “repairs” or “alterations” since the essential identity of the copiers is retained. Therefore, provided none of the essential components have been replaced and there is no other evidence which indicates that the operations performed abroad changed the essential identity of the copiers, and provided further that the documentary requirements of 19 CFR 181.64(c) are satisfied, the copiers are eligible for the full duty exemption under subheading 9802.00.50, HTS. Duty would thus be upon the value of the repairs or alterations. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 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 Art Brodbeck at 212-637-7019.

Sincerely,

Robert B. Swierupski
Director,

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