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HQ 562057




August 27, 2002

MAR-2-05 RR:IA 562057 RFC

CATEGORY: CLASSIFICATION

Tariff No. 8414.10.0000; 9801.00.25

Port Director of El Paso
U.S. Customs Service
3600 Paisano
El Paso, TX 79901

RE: Protest and Application for Further Review No. 2402-00-100036

Dear Sir or Madam:

This is in reference to a Protest and Application for Further Review (number 2402-00-100036) filed by F.C. Felhaber & Co., Inc. contesting the denial of a claim under subheading 9801.00.25 of the Harmonized Tariff Schedule of the United States (HTSUS) for duty free treatment.

FACTS:

The importer of record is F.C. Felhaber & Co., Inc. The merchandise was exported from Mexico. It consists of vacuum pumps.

The merchandise was imported and entered on September 9, 2000. The entry was liquidated on October 20, 2000, under HTSUS subheading 8414.10.0000.

On October 24, 2000, a protest was filed against the rate of duty. The protest contends that the entry should have been liquidated under subheading 9801.00.25. In a letter dated October 11, 2000 (stamped with the date October 24, 2000) and submitted by Franz Felhaber, F.C. Felhaber & Company, Inc. states, in part, that:

The following serves to protest your decision on this entry and request that we enter this merchandise under 9801.00.2500. We would like to change the importer of record to show Becker Pumps Corporation.

As you are aware, this equipment is being returned because it did not work properly. Becker Pumps Corp. imported this pump from Germany (see attached 7501) and shipped it to Demek S.A. through their distributor Wisco Supply. Beck Pump would like to import this pump and repair it under the classification mentioned earlier. (9801.00.2500 see attached HTSUSA.)

Our client meets all the provisions required to use these tariff (sic) and we respectfully request that you allow us to change importer of recorder and tariff number on this entry.

The documents that must be filed pursuant to 19 CFR § 10.8a (b) in connection with the entry of articles claimed to be free of duty under HTSUS subheading 9801.00.25 were not filed with the Customs Service; and the port director did not waive the production of the documents.

The protest was filed in a timely manner within ninety days from the date of liquidation.

ISSUES:

Whether the merchandise that is the subject of this protest is entitled to duty free treatment under HTSUS subheading 9801.00.25.

LAW AND ANALYSIS:

Dutiable merchandise that is imported and afterward exported, even though duty may have been paid on the first importation, is liable to duty on every subsequent importation into the customs territory of the United States unless an exception exists. See 19 CFR 141.2. One such exception can be found in HTSUS subheading 9801.00.25, which provides as follows:

Articles, previously imported, with respect to which the duty was paid upon such previous importation if (1) exported within three years after the date of such previous importation, (2) reimported without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, (3) reimported for the reason that such articles do not conform to sample or specifications, and (4) reimported by or for the account of the person who imported them into, and exported them from, the United States.

HTSUS Subheading 9801.00.25.

In addition to meeting all the requirements set forth in subheading 9802.00.25, certain documents must be filed in connection with the entry of articles claimed to be free of duty under HTSUS subheading 9801.00.25:

A declaration by the person abroad who received and is returning the merchandise to the United States, which contains the following information and statements: a description of the merchandise; the name and address of the U.S. exporter from whom the merchandise was received; a statement that the merchandise has not been advanced in value or improved in condition by any process of manufacture or other means; and the name and address of the consignee in the United States to whom the merchandise is being returned because it does not conform to sample or specifications and the reasons why it does not conform to sample or specifications; and

A declaration by the owner, importer, consignee, or agent, which contains the following information and statements: a description of the merchandise; a statement that the merchandise was previously imported into the United States that also identifies the port, entry number, date of entry, name and address of the importer and that the duty was paid at that time; a statement that the merchandise was exported from the United States that also identifies the port of exportation, the date of exportation, the name of the exporter and that the merchandise was exported without benefit of drawback; a statement that identifies who the articles are being reimported by or for the account of; and a statement that the attached declaration from the foreign shipper (which identifies the foreign shipper) is correct in every respect.

19 CFR § 10.8a (b).

If the port director concerned is reasonably satisfied because of the nature of the articles or production of other evidence that the requirements of HTSUS subheading 9801.00.25, and the related section and additional U.S. notes have been met, he or she may waive the production of the above-mentioned documents. See 19 CFR § 10.8a (c).

Finally, U.S. Note 1 to HSTUS chapter 98, provides in pertinent part, that:

Any article which is described in any provision in this chapter is classifiable in said provision if the conditions and requirements thereof and of any applicable regulations are met. (Emphasis added.)

U.S. Note 1 to HTSUS Chapter 98.

In light of the above, for one to receive the preferential tariff treatment provided for under subheading 9801.00.25, several requirements must be met. One of the requirements that must be met is that the merchandise is being reimported for the reason that it did not conform to sample or specifications. The above-mentioned October 11, 2000, letter from the protestant states that “this equipment is being returned because it did not work properly.” The letter further states that “Becker Pump would like to import this pump and repair it under the classification mentioned earlier.”

There is no evidence presented that the equipment or pump failed to meet sample or specification. For example, no evidence has been presented to establish that the equipment was delivered in a defective condition. See HQ 558746 (January 6, 1995) (Merchandise delivered in a defective condition that is rejected for that reason by the person to whom it is shipped qualifies as merchandise that fails to conform to sample or specifications.) Therefore, the protestant has failed to demonstrate that the merchandise did not conform to sample or specification as required under subheading 9801.00.25.

In addition, in the instant case, the above-mentioned documents required pursuant to 19 CFR § 10.8a (b) were not filed with the Customs Service; and the port director did not waive the production of the documents.

HOLDING:

The above-mentioned merchandise is not entitled to duty free treatment under subheading 9801.00.25 because (1) no evidence has been presented to show that it failed to conform to sample or specification and (2) the documentary requirements of 19 CFR § 10.8a (b) were not satisfied. Accordingly, the protest should be denied.

In accordance with section 3 A (11) (b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject Revised Protest Directive, you are to mail this decision, together with Customs Form 19, to the protestant no later than sixty (60) days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty (60) days from the date of this decision, the Office of Regulations and Rulings will make the decision available to U.S. Customs Service personnel, and to the public on the U.S. Custom Service web site (ww.customs.gov), by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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