CON-9-04-RR:IT:EC 226589 IOR
W.F. Whelan
W.F. Whelan Co.
International Terminal
Detroit Metropolitan Airport
P.O. Box 42422
Detroit, MI 48242
RE: Temporary Importation Under Bond (TIB); clock springs;
frames; "Processing"; repackaging; foaming; Subheading
9813.00.05, HTSUS; United States v. Border Brokerage Co.;
John v. Carr & Son, Inc. v. United States; T.D. 78-77;
C.S.D. 80-234
Dear Mr. Whelan:
This is in response to your ruling request dated October 19,
1995, on behalf of Petri Inc., regarding the applicability of the
TIB procedure under subheading 9813.00.05.20, HTSUS, to imported
steering wheel frames and clock springs.
FACTS:
Petri intends to import clock springs and steering wheel
frames under a Temporary Importation Bond (TIB). The frames will
be foamed subsequent to importation. The photographs you
submitted show the imported frame to be a bare frame, and the
foamed frame to have a foam covering the frame, molded to fit the
form of the frame. According to the brochure excerpt which you
submitted, the clock spring is a part of an automobile airbag
unit. The clock spring and frame will then be put into a kit
with miscellaneous domestic parts and shipped to Germany and
Mexico for leather wrapping. Upon exportation the TIB will be
canceled. You ask whether subheading 9813.00.05.20, HTSUS is
applicable.
ISSUE:
Whether the above-described operation qualifies the frame
and clock spring for duty-free entry under TIB provision,
subheading 9813.00.05.20, HTSUS.
LAW AND ANALYSIS:
Subheading 9813.00.05.20 HTSUS, is a statistical annotation
of subheading 9813.00.05. Statistical annotation 9813.00.05.20,
HTSUS, provides for the temporary importation of articles to be
processed into articles manufactured or produced in the United
States. Statistical annotations are not included in the legal
text of the HTSUS. HTSUS, General Statistical Note 2; Tariff Act
of 1930 as amended by section 1204(a) of the Omnibus Trade and
Competitiveness Act of 1988, Pub. L. No. 100-418, 102 Stat. 1107,
1148 (1988). Therefore, the statistical annotations have no
legal status, and the provision under which you would enter the
merchandise is subheading 9813.00.05, HTSUS. Under subheading
9813.00.05, HTSUS, articles to be repaired, altered or processed
(including processes which result in articles manufactured or
produced in the United States), may be entered temporarily free
of duty, under bond, for exportation within one year from the
date of importation. This period may be extended for one or more
additional periods, which when added to the initial period does
not exceed three years. U.S. Note 1(a) of Subchapter XIII,
Chapter 98, HTSUS. In order to qualify under this provision, the
merchandise imported may not be imported for the purpose of sale
or sale on approval. Id.
With respect to the clock springs, they are just being
repackaged with other items before being exported. We have
consistently held that such operations are not considered to be
repairs, alterations, or processing within the meaning of
subheading 9813.00.05, HTSUS, and its predecessors (e.g., ruling
of November 26, 1976 (File: 207064), holding that the repacking
of foreign language tape cassettes with foreign language books in
special book boxes containing books and tapes did not meet the
requirements of the predecessor of the subheading; see also
Treasury Decision (T.D.) 78-77; Customs Service Decision (C.S.D.)
80-234 (the language "repaired, altered or processed" means "more
than mere repacking of the imported merchandise itself and more
than a change in the form or number of the imported containers");
United States v. Border Brokerage Co., 48 CCPA 10, C.A.D. 754
(1960), and John v. Carr & Son, Inc. v. United States, 69 Cust.
Ct. 78, 347 F. Supp. 1390, C.D. 4377 (1972), aff'd. 61 CCPA 52,
496 F.2d 1225, C.A.D. 1118 (1974)).
With respect to the frames, we are of the opinion that the
foaming they undergo is an alteration or processing under
subheading 9813.00.05, HTSUS. Over the years, Customs has
liberally interpreted this provision to include processes which
would not otherwise qualify as a manufacture or production for
drawback under 19 U.S.C. 1313(a) or (b). For example, in a
ruling of February 17, 1977 (File: 207358), we determined that
aircraft engine and gear box bearings underwent an alteration or
process under the predecessor of the subheading when, in a "clean
room atmosphere" they were cleaned, dried, dipcoated in a
preservative and vacuum sealed. In an information letter of
September 25, 1986 (File: 218958), we determined that glass
windows which were imported and coated so as to provide a
screening for the deflection of laser light, and subsequently
exported for final assembly into prismatic binoculars, were
subject to a processing within the meaning of subheading
9813.00.05, HTSUS.
For the frame operation, you must meet all of the
accountability requirements under the U.S. Notes of Subchapter
XIII, Chapter 98, HTSUS. In particular, subheading 9813.00.05,
HTSUS, U.S. Note 2(b) states that if any processing of such
merchandise results in an article manufactured or produced in
the United States: (I) a complete accounting will be made to the
Customs Service for all articles, wastes and irrecoverable losses
resulting from such processing; and (ii) all articles and
valuable wastes resulting from such processing will be exported
or destroyed under Customs supervision within the bonded period;
except that in lieu of the exportation or destruction of valuable
wastes, duties may be tendered on such wastes at rates of duties
in effect for such wastes at the time of importation.
The applicable Customs regulations may be found at 19 CFR
10.31 through 10.40. Section 10.31(f) states that a bond shall
be given on Customs Form 301 in an amount equal to double the
duties which it is estimated would accrue (or such larger amount
necessary to protect the revenue) had all the articles covered by
the entry been entered under an ordinary consumption entry. The
basis for the computation of the amount of a temporary
importation bond is estimated duties determined in accordance
with section 141.90 and 141.103 of the Customs Regulations (19
CFR 141.90 and 19 CFR 141.103). To this amount is added any
other duties that the district director ascertains may become due
on the articles so entered.
HOLDING:
The repackaging of the clock springs is not a permissible
operation under subheading 9813.00.05, HTSUS. The foaming of the
frame is a permissible operation under subheading 9813.00.05,
HTSUS.
Sincerely,
Director, International Trade
Compliance Division