CLA-2 R:C:S 559008 MLR
District Director
U.S. Customs Service
P.O. Box 610
Pembina, North Dakota 58271-0610
RE: Application for Further Review of Protest No. 3401-94-100109; Denial of duty exemption under HTSUS subheading
9801.00.20 to retaining ring device; documentation; 19 CFR
10.108
Dear Sir:
This is in reference to a protest and application for
further review filed by ABB Power Distribution, Inc. ("ABB"),
contesting the denial of the duty exemption under subheading
9801.00.20, Harmonized Tariff Schedule of the United States
(HTSUS), to a retaining ring device ("device").
FACTS:
The protestant claims that the device should be duty-free
under 9801.00.20, HTSUS. Customs denied the claim because
insufficient documentation was provided, namely, proof of the
original entry of this device. The record includes a Certificate
of Registration, Customs Form (CF) 4455, indicating that the
device was exported to Canada by ABB on August 13, 1993. The
record also contains an invoice, bill of lading, shipper's export
declaration, and Canadian Customs Coding Form. The Certificate
of Return, on the bottom of CF 4455, indicates that the article
was returned unchanged to the U.S. on September 30, 1993. An
affidavit from ABB dated November 19, 1993, is also submitted
indicating that ABB, Canada, issued a purchase order to ABB,
Richmond, Virginia, for the rental of the device, and that ABB,
Canada, was billed for rental charges. The protestant also
submits a copy of ABB's plant register to show that the device
was in its inventory on April 26, 1988, and in a letter dated
November 3, 1994, Steve Gooch, Controller of ABB, states that
"the equipment was originally imported from Switzerland about 20
years ago and has been used and stored at [its] facility in
Richmond, Va."
ISSUE:
Whether the retaining ring device is eligible for the duty
exemption under subheading 9801.00.20, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.20, HTSUS, provides duty-free treatment
for:
[a]rticles, previously imported, with respect to which
the duty was paid upon such previous importation or
which were previously free of duty pursuant to the
Caribbean Basin Economic Recovery Act or Title V of the
Trade Act of 1974, if (1) reimported, without having
been advanced in value or improved in condition by any
process of manufacture or other means while abroad,
after having been exported under lease or similar use
agreements, and (2) reimported by or for the account of
the person who imported it into, and exported it from,
the United States.
Therefore, two conditions must be satisfied in order to obtain
the duty-free status under this provision.
In this instance, your office agrees that condition (1) is
satisfied. The Certificate of Return indicates that the device
was reimported to the U.S. "unchanged", and the affidavit
indicates that the device was exported to ABB, Canada, pursuant
to a rental agreement with ABB, Virginia. Your office also
agrees that condition (2) is partially satisfied. Customs Form
4455, the shipper's export declaration, the Canadian Customs
form, and the U.S. Customs entry indicate that ABB exported and
reimported the device to and from the U.S.
As support that the device was reimported by or for the
account of the person who imported it into the U.S., the
protestant submits a copy of ABB's plant register indicating that
the device was in its inventory on April 26, 1988. The
protestant states that the device is over 20 years old and,
therefore, proof of the original import entry to prove duty was
paid on a previous importation is not available and should not be
required.
Section 10.108, Customs Regulations (19 CFR 10.108),
provides that:
[f]ree entry shall be accorded under subheading
9801.00.20, [HTSUS], whenever it is established to the
satisfaction of the district director that the article
for which free entry is claimed was duty paid on a
previous importation, is being reimported without
having been advanced in value or improved in condition
by any process of manufacture or other means, was
exported from the United States under a lease to a
foreign manufacturer, and is being reimported by or for
the account of the person who previously imported it
into, and exported it from, the United States.
Consequently, it is clear that no specific documents are required
to show that duty was paid on a previous importation and that the
article is being reimported by or for the account of the person
who previously imported it into the U.S. (unlike other
regulations promulgated for similar statutory conditions such as
subheading 9801.00.25, HTSUS, proof must only be submitted to the
satisfaction of the district director).
In Headquarters Ruling Letter (HRL) 555966 dated May 24,
1991, a machine tool was registered with Customs on CF 4455
before exportation to Germany for testing purposes. Although the
protestant claimed that it had originally imported the machine
tool and paid all necessary duties in 1980 or 1981, no supporting
documentation to that effect was submitted. Accordingly, it was
determined that the machine tool was ineligible for duty-free
treatment under this tariff provision because the protestant
failed to submit any documentation showing that the machine tool
was previously imported and that it was previously imported by or
for its account to the satisfaction of the district director.
In this case, however, the protestant has not failed to file
any documents, but has submitted its plant register dated April
26, 1988, to show that the device was in its inventory in the
U.S., and that it is at least five years old. The protestant has
also stated that the device is 20 years old and has affirmed that
it was imported by ABB in 1973 when its plant first opened.
Consequently, while information concerning the port of entry and
exact date of importation is lacking, it is our opinion that the
information submitted is sufficient evidence to meet condition
(2) of subheading 9801.00.20, HTSUS, namely, that the device was
reimported by or for the account of the person who imported it
into the U.S.
HOLDING:
On the basis of the information submitted, it is our opinion
that the device is eligible for duty-free treatment under
subheading 9801.00.20, HTSUS. In order to receive duty-free
treatment under this tariff provision, no specific documents are
required; rather, the importer must establish to Customs
satisfaction that the statutory requirements have been met. It
is our opinion that the information submitted is sufficient proof
that all conditions of subheading 9801.00.20, HTSUS, are met.
Accordingly, the protest should be granted in full.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065 dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be attached to Customs Form 19,
Notice of Action, and be mailed by your office to the protestant
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