OT-RR:CTF:VS H016586 GOB
TARIFF NOS.: 9801.00.20, 9802.00.50
Earline Thomas
Imports Administrator
Energizer Battery Manufacturing, Inc.
25225 Detroit Road
Westlake, OH 44145
RE: Subheadings 9801.00.20, 9802.00.50; Packaging
Dear Ms. Thomas:
This is in response to your correspondence of July 18, 2007 to the National Commodity Specialist Division of U.S. Customs and Border Protection (“CBP”). Your request was forwarded to this office by memorandum of August 15, 2007. Our ruling follows.
FACTS:
You describe the pertinent facts as follows. Energizer Battery Manufacturing, Inc. (“Energizer”) is considering the importation of primary cell carbon zinc batteries from its manufacturing facilities in Indonesia and Singapore. You state that the batteries would enter the United States duty-free under the provisions of the Generalized System of Preferences (“GSP”) and the United States-Singapore Free Trade Agreement.
After receiving the batteries from Indonesia and Singapore, Energizer intends to ship the batteries to its affiliate, Energizer Canada, Inc., in Walkerton, Ontario, Canada, to be packaged for retail sale. The packaged batteries would then be reimported from Canada into the United States and delivered to Energizer’s warehouses. Energizer will retain ownership of the batteries during this process.
You inquire as to whether the reimported batteries will be eligible for subheading 9802.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”) or any similar provision.
ISSUE:
Whether the reimported batteries will be eligible for treatment under subheading 9802.00.50, HTSUS, subheading 9801.00.10, HTSUS, or subheading 9801.00.20, HTSUS?
LAW AND ANALYSIS:
Subheading 9802.00.50
Subheading 9802.00.50, HTSUS, provides a partial or full duty exemption for articles returned to the United States after having been exported to be advanced in value or improved in condition by means of a repair or alteration. Duty is assessed only on the cost or value of the repair or alteration abroad, provided that the documentary requirements of section 181.64, CBP Regulations (19 CFR § 181.64) are met.
As indicated above, for subheading 9802.00.50, HTSUS to apply, the articles must be advanced in value or improved in condition by repair or alteration. It has long been, and continues to be, the position of CBP that the packaging of articles does not advance their value or improve their condition. See, for example, United States v. John V. Carr & Sons, Inc., 69 Cust. Ct. 78, 347 F. Supp. 1390 (1972), aff’d 61 CCPA 52, 496 F.2d 1225 (1974) and HQ 556406, dated March 16, 1992. Further, the packaging of articles is not a repair or alteration. Therefore, we find that the packaging of the batteries in Canada is not an operation which will result in the batteries being eligible for treatment under subheading 9802.00.50, HTSUS, upon their reimportation into the United States.
Subheading 9801.00.20
Subheading 9801.00.20, HTSUS, provides for duty-free treatment for:
Articles, 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.
You state that Energizer will be the owner of the batteries and that it will ship them to Canada for packaging. The mere packaging of goods is not an advancement in value or improvement in condition. See United States v. John V. Carr & Sons, Inc., supra. Provided Energizer is both the exporter and the “reimporter” of the batteries, the remaining issue with respect to the applicability of subheading 9801.00.20, HTSUS is whether the batteries will be “exported under lease or similar use agreements.” They clearly will not be exported under lease. In HQ 560511, dated November 18, 1997, CBP held that bibs owned by Gerber and exported by it to another company in the Dominican Republic where they were packaged with underwear for retail sale were exported under a “similar use agreement” within the meaning of subheading 9801.00.20, HTSUS. Based upon that precedent, we find that the exportation of the subject batteries owned by Energizer for packaging will constitute a “similar use agreement” within the meaning of subheading 9801.00.20, HTSUS. Accordingly, the batteries will be eligible for treatment under subheading 9801.00.20, HTSUS, upon their reimportation into the United States after packaging in Canada for retail sale, provided that Energizer is the exporter and “reimporter” of the batteries and provided that the factual requirements of this provision are established to the satisfaction of the port director where entry is made. See 19 CFR § 10.108.
HOLDINGS:
The subject batteries will not be eligible for treatment under subheading 9802.00.50, HTSUS.
The subject batteries will be eligible for treatment under subheading 9801.00.20, HTSUS, provided that Energizer is the exporter and “reimporter” of the batteries and provided that the factual requirements of this provision are established to the satisfaction of the port director where entry is made.
A copy of this ruling letter should be attached to the entry documents filed at the time the subject goods are entered. If the documents have been filed without a copy, this ruling letter should be brought to the attention of CBP.
Sincerely,
Monika R. Brenner
Chief
Valuation & Special Programs Branch