OT:RR:CTF:VS H175426 BGK
Port Director
U.S. Customs and Border Protection
237 West Service Road
Champlain, NY 12919
Re: Applications for Further Review of Protest Nos. 0712-11-100112 and 0712-11-100128; Subheading 9801.00.10, HTSUS
Dear Port Director:
This is in response to the Applications for Further Review of Protest Nos. 0712-11-100112 and 0712-11-100128, filed on behalf of First American Resources Co. LLC (First American Resources), which pertain to the eligibility of cutting tools and their associated parts and accessories for duty-free treatment under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS). Both entries liquidated on December 10, 2010, and we note that the protests were timely filed.
FACTS:
This protest covers two entries of the same merchandise. It is claimed that the merchandise was originally exported from the U.S. by Arrowhead Industries Corporation (Arrowhead Industries) to Arrowhead Industries Canada (Arrowhead Canada) (now ACP-Canada) between 2002 and 2008. It is also claimed that the same goods were subsequently imported into the U.S. for trial production runs at a facility in the U.S. as part of the first entry on September 13, 2010. The merchandise was sent back to Canada on September 21, 2010 and imported the second time on December 23, 2010.
These entries consisted of:
two (2) tool cutters
twelve (12) roll tools
six (6) roll stands
five (5) guide support tables
four (4) metal guides, and
four (4) plastic nyloil guides.
The goods were entered under subheading 9801.00.1095, HTSUS, in both entries. U.S. Customs and Border Protection (CBP) issued a CBP Form (CF) 28 on September 28, 2010 requesting, among other things, “An American Manufacturer’s Affidavit from the ACTUAL MANUFACTURER OF THE MERCHANDISE.” On November 22, 2010, CBP issued a CF 29 stating that the goods were rate advanced because, per a response from the importer, the merchandise was not U.S. goods returned, and therefore, subheading 9801.00.10, HTSUS, was not applicable.
In their protests, the importer states that in a follow-up phone call to the CF 28, an employee of First American Resources provided incorrect information regarding the origin of the goods to the Customs officer. It is stated that the employee did not realize the shipment contained U.S. and Canadian goods, and replied that the goods were Canadian because that was the country of export. ACP-Canada claims that all the merchandise at issue was manufactured by Arrowhead Industries in Cleveland, Ohio, except the roll stands, which were fabricated by another manufacturer in Pennsylvania and shipped to Arrowhead Industries. No documentation was provided to support this claim.
In support of their claims, the importer has submitted the following documentation for the merchandise at issue:
An invoice from ACP Canada to First American Resources, dated September 10, 2010, (corresponding to the first entry). The invoice appears to be priced in Canadian dollars (“$CDN”). The invoice lists, among other merchandise stated to be Canadian in origin, two (2) tool cutters, twelve (12) roll tools, six (6) roll stands, five (5) guide support tools, four (4) metal guides, and four (4) plastic nyloil guides.
An invoice from ACP Canada to First American Resources, dated October 21, 2010, (corresponding to the second entry). This entry lists the same merchandise as the first, along with the same values.
An Importer’s Declaration, dated March 23, 2011, stating that the merchandise was manufactured by Arrowhead Industries, the articles were not produced under subheading 9813.00.05, HTSUS, and the articles were exported from the U.S. without benefit of drawback.
An Exporter’s Declaration, dated March 2, 2011, stating that twelve (12) roll tools were exported on February 28, 2004 and were being temporarily returned without having been advanced in value or improved in condition.
An invoice from Arrowhead Industries to Arrowhead Canada, dated February 28, 2004, for, among other things, six (6) “Flat Rolls.”
An Exporter’s Declaration, dated March 2, 2011, stating that two (2) cutter tools (one T15 and one W27) were exported on February 28, 2008 and were being temporarily returned without having been advanced in value or improved in condition.
An invoice from Arrowhead Industries to Arrowhead Canada, dated February 28, 2008, for four “New Cutters”, including the two specified in the Exporter’s Declaration. This invoice states “MADE IN THE U.S.A.” at the bottom.
An Exporter’s Declaration, dated March 2, 2011, stating that three (3) roll stands were exported on March 20, 2006 and were being temporarily returned without having been advanced in value or improved in condition.
An invoice from Arrowhead Industries to Arrowhead Canada, dated March 20, 2006, for two (2) Roll Stands and one (1) Cutter Stand. The value given for the two roll stands is different on the invoice than it is in the Exporter’s Declaration. The invoice states “MADE IN THE U.S.A.” at the bottom.
An Exporter’s Declaration, dated March 2, 2011, stating that four (4) plastic nyloil guides, four (4) metal guides, five (5) guide support tables, and one (1) variety of roll shims were exported in November 2002 and were being temporarily returned without having been advanced in value or improved in condition. No invoice was provided for these items.
A bill of lading, dated September 21, 2010, from First American Resources to ACP Canada for “3 Wooden Boxes of Tools.”
A delivery receipt for the shipment from First American Resources to ACP Canada, dated September 24, 2010.
A bill of lading, dated November 3, 2010, from First American Resources to ACP Canada for three crates of tools.
A delivery receipt for the shipment from First American Resources to ACP Canada, dated November 8, 2010.
ISSUE:
Whether the merchandise at issue is eligible for duty-free tariff treatment under subheading 9801.00.10, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUS, provides for the free entry of products of the United States that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 C.F.R. § 10.1), are met.
Section 10.1(a), Customs Regulations (19 C.F.R. § 10.1(a)) provides in part that a declaration by the foreign shipper and a declaration by the owner, importer, consignee, or agent shall be filed in connection with the entry or articles in a shipment valued over $2,000 and claimed to be free under subheading 9801.00.10 or 9801.00.20, HTSUS.
Section 10.1(b), Customs Regulations (19 C.F.R. § 10.1(b)) provides:
In any case in which the value of the returned articles exceeds $2,000 and the articles are not clearly marked with the name and address of the U.S. manufacturer, the port director may require, in addition to the declarations required in paragraph (a) of this section, such other documentation or evidence as may be necessary to substantiate the claim for duty-free treatment. Such other documentation or evidence may include a statement from the U.S. manufacturer verifying that the articles were made in the United States, or a U.S. export invoice, bill of lading or airway bill evidencing the U.S. origin of the articles and/or the reason for the exportation of the articles. (Emphasis added).
The Port requested an affidavit from the actual manufacturer of the merchandise through use of a CF 28 and rate advanced and reclassified the merchandise after this was not received. All the items except the roll stands are stated to be manufactured by the original U.S. exporter, Arrowhead Industries, and “MADE IN THE U.S.A.” appears at the bottom of two of the three invoices from Arrowhead Industries to Arrowhead Canada. It does not appear on the bottom of the invoice for six (6) “Flat Rolls”, associated with the Exporter’s Declaration for roll tools, but does appear at the bottom of the invoice from Arrowhead Industries covering the roll stands, which are stated to be manufactured by another company in Pennsylvania, who First American Resources has not submitted any documentation for.
It is clear from the regulatory language of 19 C.F.R. § 10.1 that in certain circumstances (where the value of the returned articles exceeds $2,000 and the articles are not clearly marked with the name and address of the U.S. manufacturer), the Port Director may require additional information to substantiate a subheading 9801.00.10, HTSUS, claim. See 19 C.F.R. § 10.1(b).
Previous rulings, including Headquarters Ruling Letter (HRL) H007668, dated June 20, 2009, and HRL 563132, dated January 13, 2005, have allowed the Port Director to accept other proofs of origin presented by the manufacturer in place of a manufacturer’s affidavit, provided the Port Director is reasonably satisfied that the evidence substantiates the importer’s claim that certain goods are products of the U.S.
Plastic Guides (4), Metal Guides (4), Guide Support Tables (5)
In this case, although “MADE IN THE U.S.A.” written on an invoice from the manufacturer at the time of export may be an acceptable substitute for a Manufacturer’s Affidavit in some cases, no invoices were provided for the plastic guides, the metal guides, or the guide support tables. There was also no statement from the manufacturer as to the origin on any other document with relation to these parts. As the Port is allowed to request a Manufacturer’s Affidavit under 19 C.F.R. § 10.1(b), and none was provided, the plastic guides, the metal guides, and the guide support tables are not eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
Roll Tools (12)
The invoice for the roll tools states that only six “flat rolls” were exported to Canada, but twelve roll tools were imported into the U.S. Additionally, this invoice does not state that the goods were made in the U.S. Therefore, not only does the description on the Arrowhead Industries invoice not match the description on the ACP Canada invoice, even if the goods are the same, more roll tools were imported into the U.S. than were exported from the U.S. There is also no statement as to the origin of the roll tools provided by the manufacturer, as requested by the Port. As such, the roll tools are not eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
Roll Stands (6)
The invoice for the roll stands from Arrowhead Industries to Arrowhead Canada is only for two roll stands, but six roll stands were imported into the U.S. Additionally, although this invoice does state “MADE IN THE U.S.A.,” Arrowhead Industries is stated not be the manufacturer. As such, more roll stands were imported into the U.S. than exported from the U.S. There is also no statement as to origin from the manufacturer, as requested; therefore, the roll stands are not eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
Cutter Tools (2)
Two cutter tools were imported into the U.S. in both entries. There is an Exporter’s Declaration for the two cutter tools, specifying the particular models, and a corresponding invoice from the original U.S. exporter to the original Canadian purchaser, also specifying the particular models. The corresponding invoice states “MADE IN THE U.S.A.” at the bottom, and was sent from the U.S. manufacturer. As such, it may represent an acceptable substitute for the manufacturer’s affidavit under 19 C.F.R. § 10.1(b) in this situation. The invoice is for specific models of articles manufactured by the U.S. exporter, states the origin of the articles exported, the date the goods were sold for exportation, and the party to whom the goods were exported. In this case, the goods were sent to the company in Canada that is now exporting them back to the U.S. and can identify the particular model being exported. Therefore, it is our opinion that these invoices, notated “MADE IN THE U.S.A.”, by the manufacturer at the time of export to the party currently exporting the merchandise back to the U.S. may be an acceptable substitute for a manufacturer’s affidavit in this particular instance, provided the Port Director is reasonably satisfied that the invoice substantiates the importer’s claim that the goods are a product of the United States. In this case, the invoice for the two cutter tools came from the actual manufacturer and contains sufficient information to be considered a substitute for a manufacturer’s affidavit.
HOLDING:
The protest should be granted with respect to the cutting tools, and denied for the remaining merchandise for the above stated reasons.
In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division