CLA-2 CO:R:C:G 088178 JMH
TARIFF NO.:
District Director
U.S. Customs Service
Patrick V. McNamara Building
Suite 200
477 Michigan Ave
Detroit, MI 48266
RE: Protest and Request for Further Review 3801-0-001700, diesel
engines; actual use
Dear Sir:
The following is our decision regarding the Protest and
Request for Further Review No. 3801-0-001700, dated March 21,
1990.
FACTS:
The subject entries consist of diesel engines manufactured
in England. The engines were properly classified upon entry in
subheading 8408.90.90, Harmonized Tariff Schedule of the United
States Annotated "(HTSUSA"), as "Compressions-ignition internal
combustion piston engines (diesel or semi-diesel engines)...
Other...Other..."
Upon entry the importer posted a proof-of-use bond since
certain articles used in agricultural pursuits are entitled to
duty free entry under headings 9817.00.50, 9817.00.60, HTSUSA. .
The importer hoped that proof-of-use documentation could be
submitted at a later date if the engines were used with
agricultural tractors and that the duty free status could then be
utilized. The bond was posted, according to the importer, to
prevent allegations of fraud in the event that any proof-of-use
documentation ultimately submitted was found to be not
applicable. Furthermore, the importer argues that the bond was
required due to indecision on Custom's part regarding what
constitutes an agricultural tractor.
-2-
The importer requested that liquidation be delayed pending
the submission of agricultural use certification. You have
recommended that the protest be denied in full.
ISSUE:
Whether the posting of a bond for proof-of-use and
subsequent documentation constitutes the necessary intent
required by the actual use provisions, 19 C.F.R. 10.131-139, to
allow duty free entry.
LAW AND ANALYSIS:
Customs Regulations 10.131 through 10.134, 19 C.F.R. 10.131
through 10.139, provide the requirements which must be met when
the rate of duty is dependent upon the actual use of the article
being imported. Customs Regulations 10.133, 19 C.F.R. 10.133,
states three conditions which must be met to receive duty
preferences for actual use. The three conditions are:
(1) Such use is intended at the time of
importation.
(2) The article is so used.
(3) Proof of use is furnished within three
years after the date the article is
entered or withdrawn from warehouse for
consumption.
The intention of use at the time of importation must be
evidenced by a declaration of intent that is filed with the entry
for consumption or for warehouse, or by entering the proper
actual use subheading of the HTSUSA on the entry form. Customs
Regulation 10.134, 19 C.F.R. 10.134. Only when a declaration of
intent has been made in accordance with Customs Regulation
10.134. may the liquidation of an entry be suspended until proof
of use is furnished. See Customs Regulation 10.136, 19 C.F.R.
10.136.
The entries for the subject diesel engines do not meet the
conditions of Customs Regulation 10.133, and therefore, are not
entitled to duty free entry. No intent for using the engines for
agricultural purposes was declared at the time of importation.
The entry documents do not include a declaration of intent for
the engines to be used in agricultural tractors, nor do the
documents contain an actual use classification. Without one of
these declarations made at the time of entry, there is no showing
of intent under the Customs Regulations. The regulations do not
allow the posting of a bond to be evidence of intent. Thus, the
entries of diesel engines fail the first condition of 10.133
that the use is intended at the time of importation.
-3-
Indecision on the part of Customs as to what constitutes an
agricultural tractor should not prevent an importer from
declaring the use of imported products at the time of
importation, providing the use is known at the time of
importation. Since the requisite declaration of intent was not
performed in accord with 10.134, the liquidation of the entry
cannot be suspended until the proof of use is furnished.
HOLDING:
To benefit from the actual use rates of duty an importer
must demonstrate at the time of importation that the use in
question is intended at the time of importation. Such intent is
established by a declaration filed with the entry documents or by
the inclusion of the actual use classification with the entry
documents. The posting of a bond for proof-of-use is not an
allowed method for evidencing the necessary intent at the time of
importation. Since the entries concerning the subject diesel
engines are void of any declaration of intent for the actual use
of the articles, they are prohibited from obtaining the
preferential duty rates.
The protest should be denied in full. A copy of this
decision should be attached to the Form 19 Notice of Action for
the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division