CLA-2 CO:R:C:V DSN
Paul E. Linet, Esq.
75 Federal Street, 18th floor
Boston, Massachusetts 02110
RE: GSP Treatment of Incandescent Projection Lamps
Dear Mr. Linet:
This is in response to your letter of April 3, 1989, on
behalf of GTE Products Corporation ("manufacturer"), in which you
request a ruling that certain incandescent projection lamps the
manufacturer produces in Mexico are entitled to duty-free
treatment under the Generalized System of Preferences (GSP)
(19 U.S.C. 2461-2466). Your request for a tariff classification
ruling for the lamps under the Harmonized Tariff Schedule of the
United States (HTSUS) has been referred to the General
Classification Branch, with the request that they respond
directly to you. For purposes of this ruling, we assume that you
are correct in your claim that the lamps are properly classified
under either subheading 8539.22.80 or 8539.29.40, HTSUS. Due to
the length of time this matter has been pending, we determined it
advisable to answer your request based upon the information
provided in your initial submission. If you have any additional
information or legal arguments, you may submit a request for
reconsideration.
FACTS:
You state that the incandescent projection lamps are primary
light sources for several varieties of audio/visual equipment
used for projecting an image onto a viewing surface, such as
moving picture projectors and 35mm slide projectors, and for some
specific general lighting applications.
The manufacturer will produce the projection lamps in
Mexico from 30 separate imported glass and metal components. You
describe the process in two steps: first, the creation of the
mount assembly, and second, converting the mount assembly into a
projection lamp.
The mount assembly is made by the assembly of a stem, coil,
and bridge. The manufacturer produces the stem from a glass rod
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approximately 8 mm in length, moly wires or metal contact pins 4
1/2 mm in length, and a glass ring approximately 2 mm in
diameter. Using specialized glass working equipment, the glass
ring is heated to form a wafer, and four metal pins, to which a
glass bead had been previously placed at each contact point
by a bead machine, are embedded in the wafer, which is then
attached to the glass rod or stem. The wafer-stem is then
annealed in an oven.
The coil, which is made of tungsten, is formed by bending a
jig into a coil shape and subjecting it to a heat treatment. The
bridge is made by imbedding four 2 mm bent wires into a 2 mm
glass rod using "speciality equipment."
The stem, coil, and bridge subassemblies are then assembled
with other imported components into the mount assembly. You
state that with the use of jigs, fixtures and percussive welding
equipment, side rods, support wires, fuse links, leads,
reflectors and bridges, the various components are affixed to the
wafer-stem. The weld joints are then painted with a special
mixture called "getter" to prevent corrosion during the next
processing stage. At this point, you state that the mount
assembly is completed.
The projection lamp is then formed in what you describe as a
three stage operation: blue dipping, bulb-cutting, and lamp
attachment. Blue-dipping involves dipping the closed end of
glass bulbs or "glass envelopes," which will be placed over the
mount assembly, into a mixture of blue ceramic paint and thinner,
drying the dipped bulbs in an oven, and cooling. Bulb-cutting
involves cutting the bulbs to the length required for the
particular lamp type. In the lamp attachment operation, the
wafer stem of the mount assembly is heated, the bulb is placed
over the mount assembly and sealed to the wafer-stem, the
atmosphere within the bulb is evacuated by vacuum pump, and a
metal base is attached to the sealed glass bulb with a heat
activated cement. Some lamp types which require light center
alignment are finished by hand torch soldering techniques. Some
lamp types require a more extensive attachment process, which
involves alignment of the light center by an optical comparator
and hand soldering the bases to maintain this position to meet
light output specifications.
The finished lamps are given an electrical quality test,
then assigned to a packer who relights the lamps electrically,
completes a visual inspection of the product, and hand packs them
for shipment.
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ISSUE:
Whether the mount assemblies, produced as described above
from materials imported into Mexico, are substantially
transformed constituent materials of the incandescent projection
lamps into which they are incorporated for purposes of the GSP.
LAW AND ANALYSIS:
Under the GSP, eligible articles which are imported
directly into the customs territory of the U.S. from a designated
developing beneficiary country (BDC) may receive duty-free
treatment if the sum of 1) the cost or value of materials
produced in the BDC, plus 2) the direct costs of the processing
operation in the BDC, is equivalent to at least 35% of the
appraised value of the article at the time of entry. See 19
U.S.C. 2463(b).
If an article is produced or assembled from materials which
are imported into the BDC, the cost or value of those materials
may be counted toward the 35% value-content minimum only if they
undergo a double substantial transformation in the BDC. See
section 10.177, Customs Regulations (19 CFR 10.177), and Azteca
Milling Co. v. United States, 703 F.Supp. 949 (CIT 1988), aff'd,
Appeal No. 89-320 (Fed. Cir. 1989). That is, the cost or value
of the imported materials used to produce the projection lamps
may be included in the GSP 35% value-content computation only if
they are first substantially transformed into a new and different
article of commerce, which is itself substantially transformed
into the finished lamps.
A substantial transformation occurs "when an article
emerges from a manufacturing process with a name, character, or
use which differs from those of the original material subjected
to the process." See The Torrington Co., v. United States, 764
F.2d 1563, 1568 (Fed. Cir. 1985), citing Texas Instruments
Incorporated v. United States, 681 F.2d 778, 782 (CCPA 1982).
Based upon the information you have provided, it is our
opinion that the materials imported into Mexico have not
undergone the requisite double substantial transformation. While
it appears that production of the mount assembly substantially
transforms the imported materials, it is not clear that finishing
the mount assembly into the projection lamp constitutes a second
substantial transformation. No evidence has been presented that
the mount assembly has any use other than incorporation into the
projection lamp. The processing required to form a projection
lamp from the mount assembly -- encapsulating it within the blue-
dipped bulb, evacuating the atmosphere, and cementing it to a
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base -- does not appear to materially affect the physical
character of the mount assembly. In sum, it appears that the
processing required to form a projection lamp from the mount
assembly is no more than the relatively minor last step
necessary to complete the article for its intended use. Cf. T.D.
86-7, 20 Cust. Bull. 7 (1986).
HOLDING:
On the basis of the information presented, we find that the
mount assemblies produced as described above are not
substantially transformed constituent materials of the projection
lamps into which they are incorporated. Therefore, the cost or
value of the mount assemblies may not be counted toward the GSP
35% value-content minimum.
Sincerely,
John Durant, Director
Commercial Rulings Division