CLA-2 CO:R:C:V 555530 KAC
Mr. David Y. Berry
Viking Industrial Corporation
620 Clark Avenue
Pittsburg, California 94565
RE: Applicability of partial duty exemption under HTSUS
subheading 9802.00.60 to black plate steel coils processed
in Guatemala or Costa Rica
Dear Mr. Berry:
This is in response to your letter of November 21, 1989,
requesting a ruling on the applicability of subheading
9802.00.60, Harmonized Tariff Schedule of the United States
(HTSUS) (formerly item 806.30, Tariff Schedules of the United
States) (TSUS)), to black plate steel coils imported from
Guatemala or Costa Rica following processing.
FACTS:
Viking will ship U.S.-manufactured black plate steel coils
to Guatemala or Costa Rica. The coils range in thickness from
0.008 to 0.0160 inch, and in width from 28 to 48 inches. In
Guatemala or Costa Rica, the coils will be uncoiled, galvanized,
recoiled, and returned to the U.S. The galvanizing process
entails chemical cleaning, hot-dipped zinc coating (galvanizing),
cooling, and chromating. The zinc coating will be a G-60
designation as per the American Society for Testing Materials
(ASTM) A525-83 specification (0.06 ounce per square foot, mean
both sides, adding 0.00102 inch to total sheet thickness in the
galvanizing process). The additional thickness of the zinc
coating is the only dimensional change of the coils. There is no
other metallurgical change to the material.
Upon return to the U.S., the coils will be slit into
narrower coils or cut into sheets. The coils will be used for
numerous applications, including punched, stamped, roll-formed,
and corrugated parts used in heating, cooling, plumbing,
construction, appliance, automotive, and agricultural industries.
ISSUE:
Whether the black plate steel coils will be eligible for the
partial duty exemption available under HTSUS subheading
9802.00.60 when returned to the U.S.
LAW & ANALYSIS:
HTSUS subheading 9802.00.60 provides a partial duty
exemption for:
[a]ny article of metal (as defined in U.S. note 3(d) of this
subchapter) manufactured in the United States or subject to
a process of manufacture in the United States, if exported
for further processing, and if the exported article as
processed outside the United States, or the article which
results from the processing outside the United States, is
returned to the United States for further processing.
This tariff provision imposes a dual "further processing"
requirement on eligible articles of metal--one foreign, and when
returned, one domestic. Metal articles satisfying these
statutory requirements may be classified under this tariff
provision with duty only on the value of such processing
performed outside the U.S., provided there is compliance with the
documentary requirements of section 10.9, Customs Regulations (19
CFR 10.9).
In C.S.D. 84-49, 18 Cust.Bull. 957 (1983) we stated that:
[f]or purposes of item 806.30, TSUS, the term 'further
processing' has reference to processing that changes the
shape of the metal or imparts new and different
characteristics which become an integral part of the metal
itself and which did not exist in the metal before
processing; thus, further processing includes machining,
grinding, drilling, threading, punching, forming, plating,
and the like, but does not include painting or the mere
assembly of finished parts by bolting, welding, etc.
In the instant case, the steel coil is an eligible article
of metal for purposes of HTSUS subheading 9802.00.60. The
galvanizing operation performed in Guatemala or Costa Rica is
considered a "further processing" operation, as it changes the
metal and imparts new and different characteristics which becomes
an integral part of the metal. See, Headquarters Ruling Letter
553860 dated October 22, 1985, which held that electroplating
with nickel, brass, or chrome is an operation sufficient to
comply with the "further processing" requirement of TSUS item
806.30. Moreover, the cutting and slitting of the returned steel
in the U.S. are considered sufficient processes which comply with
the "further processing" requirement for the domestic segment of
HTSUS subheading 9802.00.60. See, Headquarters Ruling Letters
553950 dated December 13, 1985, and 063601 dated April 18, 1980
(cutting and slitting for final fabrication constitutes further
processing).
HOLDING:
On the basis of the information submitted, it is our opinion
that the processes performed abroad and the U.S. processes
constitute "further processing" as that term is used in HTSUS
subheading 9802.00.60, and, therefore, the imported galvanized
steel coils will be entitled to classification under this tariff
provision, upon compliance with 19 CFR 10.9.
Sincerely,
John Durant, Director
Commercial Rulings Division