CLA-2 CO:R:C:S 556123 SER
Mr. Thomas F. Murphy
CBI Services, Inc.
St. George Road
Bourbannais, Il 60914-9799
RE: Applicability of HTSUSA subheading 9802.00.60 to steel
plates subjected to cutting, bending, beveling, and
trimming; C.S.D. 84-49, HRL 555620
Dear Mr. Murphy:
This is in reference to your letter of May 23, 1991,
concerning the applicability of subheading 9802.00.60, Harmonized
Tariff Schedule of the United States Annotated (HTSUSA), to
certain steel plates to be imported from Canada.
FACTS:
CBI Services, Inc. will purchase U.S.-manufactured steel
plates, ultimately to be used for waste treatment facilities.
The steel will be in sizes of up to 10 feet wide and 35 feet
long, ranging in thickness from 3/16 inches to 2 3/4 inches. The
plates will be exported to Canada where they will be cut to
various sizes and formed to spherical, conical and cylindrical
shapes. They are then burned to exact sizes and the edges are
beveled to allow the plates to be welded together.
The plates are then returned to the U.S. and delivered to a
construction site where blank nuts are welded to the plates in
addition to other "fit-up gadgets". The plates are then bent,
formed and trimmed (if necessary) to the specifications needed
for the waste treatment tanks. After the basic tank is welded
together the plates are then processed for nozzles and manholes.
Holes are burned into the plates and are then beveled to allow
welding of the manholes and nozzles to the plates. Anchor bolts
will then be attached to the plates to anchor the tanks to
foundations, and studs will be welded to some of the plates for
anchorage to the foundation wall.
Stairway platforms and walkways will be welded to the
plates, and piping will be bolted to the nozzles. The tank
plates will then be sand blasted to remove scale and rust, and
the outside of the tank will be insulated and painted.n-2-
ISSUE:
Whether the steel plates will be eligible for the partial
duty exemption available under subheading 9802.00.60, HTSUSA,
when imported into the U.S.
LAW AND ANALYSIS:
Subheading 9802.00.60, HTSUSA, 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 of 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 [precursor to
9802.00.60 HTSUSA], 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 this case, the steel plates are eligible articles of
metal for purposes of subheading 9802.00.60, HTSUSA. In
addition, the cutting and forming operations in Canada are
considered "further processing" under this tariff provision. In
Headquarters Ruling Letter (HRL) 555620 dated August 3, 1990, we
held that performing cutting and bending operations on stainless
steel articles constitutes a further processing operation
pursuant to subheading 9802.00.60, HTSUSA. In addition, the
forming operations in Canada clearly fall within the processing
operations discussed in C.S.D. 84-49, which enumerates forming as
an example of further processing.n
-3-
Furthermore, to the extent that all of the returned steel
plates will be subjected to one or more of the following
operations in the U.S.: bending, forming, trimming, and burning
of holes, we find that the plates comply with the domestic
"further processing" requirement of subheading 9802.00.60,
HTSUSA, under C.S.D. 84-49.
HOLDING:
On the basis of the information submitted, it is our opinion
that the processes performed abroad and upon return of the steel
to the U.S. constitute "further processing" as that term is used
in subheading 9802.00.60, HTSUSA. Therefore, the imported steel
plates will be entitled to classification under this tariff
provision with duty only on the cost or value of such processing
performed outside the U.S., upon compliance with the documentary
requirements of 19 CFR 10.9.
Sincerely,
John Durant, Director