CLA-2 CO:R:C:S 557096 MLR
District Director
U.S. Customs Service
International & Terrace Sts.
Nogales, Arizona 85621
RE: Application for Further Review of Protest No. 2605-92-
100001; Denial of duty exemption under subheading
9801.00.60, HTSUS, to a camera system exported to Germany
and displayed at a photo show; solely for exhibition
purposes; public
Dear Sir:
This is in reference to a protest and application for
further review filed by Marron Carrel, Inc. (dba Maron Inc.),
which we received on January 19, 1993, contesting the denial of
the duty exemption under subheading 9801.00.60, Harmonized Tariff
Schedule of the United States (HTSUS), to various items which are
part of an electronic imaging camera system.
FACTS:
The items at issue are part of an electronic imaging camera
system which reproduces high-quality photographs from
photographs. The items arrived in Arizona on November 5, 1990,
and entry was made the next day under subheading 9801.00.10,
HTSUS, as American Goods Returned. After the discovery was made
that several components of the system were of foreign origin, and
because these items were packed separately and were not
registered upon exportation, a meeting was held with an employee
of William F. Joffroy, Inc., Customs Brokers for the protestant,
who suggested that the merchandise appeared to be eligible for
duty-free entry under 9801.00.60, HTSUS. Therefore, the
protestant states that the decision was made to make formal entry
on November 27, 1990, with payment of the estimated duties on the
components of foreign origin, and to present a bond pursuant to
19 CFR 10.66(b), pending the receipt of evidence to prove that
the items were exported from the U.S. and the fair was open to
the public. The entry was liquidated on August 2, 1991, and this
protest was filed on October 22, 1991, seeking a full refund of
the estimated duties deposited in the amount of $3799.90.
The protestant alleges that the items were exported for
temporary exhibition at a public trade show and should be
classified under 9801.00.60, HTSUS. Furthermore, although the
items were not registered for temporary exhibition at a public
trade show, the protestant claims that the intent of section
10.66(b), Customs Regulations {19 CFR 10.66(b)}, is to provide
relief to an importer who causes foreign-made exhibition material
to be exported without benefit of registration.
The record contains two Burlington air waybills, #94509925
dated September 18, 1990, and #94509940 dated September 20, 1990,
which indicate that various items were shipped to De Vere Ltd.,
in England (the protestant's European distributor). The air
waybill dated September 18, lists three crates with a shipping
weight of 339 kilos, and references Maron Inc. invoice #25449.
The air waybill dated September 20, lists two crates with a
shipping weight of 210 kilos, references Maron Inc. invoice
#25477, and indicates "Trade show materiel: all equipment will
be returned to country of origin." Maron Inc. invoice #25449
lists various camera equipment under items M170, M600, M400,
MC1600, and M650 (which is a JVC conversion system that includes
a stand #49958, JVC TK7100, 28mm lens, monitor, and copy lites,
and which is the subject of this protest). Maron Inc. invoice
#25477 lists item 400PR, a Nikon camera system that includes a
stand, camera, 80mm, 5 x 7 CL, 5 x 7 CRC, and loop, and which is
also the subject of this protest.
The record also contains a De Vere invoice dated October 16,
1990, which states that "boxes camera equipment as per Maron
invoice 25477" were shipped to Maron Inc. in Arizona. After a
telephone conversation with the Vice President of Marketing and
Technical Support of Maron Inc., requesting information to
confirm that the entire shipment sent to De Vere was returned to
the U.S., we received a facsimile of a copy of the De Vere
invoice supplied by your office, except that the invoice also
indicates that "boxes camera equipment as per Maron invoice
25449" were shipped to Arizona. An air waybill dated November 2,
1990, indicates the shipment of two crates with a total weight of
185 kilos from England to Arizona. Two Nikon Inc. invoices dated
February 23, 1988, and June 18, 1990, are presented which
indicate that a 28mm lens and an 80mm lens, respectively, were
shipped to the protestant.
The protestant states that it shared an exhibition booth
with De Vere at "Photokina Weltmesse des Bildes" (World Fair for
Imaging Systems), which was held in Cologne, Germany, from
October 3-9, 1990. The protestant submits the Photokina visitor
information book as proof to show that its camera system was
exhibited at a public fair. The information book lists De Vere
Ltd. as a booth holder located in Hall 12.1, Aisle B, Stand 30.
The book states that tickets for the fair may be purchased in
advance for DM25 (German Marks), and at the Ticket Office for
DM30; these tickets admit "trade" visitors to Halls 1-14. The
book also indicates that "Hobby Tickets" are available at the
ticket office for DM15, which admits visitors to Halls 1-9 and
11. Halls 1-9 and 11 contained the "amateur product range" of
photo, film, and video/audio items, while Halls 12-14 contained
"Professional media (Professional sound and image communication),
Photofinishing (equipment, systems and materials)." A copy of a
page in the September 1990 issue of "Photomethods" magazine is
presented announcing the fair. The record also contains a letter
dated June 24, 1991, from the German Chamber of Industry &
Commerce stating that the exhibition was open to the public.
ISSUE:
Whether the camera system displayed at a photo show abroad
is eligible for duty-free treatment under subheading 9801.00.60,
HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.60, HTSUS, provides for the free entry of
articles which are returned after having been exported for
temporary use abroad solely for exhibition or use in connection
with any public exposition, fair, or conference, provided such
articles are returned by or for the account of the person who
exported them.
In connection with the entry of articles exported for
temporary exhibition and returned and claimed to be exempt from
duty under subheading 9801.00.60, HTSUS, a certificate of
exportation on Customs Form 3311, and a declaration of the
importer on Customs Form 4455 for articles of either domestic or
foreign origin are required. 19 CFR 10.66(a)(1) and (2).
However, if it is shown to be impracticable to produce the
certificate of exportation, the district director may accept
other satisfactory evidence of exportation, or may take a bond on
Customs Form 301 to secure the production of such certificate or
other evidence. 19 CFR 10.66(b).
With regard to the requirement that the returned articles be
exported solely for exhibition or use at a public fair, in
Headquarters Ruling Letter (HRL) 221961 dated May 15, 1990, the
issue was whether gemstones, which were exported for exhibition
at the Hong Kong Watch and Jewelry Fair and returned to the U.S.,
were eligible for subheading 9801.00.60, HTSUS, treatment,
because orders were solicited during the fair. It was stated
that the controlling factor that Customs will focus on in
determining the applicability of subheading 9801.00.60, HTSUS, is
the intention of the exporter at the time of exportation, and
that compliance with the provision of subheading 9801.00.60,
HTSUS, requires that no commercial venture (i.e, sale of goods)
be contemplated at the time of exportation. However, a sale
which is incidental to the showing at an exhibition, fair, or
conference (i.e., when an exporter at the exposition or fair is
prevailed upon to sell some of his wares) will not preclude the
applicability of subheading 9801.00.60, HTSUS, to the remaining
merchandise. Therefore, it was held that the exporter's
acquisition of future orders did not violate the general
prohibition of subheading 9801.00.60, HTSUS, against sales at the
exposition when the primary intention was for exhibition and the
exported articles were returned to the U.S.
The decision in HRL 221961 was based upon HRL 058569 dated
December 8, 1978, which held that a sale of some of the articles
exported for the purposes of item 802.30, Tariff Schedules of the
United States (TSUS) (now subheading 9801.00.60, HTSUS), would
not preclude the remaining articles from free entry under that
provision when returned to the U.S. The analysis in HRL 221961
also discussed the history of subheading 9801.00.60, HTSUS.
Subheading 9801.00.60, HTSUS, and item 802.30, TSUS, are based
upon 19 U.S.C. 194 which contained no words prohibiting a sale.
In 1962, when certain free entry provisions were consolidated
(i.e., items 802.10, 802.20, and 802.30, TSUS) under one superior
heading in Subpart 1A, Schedule 8, TSUS and the word "solely" was
added to the heading immediately preceding the three
aforementioned items, although a sale was prohibited under the
predecessor provision to item 802.10 (formerly paragraph 1815,
Tariff Act of 1930, as amended) TSUS, the 1960 Tariff Study
stated that the consolidation was not to effect any significant
change.
In the instant case, based upon the two Burlington air
waybills and the Maron invoices #25449 and #25477 that were
attached to each air waybill, it is clear that all of the items
the subject of this protest (i.e., the JVC conversion system and
the Nikon camera system), as well as other camera equipment
listed on invoice #25449, were shipped from the U.S. to England.
However, the protestant only returned the JVC conversion system
and the Nikon camera system. Based upon the evidence presented,
with the exception of the camera equipment listed under item M650
(JVC conversion system), all of the other camera equipment listed
on Maron invoice #25449 (i.e., items M170, M600, M400, and
MC1600) were not returned to the U.S.
Although the Maron invoices #25449 and #25477 which were
attached to the Burlington air waybills, both state that the
items were for the Photokina show, only the Burlington air
waybill #94509940 dated September 20 (referencing the Nikon
camera system), indicates that the items shipped abroad would be
returned to the U.S. It is therefore our opinion that only the
items which are listed on Maron invoice #25477 which was attached
to the Burlington air waybill #94509940 dated September 20, 1990,
(i.e., the Nikon camera system, consisting of a stand, camera
430004, 80mm 690454, 5 x 7 CL 49969, 5 x 7 CRC 89141, and loop
49968) were sent to the Photokina show solely for exhibition
purposes. [We note that the stand, 5 x 7 CL 49969, 5 x 7 CRC
89141, and loop 49968 were already accorded duty-free treatment
as American Goods Returned.] With regard to the camera equipment
items listed as M650 on Maron invoice #25449 that are a part of
the JVC conversion system (i.e., stand #49958, JVC TK7100, 28mm
lens, monitor, and copy lites), although these items were
returned to the U.S., because the Burlington air waybill
#94509925 dated September 18, 1990, did not indicate that the
camera equipment would be returned and, in fact, some of the
equipment did not return, this is indicative that the JVC
conversion system was not exported solely for exhibition purposes
as required under subheading 9801.00.60, HTSUS.
The next issue we must address is whether the Nikon camera
system was exhibited at a public exposition, fair, or conference.
In C.S.D. 92-23 (HRL 556092 dated October 22, 1991) fur goods
were exported to Canada from the U.S. for display at an annual
"fur show", for the purpose of soliciting sale orders from
attendees. Admission to the show was not restricted to members
of a private trade association; however, only someone with a
reasonable business interest in attending the show was permitted
to attend. The show was advertised through trade or professional
journals, and through invitations or letters sent to prospective
attendees. Preregistration was required because of space
limitations, and no items were actually sold and delivered at the
show. It was held that a fair or conference may be considered
"public" so long as it does not deny admission, for reasons other
than space limitation, to persons who have a reasonable business
interest in attending the event. Therefore, the returned fur
goods were determined to be eligible for duty-free treatment
under subheading 9801.00.60, HTSUS.
In HRL 067426 dated December 8, 1981, medical equipment was
exported to Canada for exhibition and demonstration at a joint
meeting of the International Society of Hematology and the
International Society of Blood Transfusion. The meeting was open
only to members of these two societies. Therefore, it was not
found to be a "public" conference within the meaning of item
802.30, TSUS. Furthermore, in HRL 222792 dated January 10, 1991,
which reconsidered HRL 221961 dated May 15, 1990, although a Hong
Kong watch and jewelry fair was allegedly open only to members of
the watch and jewelry trades, no indication was found that the
fair excluded the general public; therefore, the jewelry and
gemstones exported for exhibition at the fair and returned to the
U.S were eligible for the duty treatment provided under
9801.00.60, HTSUS.
In this case, the evidence presented indicates that
Photokina was a "public" fair within the meaning of subheading
9801.00.60, HTSUS. As in HRL 222792, although the De Vere booth
was located in a Hall that was open only to visitors with a
"trade" ticket which allowed access to all of the 14 Halls, there
is no indication in the visitor's information book that the
general public was prohibited from purchasing such a ticket. As
in C.S.D. 92-23, Photokina was advertised in a magazine which
serves various industries and businesses. Furthermore, the
letter from the German Chamber of Industry and Commerce indicates
that Photokina is a fair held every two years in Cologne,
Germany, and that it is open to the public. During the October
3-9, 1990, fair, it is stated that 164,747 visitors attended,
33.5 percent of which were private visitors.
HOLDING:
Based on the information submitted, we find that only the
camera equipment items which are a part of the Nikon camera
system (i.e., stand, camera, 80mm, 5 x 7 CL, 5 x 7 CRC, and
loop), are eligible for duty-free treatment under subheading
9801.00.60, HTSUS. It appears that adequate documentation has
been presented to establish that these items were exported from
the U.S. solely for exhibition purposes at a "public" fair as
required by subheading 9801.00.60, HTSUS. Accordingly, the
protest should be granted and denied in part. A copy of this
decision should be attached to Customs Form 19, Notice of Action,
to be sent to the protestant.
Sincerely,
John Durant, Director