CLA-2 CO:R:C:S 557294 MLR
District Director
U.S. Customs Service
P.O. Box 619050
1205 Royal Lane
Dallas/Fort Worth, TX 75261
RE: Applicability for Further Review of Protest No. 5501-92-
100369; Denial of partial duty exemption under HTSUS
subheading 9802.00.40 to a multi-parameter indicator;
documentation; 19 CFR 10.8
Dear Sir/Madam:
This is in reference to a protest and application for
further review filed by I.C.E. Co., Inc. ("I.C.E.") on behalf of
Bell Helicopter Textron Inc. ("Bell"), contesting the denial of
the partial duty exemption under subheading 9802.00.40,
Harmonized Tariff Schedule of the United States (HTSUS), to a
multi-parameter indicator ("indicator").
FACTS:
The record reflects that Bell imported an indicator from
Canada on December 18, 1990, and filed entry no. 153-00355631 on
December 21, 1990, seeking a duty exemption under subheading
9808.00.30, HTSUS. Because the Defense Contract Administration
Services Region, New York (DCASR-NY) Defense Logistic Agency
denied the duty-free entry certification, I.C.E. notified the
District Director in Irving, Texas, of this fact in a letter
dated September 11, 1991, and changed the claim on the entry to
the partial duty exemption under subheading 9802.00.40, HTSUS.
The letter also states that a Repair Declaration issued by
Canadian Marconi, Company, was being submitted, and that I.C.E.
should be notified if further documentation is required. (The
record submitted to our office did not contain the Repair
Declaration). However, the entry was liquidated on August 28,
1992, under subheading 9031.80.00, HTSUS, because the proper
documentation required for subheading 9802.00.40, HTSUS,
treatment was not provided. The Customs Protest and Summons
Information Report indicates that the documentation is required
by section 10.24, Customs Regulations (19 CFR 10.24). This
protest, filed October 13, 1992, followed.
Our office contacted I.C.E., who provided the Repair
Declaration prepared by Canadian Marconi Co. acknowledging
receipt of the indicator for the purpose of repairs, and
attesting that no substitution of the exported merchandise was
made. I.C.E. has also informed our office that the export
shipping documents are in Bell's "dead" storage and that getting
this information and a description from Canadian Marconi Co. of
the repairs conducted is not economically feasible at this time.
ISSUE:
Whether the multi-parameter indicator imported into the U.S.
is entitled to the partial duty exemption under subheading
9802.00.40, HTSUS.
LAW AND ANALYSIS:
Subheading 9802.00.40, HTSUS, provides a partial duty
exemption to articles returned to the U.S. after having been
exported to be advanced in value or improved in condition by
repairs or alterations. Such articles are dutiable only upon the
value of the foreign repairs or alterations, provided the
documentary requirements of section 10.8, Customs Regulations (19
CFR 10.8) (not 19 CFR 10.24), are satisfied.
The duty exemption provided under subheading 9802.00.40,
HTSUS, is a privilege, and it is well settled that compliance
with mandatory regulations is a condition precedent to recovery
and that the burden of proof thereof rests on the protestant.
See F.W. Myers & Co., v. United States, C.D. 4515, 72 Cust. Ct.
133, 374 F. Supp. 1395 (1974); H.F. Keeler v. United States, C.D.
1842, 38 Cust. Ct. 48 (1957); and Pacific Customs Brokerage Co.
v. United States, T.D. 48887, 71 Treas. Dec. 530 (1937).
In 1972, the regulations applicable to repaired/altered
merchandise were revised. T.D. 72-119, 6 Cust. Bull. 209. These
regulations, published at 19 CFR 10.8, provide that there shall
be filed: (1) prior to exportation of the articles to be
repaired or altered, a Certificate of Registration (Customs From
4455) to permit the district director to examine such articles
before they are exported; and (2) in connection with an entry, a
repair declaration from the person who performed the repairs or
alteration in substantially the form set forth at subsection (e),
the Certificate of Registration, and a declaration, made by the
owner, importer, consignee, or agent having knowledge of the
facts, that the articles entered in their repaired or altered
condition are the same articles covered by the Certificate of
Registration. The information sought by the documentary
requirements of 19 CFR 10.8 is designed to enable Customs to
verify that the articles returned are the same as the articles
exported and that they were repaired/altered within the meaning
of subheading 9802.00.40, HTSUS. Thus, compliance with these
documentary requirements is essential to establish the identity
of the articles returned and their eligibility for the partial
duty exemption provided.
The form the required Repair Declaration is to follow
embraces two broad elements: (1) it requires identifying
information from the person performing the repairs in the format
of a recital containing five substantive clauses; and (2) it
requires the person performing the repairs to provide information
concerning the nature of the repairs effected and the identity of
the articles repaired based on personal observation. The
descriptive information required is more detailed than the
information required on a Customs Form 4455, as it requires
identification marks and numbers, where available, in addition to
a general description of the merchandise which is common to both
forms.
In Headquarters Ruling Letter (HRL) 555413 dated September
5, 1990, subheading 9802.00.40, HTSUS, treatment to certain
phones was denied because the protestant did not adequately
comply with the documentary requirements of 19 CFR 10.8. One of
the reasons for the denial was because the Repair Declaration
provided did not describe the nature of the repairs performed,
nor did it describe the identity of the phones other than by
stating the number of units and cartons in the shipment. The
other reason for denying the protest was because when Customs
questioned the protestant whether the phones had serial numbers,
the protestant responded that only two phone models had serial
numbers; however, after examining the shipment, it was discovered
that another phone model, not mentioned by the protestant, was
found with serial numbers.
As in HRL 555413, the Repair Declaration submitted in this
case does not describe the nature of the repairs performed.
However, subsections (i), (j), and (k) of section 10.8, Customs
Regulations {19 CFR 10.8(i), (j), and (k)} do provide for the
waiver of certain documents by the district director. These
provisions are not applicable in this case. Subsection (i) does
not apply because, even if the declarations provided for in
subsections (e) and (f) are waived, the registration requirements
of subsection (a) were not met. Subsection (j) does not apply
because the registration requirements were not met; consequently
the production of Customs Form 4455 may not be waived. Lastly,
subsection (k) does not apply because the registration
requirements were not met, and no other documentation has been
presented to prove the actual exportation of the indicator.
Under these circumstances, we believe that the protestant has
failed to adequately comply with the documentary requirements of
19 CFR 10.8.
HOLDING:
On the basis of the information submitted, we find that the
protestant has failed to adequately comply with the documentary
requirements of 19 CFR 10.8 so as to establish that the indicator
imported is the same as that exported. Therefore, the indicator
is not entitled to subheading 9802.00.40, HTSUS, treatment.
Accordingly, this protest should be denied. A copy of this
decision should be attached to the Form 19, Notice of Action, to
be sent to the protestant.
Sincerely,
John Durant, Director
Commercial Rulings Division