CLA-2 CO:R:C:S 557774 WAS
District Director
U.S. Customs Service
511 N.W. Broadway
Portland, OR 97209
RE: Application for Further Review of Protest No. 2904-93- 100203; eligibility of fans from Thailand for duty-free treatment under the GSP
Dear Sir:
This is in response to your memorandum forwarding an
Application for Further Review of Protest No. 2904-93-100203 made
by K Mart Corporation, concerning the eligibility for duty-free
treatment under the Generalized System of Preferences (GSP) (19
U.S.C. 2461-2466), with respect to fans imported from Thailand.
FACTS:
The protestant claims that the merchandise was originally
imported into the U.S. from Thailand duty-free under the GSP.
However, upon liquidation, protestant states that your office
advanced the rate of duty to 4.7 percent ad valorem because a GSP
Form A and Thailand manufacturer's invoice was not presented at
the time of entry. On May 7, 1993, Customs issued a Request For
Information (CF 28) asking the importer to produce the Thailand
manufacturer's invoice. Subsequently, on July 7, 1993, Customs
issued a Notice of Action (CF 29) proposing to classify the fans
under subheading 8414.51.00, HTSUS, at the duty rate of 4.7
percent ad valorem, as the requested Thailand invoice had not
been submitted by the importer. The entry was liquidated
dutiable at that rate on August 20, 1993. A protest was timely
filed on November 17, 1993.
On June 20, 1994, a telephone conversation took place
between a representative from this office and Mr. Herbert J.
Lynch, counsel for Duracraft Corp., regarding the above-referenced matter. At this time, Mr. Lynch stated that he would
submit a copy of the Thailand manufacturer's invoice that Customs
had requested in the CF 29 dated May 7, 1993. Customs received a
copy of Invoice PNC 034/93, dated February 2, 1993 from PNC
Industrial Co. Ltd. of Thailand to Duracraft Hong Kong Ltd., for
the items sold by Duracraft Hong Kong Ltd. to K-Mart Corp.
(Payless Stores Division) on July 19, 1994. The invoice number
on the Thailand manufacturer's invoice corresponds with the
invoice number referenced on the GSP Certificate of Origin Form A
for this protest. A cost breakdown for the Duracraft stand fan
(DS-1502) ('92-93 season) was also forwarded to this office on
July 19, 1994. Upon receipt, a copy of the Thailand invoice and
cost breakdown information was forwarded to your office on July
19, 1994.
Based on the information submitted by the protestant on July
19, 1994, Mr. J.T. Yoshida, of your office, stated that the
protestant has submitted all of the information requested in
Customs' Request for Information, dated May 7, 1993. Thus, your
office is satisfied that the protestant has met all of the
documentation requirements and the fans are eligible for duty-free treatment under the GSP.
ISSUE:
Whether the fans are eligible for duty-free treatment under
the GSP.
LAW AND ANALYSIS:
Under the GSP, eligible products the growth, product or
manufacture of a designated beneficiary developing country (BDC)
which are imported directly into the U.S. qualify for duty-free
treatment if the sum of (1) the cost or value of the material
produced in a BDC, plus (2) the direct costs involved in
processing the eligible article in the BDC, is not less than 35%
of the appraised value of the article at the time it is entered
into the U.S. See section 101.76(a), Customs Regulations (19 CFR
10.176(a)).
As stated in General Note 3(c)(ii)(A), Harmonized Tariff
Schedule of the United States (HTSUS), the Thailand is a
designated BDC for purposes of the GSP. In addition, it appears
from your description of the merchandise that the product at
issue is classified under subheading 8414.51.00, HTSUS, which
provides for fans. Articles classified under this provision are
eligible for GSP treatment provided, the "product of," 35% value-content and "imported directly" requirements are satisfied.
We have been advised that your office is now satisfied that
the fans subject to Protest No. 2904-93-100203 are entitled to
duty-free treatment under the GSP. We concur. Therefore, this
protest should be granted in full.
HOLDING:
For the reasons set forth above, Protest No. 2904-93-1000203
should be granted in full.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision together with the Customs Form 19,
should be mailed by your office to the protestant no later than
60 days from the date of this letter. Any reliquidation of the
entry in accordance with the decision must be accomplished prior
to mailing of the decision. Sixty days from the date of the
decision the Office of Regulations and Rulings will take steps to
make the decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act and other public
access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division