CLA-2 CO:R:C:S 558877 DLD
District Director of Customs
555 Battery Street
San Francisco, CA 94111
RE: Decision on Application for Further Review of Protest No.
2809-94-101264. Subheading 9810.00.60 (HTSUS); Duty Free
Treatment of Scientific Instruments.
Dear Sir:
This is in reference to the protest that was filed against
your decision in the liquidation as dutiable of a transmission
electron microscope (TEM) imported by the Georgia Institute of
Technology (Georgia Tech).
The Georgia Institute of Technology purchased a transmission
electron microscope from Hitachi Ltd. Of Japan on March 2, 1993.
On April 16, 1993, Dr. Garth B. Freeman applied to Customs
Headquarters for duty-free entry under subheading 9810.00.60 of
the Harmonized Tariff Schedule of the United States (HTSUS).
In answer to application question 7.c. pertaining to
commercial use of the instrument, the response was in part:
Research Description: A characterization program was
established within GTRI [Georgia Tech Research Institute] in
the late 1940's, primarily to provide analytical support to
state and regional industry. This cost-recovery project
continues as an important effort, serving both Georgia Tech
research and regional industrial research programs.
Emphasis on industrial interactions is placed on unusual or
difficult analyses for which industrial research facilities
are not equipped.
Accordingly, Customs asked Dr. Freeman on May 26, 1993,
whether industry pays them for doing "unusual or difficult
analyses for which [they, industry,] are not equipped" and
whether the transmission electron microscope would be used in
industrial research support. His response was: "Georgia Tech does
contract with industry to do research on projects of mutual
interest."
On the basis of these statements, the application was denied
on August 6, 1993, by HQ decision letter 557337 DLD, on the
grounds that it did not satisfy subsection 301.4(a)(3) of the
joint regulations of the Department of Commerce and the
Department of the Treasury (15 CFR 301.4(a)(3)). This subsection,
one of three which is the responsibility of Customs, does not
allow "commercial use" of the instrument of the application.
Accordingly, the entry pertaining to the importation (San
Francisco entry no. XXXXXXXXXXXXX) was liquidated as dutiable by
the San Francisco District on July 15, 1994. A protest was timely
filed with the San Francisco District Director on September 14,
1994, with a request for further review. This is the response of
Customs Headquarters to the protest and application for further
review.
The protest states:
The ultimate end user of this product, Georgia Institute of
Technology (GIT), submitted the application (file no.557337)
for duty free entry to the Special Classification Branch in
Washington. In response to a direct Customs inquiry
regarding the application, the applicant mistakenly stated
that the institution does contract with industry to do
research on projects of mutual interest. Citing subsection
301.4(a)(3) of the joint regulations which precludes any
usage for commercial purposes, the application was rejected
by the Special Classification Branch. The entry was
liquidated on 7/15/94 as entered.
In fact, while the GIT does receive financial support from
commercial entities, this is not tied to any project for
commercial gain. The electron microscope is located on the
premises of the GIT School of Materials Science and
Engineering whose primary mission is to educate students and
to grant B.S., M.S. and Ph.D degrees in various fields of
materials science and engineering. Funding from industry is
primarily for the purpose of allowing students the
opportunity to work on challenging problems for thesis
research which is also practically relevant. Further,
commercial funding supports only basic and generic
technology development at the pre-competitive and pre-commercial stages. All research conducted on the electron
microscope will be published in open literature and/or in
proceedings of conferences open to everyone. This research
is free of commercial interests.
Georgia Tech submitted, on April 17, 1995, a list of journal
articles, theses and posters/conference proceedings pertaining to
research performed with the use of the microscope of the protest
in further support of their contention that the results of
research were being made available to the public. (Customs may
consider, pursuant to 15 C.F.R. 301.4(a)(3), whether research
results will be timely and fully made available to the public.)
The Customs Service accepts the statements by Georgia Tech
that the research is free of commercial interest, and therefore,
the application will be approved by Customs and forwarded to the
Department of Commerce for further review under the criteria
relating to that department. A final decision on this protest
will be made upon receipt of the final determination by the
Department of Commerce.
Sincerely,
John Durant, Director
Commercial Rulings Division