CLA-2 RR:TC:SM 559513 BLS
Regional Commissioner
c/o Protest and Control Section
6 World Trade Center, Room 761
New York, New York 10048-0945
RE: Application for Further Review of Protest No. 1001-95-106218; eligibility
of certain stone for partial duty exemption under
subheading 9802.00.50,
HTSUS; subheadings 6802.91.05, 6802.91.15
Dear Sir:
This is in reference to the memorandum dated October 18,
1995, from the Chief, Residual Liquidation and Protest Branch,
forwarding the above-captioned Application for Further Review,
timely filed on behalf of Domestic Marble and Stone Corp.
Protestant has filed additional submissions in support of the
protest, the most recent dated January 16, 1998.
In its letter dated July 8, 1996, copy enclosed, protestant
has also advised that C.E. 4701-94-4471224201-3 should be
withdrawn from our consideration of the protest. Please take
appropriate action to comply with this instruction.
FACTS:
The subject merchandise is described on the entry invoices
as "Vermont Imperial Danby Eureka Marble," quarried by Vermont
Quarries Corp. in an underground site located near Danby,
Vermont. The process of quarrying involves selecting an area for
excavation, and cutting the stone from the quarry. This is
accomplished by using diamond wire, diamond chains and drilling
machines to saw and release areas of stone. When the stone has
been cut from the wall, drilling machines and airbags are used to
push it away from the wall.
After the stone is quarried, it is displayed for the buyer's
selection and approval. Protestant advises that the stone
covered by the subject entries was selected for installation in
the Foley Square courthouse in New York City. The architect
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chose the subject stone because of its specific color, graining,
veining and physical characteristics.
Once the architect selects the stone, it is transported to
Italy, where it is placed into a gang saw which slices it into
smaller pieces. After this cutting process is
completed, the material moves to an automatic honing machine.
This device merely removes the roughness and scratches left by
the gang saw. The stone is then cut to specific sizes required
for the job and packaged for shipping back to the U.S.
Upon arrival in the U.S., the material is prepared for
installation. This includes drilling anchor holes, cutting
mitres and trimming the slabs to fit.
The merchandise was entered under subheading 9802.00.50,
Harmonized Tariff Schedule of the United States (HTSUS), as
articles exported for repair or alteration and returned to the
U.S., with duty only on the value of the repair or alteration.
The stone was classified upon entry under HTSUS subheading
6802.91.15, "Worked monumental or building stone......Other:
Marble, travertine and alabaster: Marble: Other."
The entries were liquidated under subheading 6802.92, HTSUS,
"Worked monumental or building stone (except slate) and articles
thereof,...Other, Other calcareous stone," with no allowance for
the value of the operations performed abroad. Protestant
contends in this protest that subheading 9802.00.50, HTSUS, is
applicable. Further, protestant contends that the imported
stone is classifiable under HTSUS subheading 6802.21.50, as
building stone of marble, simply cut or sawn, with a flat or even
surface, or under subheading 6802.91.05, which provides for
marble slabs.
ISSUES:
1) Whether the imported stone is eligible for the partial
duty exemption under subheading 9802.00.50, Harmonized Tariff
Schedule of the United States (HTSUS), upon return from Italy.
2) What is the proper classification of the stone?
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LAW AND ANALYSIS:
Subheading 9802.00.50
Articles returned to the U.S. after having been exported to
be advanced in value or improved in condition by repairs or
alterations may qualify for the partial duty exemption under
subheading 9802.00.50, HTSUS, provided the foreign operation does
not destroy the identity of the exported articles or create new
or commercially different articles through a process of
manufacture. See A.F. Burstrom v. United
States, 44 CCPA 27, C.A.D. 631 (1956), aff'g C.D. 1752, 36 Cust.
Ct. 46 (1956); Guardian Industries Corp. v. United States, 3 CIT
9 (1982). Accordingly, entitlement to this tariff provision is
precluded where the exported articles are incomplete for their
intended purpose prior to the foreign processing and the foreign
processing operation is a necessary step in the preparation or
manufacture of finished articles. Dolliff & Company, Inc. v.
United States, 455 F. Supp. 618 (CIT 1978), aff'd, 599 F.2d 1015
(Fed. Cir. 1979). Articles entitled to this partial duty
exemption are dutiable only upon the cost or value of the foreign
repairs or alterations when returned to the U.S., provided the
documentary requirements of section 10.8, Customs Regulations (19
CFR 10.8), are satisfied.
In Headquarters Ruling Letter (HRL) 557939 dated August 31,
1994, quarried marble was cut in the U.S. into a rectangular
block of stone and then exported to Italy, where it was cut into
slabs, nominally polished, and returned to the U.S., where the
slabs were processed by cutting to size and polishing. The
completed products were used for table tops and other like
products. In that case, we found that the exported stone was not
complete for its intended use without the slicing operation
performed in Italy, and that this operation was a necessary step
in the final use of the product, e.g., table tops. We noted that
the required additional processing in the U.S. was not relevant,
as HTSUS subheading 9802.00.50 concerns the condition of the
article as imported into the U.S. Accordingly, since the stone
block as exported to Italy was not complete for its intended use,
we held that the imported product was not entitled to the
benefits of subheading 9802.00.50.
In HRL 555085 dated September 27, 1988, glass rectangles
were exported to Japan, cut to smaller sizes, and lightly
polished. The processing also included grounding of the edges.
The articles were further processed in the U.S. upon return from
Japan. Customs found in that case that the returned glass was
commercially different from the exported glass, and, as in HRL
557939, the glass was not complete for its intended use upon
exportation from the U.S. Rather, the Japanese
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operations were necessary steps in the preparation of the
finished glass.
In the instant case, the stone in its condition as exported
to Italy requires further cutting into smaller specified sizes
and additional operations in the U.S. before it is complete for
its intended use as building stone. The operations performed in
Italy are necessary steps in this manufacturing process, as are
the finishing operations performed in the U.S. Accordingly, as
the stone is not complete for its intended use upon exportation,
it is not entitled to the benefits of HTSUS 9802.00.50 upon
return from Italy.
We find that HRL 555949 (December 28, 1989) and HRL 555411
(August 11, 1989), cited by protestant, are not supportive of its
position. HRL 555949 involved rope in material length sent to
Mexico to be cut to shorter lengths. HRL 555411 involved cutting
to length of wire and tieing the various lengths with a twist
tie. Processing of this nature is considered an alteration since
material lengths are exported and material lengths are also
imported. Thus, the exported product is commercially
indistinguishable from the returned article and is considered
complete for its intended use upon exportation. We find that
these cases are not analogous to the instant situation, as the
stone is not complete for its intended use upon exportation, the
operations performed abroad substantially exceed the mere cutting
to length of the rope and wire involved in HRL 555949 and HRL
555411, and the returned product is clearly distinguishable from
the exported stone.
Classification
As noted, supra, protestant is of the opinion that the
imported stone is classifiable under HTSUS subheading 6802.21.50,
as building stone of marble, simply cut or sawn, with a flat or
even surface, or under subheading 6802.91.05, which provides for
marble slabs.
As it appears that appropriate samples may not have been
available at the time of entry, and were not available upon
protest, the concerned import specialist could not conclude at
the time of protest whether the stone was marble, as claimed on
the entry. He therefore classified the merchandise under HTSUS
subheading 6802.22, which does not provide for marble but for
"Other calcareous stone." However, subsequent to filing the
protest, this Customs officer examined the stone which (Customs
concurs) had been used to build a courthouse in New York City.
As a result of his inspection of the stone, the Customs officer
advised this office that he
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found the stone to be marble. However, he was also of the
opinion that classification of these items depended on how they
were cut and whether or not they were considered "Slabs." The
NIS (National Import Specialist) confirmed the Customs officer's
findings. Thus, protestant was requested to submit additional
information showing a breakdown of the stone on an entry-by-entry
basis of the type of building item involved, and of the value.
In submissions dated November 19, 1997 and January 16, 1998,
protestant
forwarded to Customs a breakdown of the marble building items
(base, cornice, header, jamb, cladding and returns) and a
corresponding total value for that item on an entry-by-entry
basis. (In this regard, it is noted that the total value of the
building items on an entry-by-entry basis does not appear to
match in every case the total invoice values reflected on the
entry. An additional submission may be required to reconcile
these totals.)
The concerned Customs officer is of the opinion that the
cladding, returns, jambs and headers are properly classifiable
under subheading 6802.91.05, HTSUS, "Worked monumental or
building stone (except slate) and articles thereof, ...Other:,
Marble, travertine and alabaster: Marble: Slabs." The cornices
and bases were not considered slabs, as such articles were
finished beyond the definition of a slab
(".. broad, flat, rather thick piece, as of cake, stone, or
cheese." Webster's II New Riverside University Dictionary, 1988).
These articles were considered classifiable under HTSUS
subheading 6802.91.15, "Worked monumental or building
stone.....Other: Marble, travertine and alabaster: Marble:
Other." HTSUS subheading 6802.21.50 was not considered
applicable as the imported marble was polished, and not "simply
cut or sawn." The NIS orally advised this office that he agrees
with this determination.
We concur with the findings of the concerned field officer
and the NIS with regard to the classification of the imported
articles.
HOLDING:
1) The operations performed abroad on the stone are not
considered repairs or alterations within the meaning of
subheading 9802.00.50, HTSUS, since upon exportation from the
U.S. the material is not complete for its intended use as
building stone. Therefore, the imported product is not eligible
for the partial duty exemption under this tariff provision.
2) The cladding, returns, jambs and headers are properly
classifiable under
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subheading 6802.91.05, HTSUS, "Worked monumental or building
stone (except slate) and articles thereof, ...Other: Marble,
travertine and alabaster: Marble:
Slabs." The cornices and bases are classifiable under HTSUS
subheading 6802.91.15, "Worked monumental or building
stone.....Other: Marble, travertine and alabaster: Marble:
Other."
Under the circumstances, you are directed to deny the
protest in part and grant the protest in part in accordance with
the foregoing.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550- 065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office to the
protestant attached to the Form 19, Notice of Action, no later
than 60 days from the date of this letter. Any reliquidation of
the entries 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 Ruling 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