CLA-2 R:C:S 559516 DEC
Mr. Louis S. Shoichet
Tompkins & Davidson
One Astor Plaza - 43rd Floor
1515 Broadway
New York, New York 10036-8901
RE: Subheading 9810.00.60, HTSUS; Instrument; Apparatus; Primary
Mirror;
Telescope; 15 CFR 301.2(k)
Dear Mr. Shoichet:
This is in response to your correspondence dated October 17,
1995, in which you request a binding ruling concerning the
classification of an eight meter optical telescope mirror on behalf
of your client, the Association of Universities for Research in
Astronomy, Incorporated (AURA).
FACTS:
AURA is in charge of managing the Gemini Project pursuant to a
cooperative agreement with the National Science Foundation (NSF)
which involves, in part, the erection of the Gemini Telescope on
Mauna Kea, Hawaii. The primary mirror blank for the telescope is
manufactured by Corning, Incorporated, in New York. REOSC Optique
of Ballainvilliers, France, will grind and polish the eight meter
mirror blank. You state that the optically worked mirror will
weigh approximately 25 tons and it will allow for a telescope with
a specification goal of .10 arc/second at the infrared wavelength
which exceeds any other ground telescope previously constructed.
On March 30, 1995, the Customs Service issued a letter denying
AURA's application for classification pursuant to subheading
9810.00.60, HTSUS, on the ground that the optically worked mirror
is a "component" of the telescope and therefore ineligible for the
claimed duty-free status. In support of this conclusion, Customs
cited section 301.2(k) of the joint regulations of the Department
of Commerce and the Department of the Treasury (15 CFR 301.2(k)),
which provides that applications for duty-free entry shall not be
accepted for components of instruments.
Subsequently, on October 17, 1995, you submitted a request for
reconsideration contending that Customs' current interpretation of
subheading 9810.00.60, HTSUS, is erroneous to the extent that it
precludes duty-free treatment for separate components of scientific
equipment. On February 23, 1996, representatives from the NSF,
AURA, Customs, and counsel met to discuss the eligibility of the
primary mirror for classification pursuant to subheading
9810.00.60, HTSUS. As a result of this meeting, on March 13, 1996,
you forwarded a document prepared by G.W. Van Citters, Jr. of the
NSF which explained the role, function, and design characteristics
of the Gemini Telescope's primary mirror in relation to the
telescope itself. In addition, on May 14, 1996, you submitted cost
information with respect to the various items used to erect the
telescope.
In the letter submitted on March 13, 1996, Mr. Van Citters
highlighted the fact that the two most critical factors of an
astronomical telescope are the collecting area of the telescope and
the quality of the image that the telescope delivers to the
instrumentation. The giant 8-meter primary mirror is the
collecting area of the telescope and is capable of collecting over
600,000 times as much light as the human eye. Mr. Van Citters
stated that the degree of detail that can be obtained from an
object being viewed and the extent to which a faint object can be
detected at all is determined by the quality of the image that is
formed at the focus of the telescope. The Gemini Project's goal is
to construct a primary mirror capable of concentrating light from a
distant star into a spot with a diameter less than that of a human
hair. According to Mr. Van Citters, it is the unprecedented size
and resolution of the Gemini Project's primary mirror that are of
paramount importance to the telescope.
ISSUE:
Whether the Gemini Telescope primary mirror qualifies as a
scientific instrument or apparatus under subheading 9810.00.60,
HTSUS.
LAW AND ANALYSIS:
Subheading 9810.00.60, HTSUS, provides for the duty-free
treatment of:
Articles entered for the use of any nonprofit
institution,
whether public or private, established for
educational
or scientific purposes:
9810.00.60 Instruments and apparatus, if no
instrument
or apparatus of equivalent scientific value
for the purposes for which the instrument or
apparatus is intended to be used is being
manufactured in the United States (see U.S.
note 6 to this subchapter).
United States Note 6(a), Subchapter X, Chapter 98, HTSUS,
states that
The term "instruments and apparatus" (subheading
9810.00.60)
embraces only instruments and apparatus which are
both provided
for and dutiable in:
. . .
(xvii) Chapter 90: all provisions (except
subheadings 9009.11
through 9009.90, 9013.80 and 9023.00)
. . .
Since the telescope's primary mirror would ordinarily be classified
under subheading 9001.90.06, HTSUS (and not under one of the
excluded sections cited above), you contend that Customs should
find that the primary mirror is an "instrument or apparatus"
eligible to be classified under subheading 9810.00.60, HTSUS. In
the administration of this tariff provision, the Customs Service
relies on the regulatory language contained in
15 CFR Part 301 which is jointly administered by the Department of
Commerce and the Department of the Treasury. Section 301.2(k),
which was promulgated in July, 1982, pursuant to public notice and
comment states that
(k) Components of an instrument means parts or
assemblies
of parts which are substantially less than the
instrument to which
they relate. A component enables an instrument to
function at
a specified minimum level, while an accessory adds
to the
capability of an instrument. Applications shall not
be
accepted for components of instruments that did not
enter
duty-free under tariff item 851.60 or for components
of
instruments being manufactured or assembled by a
commercial
firm or entity in the U.S. In determining whether
an item is a
component ineligible for duty-free consideration or
an accessory
eligible for such consideration, Customs shall take
into account
such factors as the item's complexity, novelty,
degree of integration
and pertinency to the research purposes to be
performed by the
instrument as a whole.
47 Fed. Reg. 32515, 32516 (July 28, 1982) (codified at 15 CFR
301.2(k)).
Citing this language in our March 30, 1995, letter, Customs denied
the AURA's application for duty-free treatment, finding that the
primary mirror is a "component" rather than a scientific instrument
or apparatus.
In support of your request for reconsideration, you cite to
the regulatory history of this provision and the intent of the
Florence Agreement to foster the free exchange of
scientific knowledge. A review of the regulatory history reveals
that the proposed rule provided that
applications shall be considered for components or
[sic] novel
instruments being built or assembled by qualified
nonprofit
institutions as part of the institutions's
scientific research or
science related program.
46 Fed. Reg. 23755, 23757 (April 28, 1981).
When the language in the final regulation was adopted, this
proposed language was deleted in response to a public comment which
objected to the allowance of separate applications for "components"
of novel instruments being built or assembled by qualified
non-profit institutions. In the Background discussion of the Final
Rule, the Government stated:
Infrequently, however, we receive applications for
parts of
instruments which, even through they may be referred
to as
"components" in the trade, are so integral to the
instrument's
function that a scientific instrument may not be
said to exist
without them. In other cases, while an identifiable
instrument
may exist without the component, one or several of
the
applicant's research purposes clearly could not be
undertaken
without the capability added by the " component."
In such cases, we believe rejection of the
application would
be more restrictive than intended by either the
Agreement [Florence Agreement] or the law.
Accordingly, in lieu of the
deleted proposal, we have added clarifying language
permitting
Customs to consider on a case-by-case basis such
components
as accessories for the purposes of these
regulations.
47 Fed. Reg. 32515, 32516 (July 28, 1982).
Upon further consideration, we agree that when the regulatory
history is read in conjunction with the language of section
301.2(k), Customs has some latitude in limited circumstances when
deciding whether an item is a "component" ineligible for duty-free
entry under subheading 9810.00.60, HTSUS. It is clear in this case
that the primary mirror is of paramount importance to the overall
function of the telescope. As Mr. Van Citters of the NSF described
in his letter, the collection of light and the quality of the
image that is formed at the focus of the telescope are the two most
critical attributes of the Gemini telescope. It is the primary
mirror's unprecedented size and resolution attributes that are
critical to the telescope's ability to perform its function in
astronomical research.
In light of the applicable law, regulations, and regulatory
history, we believe that a rejection of the application for duty-free treatment of the primary mirror would be more restrictive than
that which was intended by the Florence Agreement. Therefore, in
consideration of such factors as the primary mirror's complexity,
novelty, degree of integration and pertinency to the research
purposes to be performed by the Gemini Project's telescope as a
whole, we find that the mirror constitutes the very essence of the
telescope and thus qualifies to be considered under a separate
application pursuant to procedures set forth in 15 CFR Part 301.
HOLDING:
The application for the primary mirror used in the Gemini
Project telescope should be accepted on the ground that the primary
mirror constitutes the essence of the scientific instrument, the
telescope.
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction
Sincerely,
John Durant
Director
Tariff Classification Appeals
Division