CON-2-07-CO:R:C:E 954058 AJS
District Director
U.S. Customs Service
10 Causeway Street
Room 603
Boston, MA 0222-1059
ATTN: Edward Szymczak, Supervisory Import Specialists
RE: Protest 0401-92-100384; General Note 3(c)(iv); HQ 079093; HQ
726350.
Dear Sir:
This is our decision in protest 0401-92-100384, dated June
18, 1992, concerning the assessment of duties on entries of
experimental civil aircraft engine parts.
FACTS:
The protestant entered civil aircraft engine parts under
subheading 8411.91.90, Harmonized Tariff Schedule of the United
States (HTSUS), and claimed duty-free status under its blanket
certification of use in civil aircraft on file with the U.S.
Customs Service pursuant to 19 CFR 10.183. This protest does not
involve the issue of the protestant's failure to file certifi-
cation for use in civil aircraft when the blanket certification
on file had expired. The subject parts were imported for
purposes of testing and development, and subsequent exportation.
After entry, these parts were installed (or set aside for
installation) in test engines which typically are fired and run
in a test cell. The test engines usually are not placed in
service on commercial airplanes. Customs determined that the
subject parts were not being used in civil aircraft because they
were not imported for incorporation in flight-capable commercial
aircraft. Customs liquidated the subject entries and assessed
duties at 3.7 percent ad valorem.
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ISSUE:
Whether the subject engine parts qualify for duty-free entry
under General Note 3(c)(iv), HTSUS.
LAW AND ANALYSIS:
Initially, we note that this protest was timely filed
pursuant to 19 U.S.C. 1514(c)(2)(A). The date of liquidation was
April 10, 1992, and this protest was filed on June 18, 1992. We
also note that the liquidation of an entry is a protestable
matter pursuant to 19 U.S.C. 1514(a)(5).
General Note 3(c)(iv) provided:
Articles Eligible for Duty-Free Treatment Pursuant to the Agreement on Trade in Civil Aircraft. Whenever a product is
entered u nder a provision for which the rate of duty "Free ( C)" appears in the "Special" subcolumn, the importer shall file a written statement, accompanied by such supporting documentation as the Secretary of the Treasury may require, with the appropriate customs officer stating that the imported article has been imported for use in civil aircraft,
that it will be so used and that the article has been approved
for such use by the Administrator of the Federal Aviation
Authority (FAA) or by the airworthiness authority in the
country of exportation, if such approval is recognized by the
FAA as an acceptable substitute for FAA certification, or
that an application for approval for such use has been
submitted to, and accepted by, the Administrator of the FAA.
For purposes of the tariff schedule, the term "civil aircraft"
means all aircraft other than aircraft purchased for use by
the Department of Defense or the United States Coast Guard.
We note that this note was subsequently changed to General Note
6, HTSUS.
The specific issue in this protest is whether the subject
engine parts used for testing and development purposes are
imported for use in civil aircraft and that they are so used
within the meaning of the above note.
In HQ 079093 (December 16, 1986), also published as C.S.D.
87-4, Customs addressed the application of the above note under
the Tariff Schedules of the United States (TSUS). That case
involved underwing fairing panels imported for use both in static
test and fatigue test aircraft. These aircraft were incapable of
actual flight because certain equipment not needed for the tests
were not installed. The issue was whether the actual use of the
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aircraft parts govern their eligibility for duty-free entry under
General Note 3(c)(iv). Customs ruled that the clear intent of
the note requires actual use of the subject parts in a flight-capable aircraft. Therefore, Customs denied duty-free treatment
of the subject panels because they were used in test aircraft
incapable of actual flight.
In this case, the subject parts were installed in test
engines which are fired and run in a test cell. The test engines
usually are not placed in service on commercial aircraft, and no
evidence exists in the file to indicate that the subject parts
were placed in service on commercial aircraft. Based on these
facts, we find HQ 079093 instructive for determining that the
subject parts were not imported for use in civil aircraft nor so
used in civil aircraft. Therefore, the General Note 3(c)(iv) is
inapplicable in this case.
In HQ 726350 (September 20, 1984), Customs addressed the
application of the above note under the TSUS for experimental
aircraft engines imported to test aircraft. A review of the file
indicates that the engines were utilized in a flight test on a
certified aircraft. Customs stated that insofar as the
experimental nature of engines is concerned, nothing in the
headnote or in the newly published amendments to the Customs
Regulations (T.D. 84-109) addresses that issue. Accordingly,
Customs concluded that if the proper certification of use is
filed the fact that the articles imported will be used in
experimental aircraft, are themselves of an experimental nature,
or are to be used in connection with testing or experiments is
irrelevant as long as all other requirements of law and
regulation are complied with. We note that one of these
requirements stated in the ruling is that an article will be used
in civil aircraft. Therefore, we view both HQ 726350 and HQ
079093 as requiring that the articles in General Note 3(c)(iv) be
used in civil aircraft.
Despite the mutual requirement of the above discussed
decisions, this protest is nevertheless factually distinguishable
from HQ 726350 because the subject parts were not utilized in a
flight test on a certified aircraft. As stated previously, the
subject parts were only used in a test cell. Accordingly, we do
not find HQ 726350 instructive for determining that the subject
parts were imported for use in civil aircraft or so used in civil
aircraft as required by General Note 3(c)(iv).
HOLDING:
The protest is denied. The subject engine parts were not
imported for use in civil aircraft nor so used in civil aircraft
as required pursuant to General Note 3(c)(iv), HTSUS.
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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, with
the Customs Form 19, 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