CLA-2-98:OT:RR:E:NC:N1:117
Ms. Catharine L. Foote
Commercial Metals Company dba CMC Dallas Trading
6565 N. MacArthur Blvd.
Suite 800
Irving, Texas 75039
RE: The applicability of subheading 9802.00.6000 to certain aluminum sheet from Greece.
Dear Ms. Foote:
In your letter dated October 4, 2007, you requested a tariff classification ruling seeking confirmation that partial duty exemption under subheading 9802.00.6000 is applicable to your importations of aluminum sheet from Greece.
You state that your company purchases coils of aluminum sheet, manufactured in Greece, for importation to the United States (U.S.). In the U.S., they are subsequently resold to U.S. manufacturers of tool boxes. As a result of this tool box manufacturing process, aluminum scrap is produced. You indicate that your company purchases this scrap and exports it to your supplier in Greece where it is subsequently melted down and used in the production of the aluminum coils to be shipped back to you in the U.S. After importation to the U.S., the aluminum sheet will first be cut to size. The cut sheet will subsequently be manufactured into the tool boxes employing operations such as stamping, bending, welding, punching holes, hemming and attaching hardware.
Subheading 9802.00.6000, Harmonized Tariff Schedule (HTS), provides a partial duty exemption for: (a)ny article of metal (as defined in U.S. note 3(e) of this subchapter) manufactured in the United States or subjected to a process of manufacture in the United States, if exported for further processing, and if the exported article is processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing. This tariff provision imposes a dual "further processing" requirement on eligible metal articles: one foreign, and when returned, one domestic. Articles of metal satisfying these statutory requirements may be classified under subheading 9802.00.60, HTS, with duty only upon the value of such processing performed outside the U.S., upon compliance with the documentation requirements of section 10.9, Customs Regulations (19 CFR 10.9). The Customs Service has consistently held that subheading 9802.00.60, HTS, is inapplicable to scrap obtained directly from processing foreign-made metal in the U.S. The requirement that scrap be a metal article "manufactured or subjected to a process of manufacture" in the U.S. is satisfied only if the metal article from which the scrap was obtained was initially manufactured or subjected to a process of manufacture in the U.S. Based on the information submitted, the scrap in this case is obtained from metal articles, the tool boxes, which were produced in the U.S. Thus, the metal scrap in the instant case is "manufactured or subjected to a process of manufacture" in the U.S., as required by subheading 9802.00.60, HTS.
In C.S.D. 84-49, 18 Cust. Bull. 957 (1983), it was stated that:
(f)or purposes of item 806.30 (the precursor provision to subheading 9802.00.60, HTS), the term "further processing" has reference to processing that changes the shape of the metal or imparts new and different characteristics which become an integral part of the metal itself and which did not exist in the metal before processing; thus, further processing includes machining, grinding, drilling, threading, punching, forming, plating and the like, but does not include painting or the mere assembly of finished parts by bolting, welding, etc.
The processing of the aluminum scrap in Greece by melting and rolling into aluminum sheet, changes the shape of the metal and imparts new and different characteristics to the metal and therefore, constitutes “further processing” under this tariff provision. The foreign further processing requirement is therefore met by this processing in Greece.
What remains to be determined is whether the aluminum sheets, imported from Greece have met the domestic further processing requirement imposed by the statute. In this case the domestic further processing operations will be performed by your clients in the United States who manufacture the tool boxes. The operations described above include cutting to length, stamping, bending, welding, punching holes, hemming and adding hardware.
There is no requirement under subheading 9802.00.60, HTS, that the identity of the person who performs the "further processing" in the U.S. be known at the time the material is exported from the U.S., or at the time the returned material enters the U.S. There is also no requirement that the same person who exported the material, or the same person who imports the material must perform the "further processing" in the U.S.
Based on the description of the processing typically performed in the United States, it appears that the domestic “further processing requirement” has also been met. Entitlement to the partial duty exemption under subheading 9802.00.60, HTS, is contingent upon compliance with the documentary requirements of 19 CFR 10.9 and meeting the requirements of the "further processing" of the aluminum sheet here in the United States. In addition, you must satisfy the director at the port of entry that the actual performance of the subsequent processing of the aluminum sheet in the U.S. was performed within a reasonable period of time.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Gloria Stingone at 646-733-3020.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division