CLA-2-96:OT:RR:NC:N4:433
Stephen Dahl
Attorney-in-fact for Diversified Dynamics, Inc.
Licensed Customs Broker
Nippon Express USA, Inc.
P.O. Box 11873
St. Paul, Minnesota 55111
RE: Eligibility of paint rollers for partial duty exemption under subheading 9802.00.50, Harmonized Tariff Schedule of the United States – HTSUS.
Dear Mr. Dahl:
In your letter dated November 25, 2009, you requested, on behalf of Diversified Dynamics Inc., a tariff classification ruling. Specifically, you request a “ruling on determination of goods qualifying for treatment under HTS 9802.00.50.”
The submitted sample is a paint roller manufactured in the United States that is sent to China to be further worked by the addition of perforations into the roller; these perforations allow paint to flow through the roller and into the napping of the roller from the inside out. The roller itself is made from a hard plastic core, which is covered with polyester fabric material napping. Overseas manufacturing entails approximately 256 tiny holes to be perforated into the roller – the size of the perforations is approximately 2.4 mm in diameter. The paint rollers are intended to be used with a device called a paint stick, which is a tube that has the capacity to suck up paint, similar to a syringe. Once the paint is manually pushed up into the tube, it exits through a valve which then forces the paint through the holes of the roller, so that it can be absorbed into the napping of the roller. Upon saturation of the roller, the paint stick device, is ready to manually apply paint onto the surface of walls, ceilings and other applications requiring the rolling of paint.
The applicable subheading for the paint stick roller, will be 9603.40.2000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Brooms, brushes (including brushes constituting parts of machines, appliances or vehicles)……: Paint, distemper, varnish or similar brushes (other than brushes of subheading 9603.30); paint pads and rollers: Paint rollers.” The rate of duty will be 7.5% ad valorem.
Subheading 9802.00.50, HTSUS, provides a partial duty exemption for articles returned to the U.S. after having been exported to be advanced in value or improved in condition by means of a repair or alteration and duty is assessed only on the cost or value of the repair or alteration abroad. However, the application of this tariff provision is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff'd C.D. 1752, 36 Cust.Ct. 46 (1956) and Guardian Industries Corp. v. United States, 3 CIT 9 (1982).
The partial duty exemption provided by subheading 9802.00.50, HTSUS, is also precluded where the exported articles are incomplete for their intended use and foreign operation constitutes an intermediate processing operation, which is performed as a matter of course in the preparation or the manufacture of finished articles. See Dolliff & Company, Inc., v. United States, 81 Cust.Ct. 1, C.D. 4755, 455 F.Supp. 618 (1978), aff'd, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015, 1019 (1979). It is well settled that Congress did not intend to permit incomplete articles to be exported and made into finished products in the foreign country and when returned to subject to duties only on the cost of the so-called alterations. United States v. J.D. Richardson Company, 36 CCPA 15 C.A.D. 390 (1948) cert. denied 336 U.S. 936 (1949).
It is your contention that the paint rollers when exported from China and imported into the United States qualify for partial duty exemption using tariff code 9802.00.50, in that, the alteration that is taking place overseas is the perforation of already manufactured paint rollers of U.S. origin. In support of your argument you state that (1) the returned perforated paint rollers with its very small holes can be used like other manual paint rollers, and (2) there is no change in HTSUS classification between the non-perforated and perforated paint rollers, both are classified as paint rollers.
Marketing literature found on the internet of paint stick rollers indicates a series of steps necessary to operate such devices prior to the application of rolling paint. For one such paint stick the steps involve: (1) sliding the small end of the fill tube through the hole in the can lid so that it will be pointed up when the lid is secured to the paint can (2) attaching the can lid securely to the paint can, (3) turning the switch on the main tube handle to fill, (4) pressing down and firmly hold the fill valve of the main tube onto the fill tube, (5) pulling the plunger to draw the paint into the main tube, and (6) priming the roller.
With regard to the facts in this case, the adding of over 250 perforations in China to a paint roller of U.S. origin, to allow for the flow of paint through the roller and into the napping of the roller, for application of rolling paint, appears to constitute a series of finishing operations necessary for the functioning of the paint stick device. One cannot take a non-perforated roller and place it on paint stick, as the non-perforated roller would be unable to absorb the paint into its napping; priming of a non-perforated roller for use with a paint stick device is impossible. The perforations provide a change in character, quality and condition of the roller, thereby allowing for continuous paint delivery and improved time performance for completion of jobs. We believe that the perforations of the paint roller/s in China do not constitute acceptable “alterations” within the meaning of HTSUS subheading 9802.00.50.
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 Neil H. Levy at (646) 733-3036.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division