OT:RR:NC:N1:104
Mr. John A. Bessich, Esq.
Follick & Bessich
33 Walt Whitman Road, Suite 310
Huntington Station, NY 11746
RE: The country of origin of a Miter Saw
Dear Mr. Bessich:
In your letter dated December 10, 2021, on behalf of your client, Stanley Black & Decker, Inc., you requested a country of origin ruling for the DeWalt DWS780TY3x 12 ” Double Bevel Sliding Compound Power Miter Saw.
The merchandise under consideration is the DeWalt DWS780TY3x. It is described as a “portable, double bevel, sliding compound power miter saw.” The miter power saw is a heavy-duty circular saw that is mounted on a portable base and powered by an electric motor. The saw is mounted on a movable arm that is attached to a rotating table on the portable base. The S/A support housing and movable arm subassemblies allow the saw to be positioned at a variety of angles. As it has double bevel capability, it can cut a bevel or angle on either the left or the right side of the workpiece and in both directions without removing and turning the workpiece over or around. The arm of the saw can slide back and forth on tube-like rails to provide a range of motion not available in a stationary saw. The saw has a plug-in 15-amp electric motor which delivers up to 3,800 rpm to the saw blade. The saw has an integrated crosscut positioning and alignment system with a cut-line indicator which uses an LED light to cast a laser on the work surface. A sliding “back fence” design allows the saw to cut 2 x 14-dimensional lumber at 90 degrees and 2 x 12 at 45 degrees. The saw also cuts at other capacities including 6 ¾ inch vertical, 7 ½ inch nested crown and 13 7/8 inch horizontal. A rail lock latch holds the head away from the “back fence” to maximize vertical cutting capacity.
The applicable subheading for the DeWALT Miter Saw, model number DWS780TY3x, will be 8465.91.0047, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machine tools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials: Other: Sawing machines…Woodworking machines: Other: Miter saws.” The rate of duty is 3 percent ad valorem.
Your letter describes three proposed scenarios for production of the miter saw, outlined as follows:
Proposals A and B, describe scenarios wherein portions of manufacturing take place in China, the United States, and Taiwan. In China, the following subassemblies are produced and shipped to Taiwan: the saw blade; a switch; a dust bag, a clamp; the left, base, and right fences; the S/A lower guard; the right and left extension tubes; a base; a table; and the S/A support housing. Components such as bearings, a belt, a gasket, springs, a pawl, and a clamp are sourced from the United States and shipped to Taiwan. The motor and arm subassemblies are made in Taiwan. The final assembly process in Taiwan is described as a series of inspections, assemblies, mountings, fastening, installations, adjustments, testing, wiping, wrapping, and packing. The only variation in proposal B is that the table will be die cast in China and then exported to Taiwan for machining.
In Proposal C, the production scenario is equivalent to Proposal A, apart from the table, which will be die cast and machined in Taiwan.
You contend that the miter saw is substantially transformed in Taiwan by the addition of the motor and arm subassemblies and maintain that the assembly process performed in Taiwan is complex. Further, in all three proposals you note that the table and base assembly is performed in Taiwan, not China, and after processing in Taiwan, they are substantially transformed into a new and different product.
The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part.”
For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984).
Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one, which leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). No substantial transformation occurs if the imported parts are formed into their final shape prior to importation and their intended use is predetermined at the time of importation.
Additionally, Customs and the Court of International Trade have declined to find that a substantial transformation occurs where there is a pre-determined use of the goods prior to processing into its finished form. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d per curiam, 989 F.2d 1201 (Fed. Cir. 1993) (hand tool components intended to be incorporated in a finished mechanic’s hand tool were cold-formed or hot-forged into their final shape prior to their importation into the U.S.).
Based upon the facts presented in Proposals A and B, it is the opinion of this office that the manufacturing process in China renders the end-use of the subassemblies predetermined as they could not be used for any other purpose. The components manufactured in China are substantial, make up the majority of the bulk of the miter saw, and perform the sliding and tilting functions essential to the double-miter-cutting capability of the saw. Further, the addition of the motor and arm subassemblies (as well as the components from the United States) in Taiwan would not substantially transform the miter saw into a new and different article of commerce with a name, character, and use distinct from that of the exported good; nor are the assembly operations complex enough to transform the miter saw into a new article. Therefore, the DeWALT Miter Saw, model number DWS780TY3x, assembled under both Proposals A and B, will be China.
With respect to Proposal C, we note that the finished device consists of several important subassemblies which were previously manufactured in China. These items, specifically the S/A support housing, saw blade, and the various components of the “fence” impart critical functionality for the saw. The S/A support housing is a substantial mechanical element which allows the saw to slide back and forth and tilt. Since this is a double bevel miter saw, the S/A support housing allows the saw to tilt to both the right and left so the user can make bevel cuts in both directions without turning the workpiece upside down. Therefore, based upon the facts presented, it is the opinion of this office that the manufacturing process in China renders the end-use of the subassemblies predetermined as they could not be used for any other purpose. Further, the addition of the motor, arm subassembly, and table (as well as the components from the United States) in Taiwan would not substantially transform the miter saw into a new and different article of commerce with a name, character, and use distinct from that of the exported good; nor are the assembly operations complex enough to transform the miter saw into a new article. Therefore, the DeWALT Miter Saw, model number DWS780TY3x, assembled under Proposal C, will be China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8465.91.0047, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8465.91.0047, HTSUS, listed above.
Please note that 19 C.F.R. 177.9(b)(1) provides that "[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based."
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 Denise Hopkins at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division