CLA-2 CO:R:C:V 554834 DBI
TARIFF NO: 9802.00.40, HTSUSA (806.20, TSUS)
Alsup and Associates
P.O. Box 125
Del Rio, Texas 78841
RE: Applicability of partial duty exemption of item 806.20, TSUS,
to certain pecan pieces exported for removal of meat
Dear Mr. Alsup:
This is in response to your letter of September 16, 1987,
in which you request a ruling concerning the applicability of
item 806.20, Tariff Schedules of the United States (TSUS), to
certain U.S. grown pecan pieces exported to Mexico for removal of
the meat from the shells. The removed meat is then returned to
the U.S. for consumption.
You advise that in the U.S., your client will place whole
U.S. grown pecans (not shelled) in a pecan sheller. The shells
are cracked and the empty shells and whole meat pieces are
removed. You indicate that following the shelling process,
approximately 20% to 30% of the pecans remain as pecan pieces
with pieces of the shell and meat still attached. Your client
will ship these remaining pieces to Mexico where the meat will be
hand picked from the shell. The meat will then be packaged and
shipped to the U.S. for consumption.
Whether the described pecan pieces, when returned to the
U.S., will be eligible for the partial exemption from duty
provided for in item 806.20, TSUS, (9802.00.40, Harmonized Tariff
Schedule of the United States Annotated (HTSUSA)).
LAW AND ANALYSIS:
Item 806.20, TSUS, provides for the assessment of duty on
the value of repairs or alterations performed on articles
returned to the U.S. after having been exported to be advanced in
value or improved in condition by any process of manufacture or
other means. 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 (1957);
Guardian Industries Corporation v. United States, USITR, 3 CIT 9,
Slip Op 82-4 (Jan. 5, 1982). Item 806.20, TSUS, treatment also
is precluded where the exported articles are incomplete for their
intended use and the foreign processing operation is a necessary
step in the preparation or manufacture of finished articles.
Dolliff and Company, Inc. v. United States, 66 CCPA 77, CAD 1225,
599 F.2d 1015 (1979).
We have previously held in a ruling dated January 19, 1987
(HQ 543869) that the processing of eggs by cracking the shells
and separating various parts of the eggs consisted of operations
which exceeded the meaning of the term alterations and therefore
precluded tariff treatment of the returned yolks under the
provisions of item 806.20, TSUS. In that case we found that the
returned processed egg yolks constituted new and commercially
different articles than the exported whole eggs and that this
process was an intermediate step in the preparation of the
finished product which could not be characterized as an
We have also held in a ruling dated June 29, 1977 (HQ
051909) that the extraction of crab meat from snow crab clusters
(crab in shell) constituted an operation which created a
commercially different article and therefore the foreign
processing of the crab product went beyond the scope of item
806.20, TSUS, and was not an alteration.
We believe that the foreign shelling process constitutes an
operation that exceeds a repair or alteration based on our
previous rulings. The pecan pieces that are shipped to Mexico
are commercially different from the meat that returns.
Additionally, the pecan pieces are incomplete for their intended
use and require a further step in the preparation of the finished
On the basis of the information submitted, it is our
opinion that the Mexican shelling process may not be considered
an alteration as that term is used in item 806.20, TSUS, and,
therefore, precludes tariff treatment of the returned pecan meat
under the provisions of item 806.20, TSUS.