CLA-2 CO:R:C:V 555321 GRV
Mr. Brent Baucum
Fab Cast Industries
P.O. Box 27020
El Paso, Texas 79926
RE: Applicability of partial duty exemption under HTSUS subhead-
ing 9802.00.50 or 9802.00.80 to concrete reinforcement bar
mats imported from Mexico
Dear Mr. Baucum:
This is in response to your letter of February 20, 1989,
requesting a ruling on the applicability of subheading
9802.00.50, Harmonized Tariff Schedule of the United States
(HTSUS), to concrete reinforcement bar mats to be imported from
Mexico.
FACTS:
You state that you currently export to Mexico U.S. concrete
reinforcement bars (rebars) in 40 foot lengths where they are cut
into smaller pieces ranging from 10 to 20 foot sections, and
import these rebars under the provisions of HTSUS subheading
9802.00.50 (the repairs and alterations provision). You now
propose to tie these cut rebar sections into a mat (grid) form
with bailing wire, and import them under the same tariff
provision.
ISSUE:
Whether the rebar mats are eligible for a duty exemption
under either HTSUS subheading 9802.00.50 or 9802.00.80 when
imported into the U.S.
LAW & ANALYSIS:
Articles returned to the U.S. after having been exported to
be advanced in value or improved in condition by repairs or
alterations may qualify for the partial duty exemption under
HTSUS subheading 9802.00.50, provided the foreign operation does
not destroy the identity of the exported articles or create new
or different articles. Baylis Brothers Co. United States, 64
Cust.Ct. 256, C.D. 3987 (1970). Articles entitled to this
partial duty exemption are dutiable only upon the cost or value
of the foreign repairs or alterations, provided the documentary
requirements of section 10.8, Customs Regulations (19 CFR 10.8),
are satisfied.
In the instant case, we believe that the tying of the cut
rebar with bailing wire exceeds the scope of an "alteration"
within the meaning of HTSUS subheading 9802.00.50. This deter-
mination is based on the fact that the rebar mats to be imported
will be subject to different product specifications established
by the American Society for Testing and Materials (ASTM) than
the rebars that are merely cut to shorter lengths. ASTM is an
association which establishes voluntary consensus standards for
materials, products, systems, and services. Customs and the
courts have relied upon and applied ASTM product standards as
authoritative guidelines in resolving questions of classifica-
tion, where appropriate and relevant statutory requirements have
permitted. See, Coastal States Marketing, Inc., v. United
States, 10 CIT 613, 646 F.Supp. 255 (1986). In this case, we
believe the applicability of ASTM product standards to the
subject merchandise is appropriate.
Normally, rebar is subject to ASTM designation A 615 (stand-
ard specifications for concrete reinforcement), A 616 (rail-steel
bars for concrete reinforcement), or A 617 (axle-steel bars for
concrete reinforcement). However, the standard specification for
fabricated deformed steel bar mats for rebar is ASTM designation
A 184. This change in the applicable ASTM specifications mili-
tates against a finding that the rebar mat products imported are
the same rebar products that were exported and indicates that
the rebar mats will be new or different commercial articles for
purposes of HTSUS subheading 9802.00.50. Accordingly, we find
that the tying of the cut rebar with bailing wire renders it
ineligible for the benefits of this tariff provision.
However, the information submitted indicates that an allow-
ance in duty for the foreign assembly of the rebar mats may be
made under HTSUS subheading 9802.00.80 upon importation from
Mexico. HTSUS subheading 9802.00.80 provides a partial duty
exemption for:
[a]rticles assembled abroad in whole or in part of fab-
ricated components, the product of the United States,
which (a) were exported in condition ready for assembly
without further fabrication, (b) have not lost their
physical identity in such articles by change in form,
shape, or otherwise, and (c) have not been advanced in
value or improved in condition abroad except by being
assembled and except by operations incidental to the
assembly process such as cleaning, lubricating, and
painting.
An article entered under this tariff provision is subject to duty
upon the full value of the imported assembled article, less the
cost or value of the U.S. components, provided there is compli-
ance with the documentation requirements of 19 CFR 10.24.
In this case, the preliminary foreign operation of cutting
the rebar to length constitutes an operation incidental to
assembly (see, 19 CFR 10.16(b)(6)), and the tying of the rebar
with bailing wire constitutes an assembly of the U.S. rebar
components (see, 19 CFR 10.16(a)).
HOLDING:
On the basis of the information provided and the applicable
ASTM product standards, tying the cut rebar lengths into rebar
mats with bailing wire exceeds an "alteration," within the
meaning of HTSUS subheading 9802.00.50, as the imported product
will be a new or different article from that which was exported.
However, allowances in duty may be made under HTSUS subheading
9802.00.80 for the cost or value of the U.S. components
comprising the tied rebar mats to be imported from Mexico, upon
compliance with the documentary requirements of 19 CFR 10.24
(copy enclosed).
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosure