CLA-2 CO:R:C:S 555865 SER
Mr. Donald H. Huber
Sr. Specialist- Customs
General Electric Business Services
P.O. Box 06500
Fort Meyers, FL 33906-6500
RE: Applicability of duty exemption available under HTSUSA
subheading 9802.00.50 to halogen lightbulbs subjected to a
bending operation in Mexico; alteration; Guardian v.
United States, Dolliff v. United States, U.S. v. Richardson
Dear Mr. Huber:
This is in reference to your letter of January 23, 1991,
requesting a ruling concerning the applicability of subheading
9802.00.50, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), to halogen lightbulbs.
Halogen bulbs, manufactured in the U.S., are sent to Mexico
where, in one case, one of its four metal leads is bent to
approximately a 90 degree angle, or in another where two leads
are bent. Upon return to the U.S., the bulb is incorporated into
a automobile headlamp.
Whether the bulbs will be entitled to the partial duty
exemption available under subheading 9802.00.50, HTSUSA, when
imported into the U.S.
LAW AND 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
HTSUSA subheading 9802.00.50 provided the foreign operation does
not destroy the identity of the exported articles or create new
or different articles through a process of manufacture.
Accordingly, entitlement to this tariff treatment is precluded
where the exported articles are incomplete for their intended
purpose prior to the foreign processing. Dolliff & Company Inc.,
v. United States, 455 F.Supp. 618 (1978), 599 F.2d 1015 (1979).
Articles entitled to this partial duty exemption are
dutiable only upon the cost or value of the foreign repairs or
alterations when returned to the U.S., provided the documentary
requirements of section 10.8 Customs Regulations (19 CFR 10.8),
In applying this provision, the courts, in several cases,
have focused upon whether the exported article is incomplete or
unsuitable for its intended use prior to the foreign processing,
or whether the foreign processing creates a new and different
article in comparison to the exported article. See e.g.,
Dolliff, and Guardian Industries Corp. v. United States, 3 CIT 9
(1982), United States v. J.D. Richardson Company, 36 CCPA 15,
C.A.D. 390 (1948), cert. denied, 336 U.S. 936 (1949).
In the Guardian case, annealed glass was sent to Canada for
heat treatment, producing a tempered glass which was then
returned to the U.S. The court concluded that the exported
articles of raw annealed glass were not "completed articles"
since they were entirely unsuitable for their intended use in the
U.S. as sliding glass patio doors. Additionally, the court, in
determining whether the articles were "complete", looked to see
if the tempering of the annealed glass transformed the glass in
name, use, performance characteristics and tariff
classification. An examination of the court's holding can be
applied to the halogen lightbulbs at issue in this ruling.
The court in Guardian first determined whether there was a
change in use and performance characteristics between the
annealed glass sent to Canada and the tempered glass returned to
the U.S. Annealed glass has significantly different
characteristics than tempered glass. In the tempering process,
the outside of the glass cools faster than the inside and this
differential cooling rate ultimately results in a difference in
the stresses in the core of the glass and those on the outside
surface of the glass. The purpose of subjecting glass to an
annealing operation is to reduce internal stresses in the glass.
This allows annealed glass to be cut, drilled, ground and seamed,
whereas the tempered glass cannot be subjected to these
operations. As a result of these differences, the annealed
glass, when broken, will break into large irregular pieces with
sharp jagged edges, whereas tempered glass will shatter into many
small and relatively harmless pieces of glass.
The different characteristics of the annealed and tempered
glasses also affect their uses. As stated above, only annealed
glass can be cut, drilled, ground and seamed, and, therefore,
adapted to a variety of uses. However, to be used as glass
patio doors the glass must, by regulation and by standard
practice, undergo a tempering process. Therefore, the annealed
glass is entirely unsuitable for its intended purpose when it is
exported from the U.S., and upon its return as tempered glass it
is a new and different article in comparison to the exported
Applying the rationale utilized in Guardian, the use of the
halogen lightbulbs does not change after the foreign processing.
Upon exportation from the U.S. the bulbs are intended for use in
automobiles headlights, and they are suitable for that use at the
time of exportation. Upon return to the U.S. they have retained
this sole use. In addition, the bending operation only slightly
changes the connection configuration of the bulbs, but does not
change their basic structural characteristics.
The courts in Guardian and Richardson also looked to a
change in tariff classification as an indication of whether the
article exported from the U.S. was a complete article. In
Guardian the tempered glass and annealed glass are provided for
in separate provisions, as were the exported rims and returned
flanged rims discussed in Richardson. After examining the sample
halogen lightbulbs you submitted, we note that there would be no
change in tariff classification from the bulbs exported from the
U.S. and those which are returned after the bending operation in
Mexico. This would support the conclusion that the halogen
lightbulbs are complete articles upon exportation from the U.S.,
and that the operations in Mexico do not create a new article.
The court in Guardian also stated that the two glass
products are known by different names. The glass before it is
tempered is described as annealed glass and is known in the trade
as "float glass", whereas the tempered glass is known in the
trade as "tempered glass" or "safety glass." Guardian at p. 15.
The halogen bulbs at the time of importation into Mexico and upon
return to the U.S. have no change in name, and no
differentiation is recognized in the industry between the bulbs.
In summary, the bending operation in Mexico does not
transform the lightbulbs in name, use, performance
characteristics or tariff classification. Consideration of all
of these factors leads to the conclusion that the halogen bulbs
are complete articles upon exportation to Mexico, and that the
bending operation constitutes an alteration within the meaning
of subheading 9802.00.50, HTSUSA.
Based on the information submitted, it is our opinion that
the foreign bending operation performed on one or two of the
metal leads of the halogen lightbulbs constitutes an alteration
within the meaning of subheading 9802.00.50, HTSUSA. Therefore,
the lightbulbs may be entered under this tariff provision with
duty only on the cost or value of the bending operation in
Mexico, upon compliance with the documentary requirements of 19
John Durant, Director
Commercial Rulings Division