CLA-2 RR:TC:SM 559492 KKV
TARIFF NO: 9801.00.60
District Director
U.S. Customs Service
San Francisco, CA 94105
RE: Application for Further Review of Protest No. 2809-95-100855; applicability of duty exemption under
HTSUS subheading 9801.00.60 to articles of jewelry
exported to Taiwan; HRL 067426; De Minimus sales
Dear Sir:
The above-referenced protest, timely filed on behalf of
Ms. Tien Lee Chao, d.b.a. Tien Lee Fine Pearl, concerns your
classification and duty assessment for articles of jewelry
exported to Taiwan and then returned. Protestant claims
that the articles at issue are eligible for a complete duty
exemption under subheading 9801.00.60, Harmonized Tariff
Schedule of the United States (HTSUS).
FACTS:
On September 13, 1994, Tien Lee Chao, d.b.a. Tien Lee
Fine Pearl, presented certain articles of jewelry to Customs
for registration. The CF (Customs Form) 4455 submitted gave
"use abroad" as the reason for exportation and contained an
alphabetical list of invoices describing the merchandise as
well as photocopied photographs depicting the articles of
jewelry to be registered. The CF 4455 was signed by Customs
and returned to the exporter. On September 23, 1994, the
entry subject to the protest was filed covering certain
articles of jewelry returned to the U.S. under subheading
9801.00.60, HTSUS, as well as certain cultured pearls
acquired abroad, under subheading 7116.10.1500. On January
20, 1995, the entry was liquidated as entered. Upon review
however, it was determined that the importer failed to state
the name of the show attended, or provide any other
documents in support of the entered classification under
subheading 9801.00.60, HTSUS. Accordingly, the entry was
reliquidated on April 7,
1995, with all articles of jewelry classified under
subheading 7113.19.5000, HTSUS, at a 6.5 percent duty rate.
ISSUE:
Whether certain articles of jewelry registered with
Customs prior to exportation from the U.S. to Taiwan for
display use at an exhibition are eligible for duty-free
treatment under subheading 9801.00.60, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.60, HTSUS, (formerly item 802.30,
Tariff Schedules of the United States (HTSUS)), provides for
the free entry of articles which are returned after having
been exported for temporary use abroad solely for exhibition
or use in connection with any public exposition, fair, or
conference, provided such articles are returned by or for
the account of the person who exported them.
The Customs Service has addressed the requirements of
subheading 9801.00.60, HTSUS, in several rulings. In
Headquarters Ruling Letter (HRL) 067426, dated December 8,
1981, medical equipment was exported to Canada for
exhibition and demonstration at a joint meeting of the
International Society of Hematology and the International
Society of Blood Transfusion. The meeting or conference was
open only to members of these two societies, and not to the
public at large. Therefore, it was found not to be a
"public" conference, within the meaning of item 802.30,
TSUS, and entry of the equipment under that provision was
precluded.
In HRL 221961 dated May 15, 1990, which was a response
to an internal advice request, a corporation exhibited
jewelry and semi-precious and precious gemstones at the Hong
Kong Watch and Jewelry Fair, and subsequently returned the
articles to the U.S. We held that because the primary
intention of the importer was to exhibit the goods at the
trade fair and return them to the U.S., entry of the goods
under subheading 9801.00.60, HTSUS, was not precluded. The
fact that a secondary objective of the importer was the
acquisition of future orders at the fair did not negate the
primary intention of the company at the time of exportation
to exhibit its wares. We found that the sole act of taking
future orders, without delivery of any goods at the show,
was not a sale of goods so as to preclude classification
under subheading 9801.00.60, HTSUS. This finding was
affirmed in HRL 222792 dated January 10, 1991, which was a
reconsideration of HRL 221961. We noted in HRL 222792 that
the trade fair's own rules prohibiting sales buttressed the
importer's argument that its intent was not to sell goods at
the fair.
In HRL 222792, Customs tangentially addressed the
"public" requirement of subheading 9801.00.60, HTSUS. Even
though the Hong Kong Watch and Jewelry Fair was allegedly
open only to members of the watch and jewelry trades,
Customs found no indication that the fair excluded the
general public. More specifically, we stated that no
evidence was presented, by way of brochures or other
tangible proof, that "if the general public showed up at the
fair and offered to pay admission (assuming one was needed)
they would be excluded." We stated that the general public
can be distinguished from those who belong to a private club
or association where admission is restricted to members
only.
In HRL 092277 dated December 9, 1968, machinery and
equipment was to be displayed by sales representatives at an
exposition held in conjunction with a nonprofit professional
association's convention in Canada, and subsequently was to
be returned to the U.S. A registration fee was charged for
the convention, and the association targeted its advertising
at its members and their guests. However, the association
stated that if any person interested in the displayed
equipment wished to attend the convention, he or she could
do so. Therefore, Customs ruled that the convention was
open to the "public" and was not a private sales exposition.
Provided the documentary requirements were met, i.e.,section
10.66, Customs Regulations (19 CFR 10.66), the equipment
would be eligible for duty-free treatment under item 802.30,
TSUS, upon its return to the U.S.
Examination of the record before us in this case reveals
little evidence concerning the nature of the event attended
by the Protestant in Taiwan. The only document submitted is
a copy of a letter from the Republic of China Overseas Trade
Development Council addressed to the Ministry of Finance,
Customs Bureau, which identifies Tien Lee Fine Pearl as a
participant in the 1994 Taipei International Exhibition of
Jewelry and Watches to be held September 15-18, 1994, and
requests that the Ministry facilitate customs and duty
procedures for the participant.
However, we have examined the photographs of the subject
merchandise which were submitted to Customs upon
registration of the articles prior to exportation.
Inasmuch as these photographs reveal that the merchandise
carried to the exposition consisted of a wide variety of
individual pieces rather than multiple identical pieces of
jewelry, they support the conclusion that the primary
purpose of the exhibition was to acquaint potential
purchasers with the range and quality of jewelry carried by
the Protestant. Although notations on the entry invoices
for the subject merchandise indicate that certain articles
may have been sold while outside the U.S., the total amount
of these sales is negligible in light of the value of the
merchandise exported and subsequently imported. It is our
determination that de minimus sales of merchandise at an
exposition whose primary function is to acquaint prospective
purchasers with the range and quality
of available goods, will not preclude the eligibility of
such merchandise for duty-free treatment under 9801.00.60,
HTSUS, upon its return to the United States.
HOLDING:
Where articles of jewelry were registered with Customs
prior to exportation from the U.S. for use at an exhibition,
whose primary function is to acquaint prospective purchasers
with the range and quality of available goods, de minimus
sales of the exported articles will not preclude the
eligibility of such merchandise for duty-free treatment
under 9801.00.60, HTSUS, upon its return to the United
States. Accordingly, with regard to the articles of jewelry
registered prior to exportation, the protest is granted.
In accordance with Section 3A(11)(b) of Customs
Directive 099 3550-065, dated August 4, 1993, Subject:
Revised Protest Directive, this decision, together with the
Customs Form 19, should be mailed by your office to the
Protestant no later than 60 days from the date of this
letter. Any reliquidation of the entry in accordance with
the decision must be accomplished prior to mailing of the
decision. Sixty days from the date of the decision the
Office of Regulations and Rulings will take steps to make
the decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act, and other
public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division