CLA-2 RR:TC:SM 559719 DEC

Tariff No.: 9801.00.10

Area Director of Customs
JFK Airport Area - Building 178
Jamaica, New York 11430

RE: Application for Further Review of Protest No. 1001-95-110602 concerning denial of duty-free entry of automobile parts; Subheading 9801.00.10, HTSUS; T.D. 94-47; 19 CFR 10.1; Mi-Scott International Ltd., v. United States, 13 CIT 1046 (1989)

Dear Sir:

This is in reference to Protest No. 1001-95-110602 and the Application for Further Review dated December 14, 1995, timely submitted by Trans-Border Customs Services, Incorporated, on behalf of Imperial Trading Limited contesting the denial of an entry under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to automobile parts.

FACTS:

The importer, Imperial Trading Limited, claims that the articles that are the subject of this protest were purchased abroad, but manufactured in the United States. The importer further states that it was unable to obtain a manufacturer's affidavit attesting to the claim of United States manufacture. The importer requests that Customs rely on its statement that since the articles are marked "Made in USA," as are the containers, that we allow the merchandise to receive duty-free treatment under subheading 9801.00.10, HTSUS, as United States goods exported and returned without having been advanced in value or improved in condition. In support of its request, the importer has submitted descriptive literature about the articles from the manufacturer, photocopies of the containers, and an actual sample of the merchandise

which is marked "Made in USA." In addition, the importer submitted a copy of a letter from Innopex Limited signed by its president. No entry number, date, or port is referenced in the letter. The body of the letter does not provide any specific identifying language with respect to the articles that are the subject of this protest. The submitted invoicing documentation generally describes the articles as 48,192 "auto parts." The information contained in the invoices does not disclose the types of parts nor do the invoices provide any information in support of the claim that the articles are of United States origin.

ISSUE:

Whether the automobile parts are eligible for duty-free treatment under subheading 9801.00.10, HTSUS.

LAW AND ANALYSIS:

Subheading 9801.00.10, HTSUS, provides for the free entry of products of the United States that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1) are satisfied. While some change in the condition of the product while it is abroad is permissible, operations which either advance the value or improve the condition of the exported product render it ineligible for duty-free entry upon return to the U.S. Border Brokerage Company, Inc. v. United States, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970). While an article that is marked "Made in the USA" supports the assertion that the article is a product of the United States, such marking alone is not a basis upon which duty-free entry under subheading 9801.00.10, HTSUS, may be granted. Customs also requires additional evidence that supports a port director's ability to trace the exportation and subsequent importation of the article as well as documentation supporting the importer's claim that the article was not advanced in value or improved in condition abroad.

Section 10.1(a) outlines the necessary documentation required for duty-free entry under subheading 9801.00.10, HTSUS. In order to eliminate procedural burdens and delays and duplications of information collection, Customs removed and revised certain paragraphs within section 10.1 to eliminate the use of Customs Form 3311, Declaration for Free Entry of Returned American Products, for purposes of duty-free treatment of products of the United States which are returned without having been advanced in value or improved in condition while abroad, as provided in subheading 9801.00.10, HTSUS. As a consequence of the elimination of Customs Form 3311 for purposes of this tariff provision, Customs amended section 10.1. More specifically,

section 10.1(a) requires that the foreign shipper make a declaration that the articles claimed to be free of duty under subheading 9801.00.10, HTSUS, were exported from the United States and that they were returned without having been advanced in value or improved in condition while abroad. The declaration is to include the port from which the goods were exported and the approximate date. In addition, section 10.1(a) also requires that "...the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry..." sign a declaration that the foreign shipper's declaration is true and provide the name and location of the manufacturer of the articles. Section 10.1 was further amended to provide that where the returned article has a value of $1,250 or more and is not clearly marked with the name and address of the U.S. manufacturer, the port director may require such other documentation or evidence as may be necessary to substantiate the claim for duty-free treatment. T.D. 94-47. See 19 CFR 10.1(a) for the complete requirements.

Section 10.1(d), provides that if the port director is reasonably satisfied, based on the nature of the articles or production of other evidence, that the articles are imported in circumstances meeting the requirements of subheading 9801.00.10, HTSUS, the port director may waive the requirements of producing the documents specified above. While it is well settled that compliance with mandatory regulations is a condition precedent to a claim for the duty-free entry of merchandise (see Mi-Scott International Ltd., v. United States, 13 CIT 1046 (1989)), the port director at the port of entry may waive production of this documentation if he is reasonably satisfied that the circumstances and conditions of 19 CFR 10.1(d) are present and met. Thus, the decision to grant such a waiver rests with the port director.

In this case, the port director has denied classification under 9801.00.10, HTSUS, on the basis that there is a total lack of physical and documentary proof that the imported automobile parts are of United States origin. We concur, as there is no documentation in the record before us that supports that the articles that were imported are United States-origin goods. Neither the declaration from the foreign shipper nor a declaration by the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry was submitted as required by 19 CFR 10.1(a). The information contained in the letter from the president of Innopex Limited makes no connection between the articles that are the subject of this protest and the claim that they are United States goods exported and returned. The undated letter does not contain even a vague reference to the automobile parts in question -- no entry number is identified, and no description of the articles is provided. We are not persuaded that this letter should be given any evidentiary value in light of the fact that it lacks any correlation to the entry at issue. Consequently, we find that the parts are not entitled to subheading 9801.00.10, HTSUS, treatment.

HOLDING:

On the basis of the information submitted, we are of the opinion that the automobile parts at issue are ineligible for duty-free treatment under subheading 9801.00.10, HTSUS. No documentation has been presented to establish that these articles are products of the United States that were not advanced in value or improved in condition while abroad. Accordingly, this protest should be denied in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 4, 1993, Subject: Revised Protest Directive, this decision should be attached to Customs Form 19, Notice of Action, to 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,
Tariff Classification Appeals
Division