DRA-1-09 CO:R:C:E 222235 C
Deputy Assistant Regional Commissioner
Regulatory Audit Division
U.S. Customs Service
Pacific Region
RE: Internal Advice Request; Substitution of Titanium Solids,
Chips and Turnings for Titanium Sponge; Stoichiometric
substitution; T.D. 82-36
Dear Sir:
This responds to your February 1, 1988, request for internal
advice concerning the referenced subject (DRA-2-O:R NT; February
1, 1988). The issue you raised was the following: Are titanium
alloy solids, chips and turnings the same kind and quality as
titanium sponge, such that substitution of the former for the
latter under T.D. 82-36 is permissible for drawback, when the
sought after substance in the solids, chips and turnings is not
only the titanium but also the alloying component (or
components)?
Customs has permitted the substitution of an alloy scrap for
an imported pure metal in a melt procedure, under T.D. 82-36,
when the scrap contains a quantity of the pure metal and it is
this component of the scrap that is sought after for the
production. Although the alloy scrap, such as titanium alloy
scrap, is not strictly the same kind and quality as the imported
pure metal, such as titanium sponge, the metal in the scrap is
the same as the imported metal, and to that extent, there is same
kind and quality. This construction necessarily disregards the
alloying component of the scrap which is not required for the
production process.
On the facts presented here, we understand that the scrap
(the solids, chips and turnings) is chosen and substituted not
only for its titanium content but also for its alloying
component(s). For example, if the desired finished product is to
be composed of titanium, vanadium and tin, the scrap chosen for
use in the production procedure will contain these alloying
components: vanadium and tin. Consequently, what results is the
substitution of an alloy scrap (the solids, chips and turnings) -
that is, titanium plus other components - for the imported pure
metal, and the construction that permits same kind and quality
under T.D. 82-36 breaks down. The inevitable conclusion is that
an alloy scrap, sought to be substituted for both its primary
metal and its alloying component(s), is not the same kind and
quality as the imported pure metal.
Attached, please find a copy of a memorandum of advisement
from the Technical Branch, Office of Laboratories and Scientific
Services. We are in agreement with the view expressed therein,
and we recommend that the foregoing interpretation of T.D. 82-36
be applied in determining the applicability of drawback in this
case.
Sincerely,
Marvin Amernick