CLA-2 CO:R:C 555654 RA
Richard C. King, Esq.
Fitch, King and Caffentzis
116 John Street
New York, New York 10038
RE: Applicability of subheading 9802.00.60, HTSUS, to copper
tubing manufactured abroad and returned for further
processing
Dear Mr. King:
This is in response to your letters dated May 1, and 22,
1990, concerning the applicability of subheading 9802.00.60,
Harmonized Tariff Schedule of the United States (HTSUS), to
copper tubing manufactured abroad from U.S.-made cathodes and
processed into air conditioner condenser coils upon return.
FACTS:
The imported merchandise consists of seamless copper
tubing in coils produced abroad from U.S.-made copper
cathodes. After return to the U.S., the coiled tubing is
processed in an automatic machine which rerounds and
straightens the tubing. The product is then cut at a beveled
angle and bent into U-shaped articles known as "hairpins."
The "hairpins" are later combined with aluminum fins to make
"cores." The straight sections of the "hairpins" are expanded
to lock the fins in place and both ends are flared. The
"hairpins" are connected to various fittings by brazing and
the finished products are incorporated into air conditioning
units as condenser coils.
ISSUE:
Do the operations performed on the copper tubing in the
U.S. constitute "further processing" which will qualify the
imported merchandise for tariff treatment under subheading
9802.00.60, HTSUS?
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LAW AND ANALYSIS:
Subheading 9802.00.60, HTSUS, provides a partial duty
exemption for:
Any article of metal (as defined in U.S. note 3(d)
of this subchapter) manufactured in the United States
or subjected to a process of manufacture in the United
States, if exported for further processing, and if the
exported article as processed outside the United
States, or the article which results from the
processing outside the United States, is returned
to the United States for further processing.
Metal articles satisfying these statutory requirements may be
classified under this tariff provision with duty only on the
value of such processing performed outside the U.S., provided
there is compliance with the documentary requirements of
section 10.9, Customs Regulations (19 CFR 10.9).
In Headquarters Ruling Letter (HRL) 091396 dated July 15,
1969, we held that copper cathodes of U.S. manufacture which
were exported to a foreign country where they were made into
copper tubes of finished diameter were "further processed"
abroad, within the meaning of item 806.30, Tariff Schedules of
the United States (TSUS) (the precursor provision to
subheading 9802.00.60, HTSUS). Therefore, it only remains to
consider whether the domestic operations in the instant case
constitute "further processing" under the statute.
We have consistently held that in order to be considered
"further processing," some operation must be applied to the
metal which changes the shape or form of the metal or imparts
new and different characteristics which become an integral
part of the metal itself, such as machining, grinding,
drilling, threading, punching, forming, plating, and the like.
See C.S.D. 84-49, 18 Cust. Bull. 957 (1983). Processing
performed on an already completed article, incident to using
it for the purpose intended, is not sufficient to constitute
"further processing." Intelex Systems, Inc. v.United States,
59 CCPA 138, C.A.D. 1055 (1972). However, legislative history
and judicial authority do not support a highly restrictive
interpretation of the manufacturing operations necessary to
qualify as "further processing." The Firestone Tire & Rubber
Company v. U.S., 71 Cust.Ct. 63, C.D. 4474 (1973).
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In HRL 067516 dated October 16, 1981, we held that steel
bar stock made abroad from U.S.-made ingots was "further
processed" upon return when it was machine straightened and
cut to a specific length for final use. In HRL 058832 dated
March 1, 1979, we stated that the bending of alloy tubes into
"U" shapes and welding the ends closed would be sufficient to
satisfy the domestic "further processing" requirement. In
view of these holdings, we are of the opinion that the
bending, straightening, and cutting operations performed on
the subject copper tubing in the U.S. constitute "further
processing" and qualify the importation for the partial duty
exemption in subheading 9802.00.60, HTSUS.
HOLDING:
Imported copper tubing made abroad from U.S.-made ingots
which, when returned to the U.S., is bent into "U" shapes,
straightened, and cut to length satisfies the foreign and
domestic "further processing" requirements of subheading
9802.00.60, HTSUS. Therefore, the tubing is entitled to the
partial duty exemption under this tariff provision, upon
compliance with documentation requirements of 19 CFR 10.9.
Sincerely,
John Durant, Director
Commercial Rulings Division