CLA-2 CO:R:C:S 557007 MLR
District Director
477 Michigan Ave.
Detroit, Michigan 48226
Attn: Daniel Churan, Import Specialist
RE: Applicability of duty exemption under HTSUS subheading
9802.00.50 to Irganox 1076FF, B-225FF, B-835FF; Tinuvin
770FF; powdered/solid form; granular form; antioxidant;
stabilizer; mechanical compaction.
Dear Sir:
This is in reference to a ruling request we received from
CIBA-GEIGY Corporation, dated November 9, 1992, concerning the
eligibility of Irganox 1076FF, Irganox B-225FF, Irganox B-835FF,
and Tinuvin 770FF for a partial duty exemption under subheading
9802.00.50, Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
CIBA-GEIGY exports Irganox 1076, Irganox B-225, Irganox B-
835, and Tinuvin 770, all manufactured in the U.S., to CIBA-
GEIGY Canada. In Canada, the products which are either in
powdered form (Irganox 1076 and Tinuvin 770), or in solid form
(Irganox B-225 and B-835) are processed into granular form by a
mechanical compaction process. The product is fed into a roller
compaction unit which consists of two cooled cylindrical rollers,
where it is compressed between the rollers under high pressure
into flakes. The flakes are then reduced in size by a flake
breaker and then separated to achieve the final desired granular
size. It is stated that there is no change in the chemical
composition of the products other than physical, and their use is
interchangeable. Upon completion of the processing, the products
are returned to the U.S. with the suffix of "FF" (meaning "Free
Flow") added to their description
The products' composition and use are as follows:
1. Irganox 1076 and Irganox 1076FF are both composed of
Octadecyl 3,5-di-tert-butyl-4-hydrocinnamate, Cas. Reg.
#2082-79-3, and are used interchangeably as an antioxidant
and thermal stabilizer in rubber and plastic applications.
2. Irganox B-225 and Irganox B-225FF, are both composed of a
mixture of Tetrakis(methylene(3,5-di-tert-butyl-4-
hydroxyhydrocinnamate)methane, Cas. Reg. #6683-19-8, and
Tris(2,4-di-tert-butylphenyl) phosphite, Cas. Reg. #31570-
04-4, and are used as an antioxidant/stabilizer.
3. Irganox B-835 and Irganox B-835FF, are both composed of a
mixture of Thiodiethylene Bis(3,5-di-tert-butyl-4-
hydroxyhydrocinnamate), Cas. Reg. #41484-35-9, and
Distearyl-Beta,Beta'-Thiopropionate, Cas. Reg. #693-36-7,
and are used as a stabilizer.
4. Tinuvin 770 and Tinuvin 770FF, are both composed of
Bis(2,2,6,6-tetramethyl-4-piperidyl)sebacate, Cas. Reg.
#52829-07-9, and are used as a hindered amine light
stabilizer.
ISSUE:
Whether the compaction process performed on the U.S.-origin
products in Canada, constitutes an alteration, thereby entitling
them to the partial duty exemption available under subheading
9802.00.50, HTSUS, when returned to the U.S.
LAW AND ANALYSIS:
Articles returned to the United States 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 subheading 9802.00.50, HTSUS, provided the foreign
operation does not destroy the identity of the exported articles
or create new or commercially different articles through a
process of manufacture. See A.F. Burstrom v. United States, 44
CCPA 27, C.A.D. 631 (1956), aff'g C.D. 1752, 36 Cust. Ct. 46
(1956); Guardian Industries Corp. v. United States, 3 CIT 9
(1982). Accordingly, entitlement to this tariff treatment is
precluded where the exported articles are incomplete for their
intended purpose prior to the foreign processing and the foreign
processing operation is a necessary step in the preparation or
manufacture of finished articles. Dolliff & Company, Inc. v.
United States, 455 F. Supp. 618 (CIT 1978), aff'd, 599 F.2d 1015
(Fed. Cir. 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), are satisfied.
We have held in Headquarters Ruling Letter (HRL) 555740
dated May 28, 1991, that formulation and granulation operations
performed on a herbicide in France to eliminate the product's
powdery consistency which made the chemical difficult to use,
constituted an acceptable alteration within the meaning of
subheading 9802.00.50, HTSUS. We found that the product in its
condition upon exportation was complete for its intended use as a
herbicide, and, in fact, could have been marketed within the
agricultural industry in that condition. Furthermore, the
formulation process abroad did not alter the chemical composition
or identity of the herbicide, nor did it significantly change the
quality or character of the product inasmuch as the herbicide
retained its weed killing properties. See also HRL 556320 dated
February 3, 1992, (holding that formulation and granulation
operations performed on U.S.-origin herbicide in France
constituted an acceptable alteration within the meaning of
subheading 9802.00.50, HTSUS), and HRL 085216 dated October 27,
1989, (where the sifting, magnetic removal of tramp iron, and
repackaging of U.S. raw and refined sugar in Canada, constituted
an alteration under this subheading).
In HRL 556616 dated June 16, 1992, a herbicide in a water
dispersible granule was exported to France for incorporation into
water-soluble film which is a highly specialized plastic,
designed for compatibility with agricultural chemical and
applications technology. It was held that the incorporation of
the U.S.-origin herbicide in water-soluble film in France,
constituted an acceptable alteration within the meaning of
subheading 9802.00.50, HTSUS, because this process did not change
the chemical structure or use of the product, the identity and
properties of the herbicide remained intact, and the U.S.-
manufactured herbicide was sold and could be used in its pre-
processed form. [In response to a question posed by your office,
whether the products at issue in this case may qualify for the
duty exemption under subheading 9801.00.10, HTSUS (which provides
for the free entry of U.S. products that are exported and
returned without having been advanced in value or improved in
condition by any means while abroad), we note that the herbicide
considered in HRL 556616, did not qualify for this duty exemption
when returned from France. It was stated that as a result of the
operation, the plastic pouch became an integral part of the
herbicide and the dispersal process; and the incorporation of the
herbicide in pre-measured, sealed, water-soluble packets enhanced
the value and condition of the herbicide by facilitating its
use.]
With regard to the facts presented and consistent with the
cases above, we are of the opinion that the compaction process
which converts the products from their powdered/solid form into
granular form, constitutes an acceptable alteration within the
meaning of subheading 9802.00.50, HTSUS. As in HRL 555740, the
processes performed in Canada do not change the chemical
composition of the products, and the products, before and after
compaction, are used interchangeably.
HOLDING:
On the basis of the information submitted, we find that the
compaction process which converts the products from
powdered/solid form into granular form in Canada, constitutes an
alteration within the meaning of subheading 9802.00.50, HTSUS.
Therefore, the products are entitled to classification under this
tariff provision with duty to be assessed only on the cost or
value of the operations performed in Canada, upon compliance with
the documentary requirements of 19 CFR 10.8. This ruling affects
only those entries for which liquidation is not final.
Sincerely,
John Durant, Director
Commercial Rulings Division