RR:TC:SM 560418 DLD
Port Director
U.S. Customs Service
10 Causeway Street, Suite 603
Boston, MA 02222-1059
RE: Decision on Application for Further Review of Protest No.
0401-96-100521. Subheading
9810.00.60, HTSUS: Duty Free Treatment of Scientific Instruments.
Dear Sir:
This protest was filed against your decision in the
liquidation as dutiable of laser smoke obscuration
instrumentation, carbon monoxide and carbon dioxide analysis
instrumentation imported from the United Kingdom by Worcester
Polytechnic Institute.
FACTS:
Worcester Polytechnic Institute (WPI) placed an order on
June 2, 1995, with a British manufacturer for laser smoke
obscuration instrumentation, carbon monoxide and carbon dioxide
analysis instrumentation. The device, characterized as a Large
Scale Oxygen Depletion Instrument and Ducting apparatus, and
hereafter referred to as a "room calorimeter", is a large console
made up of a series of individual components. It is used to
determine certain fire properties from a substance, object or
material. The device was entered on December 12, 1995. WPI
filed an application for duty-free entry of a scientific
instrument or apparatus under subheading 9810.00.60, HTSUS, on
June 27, 1996. The application was denied on September 23, 1996,
on the following grounds:
It is our determination that the laser smoke
obscuration instrumentation, carbon monoxide and carbon
dioxide analysis instrumentation is not eligible for
duty-free treatment inasmuch as there is the intention
to use the instrumentation for commercial purposes
within the meaning of the governing regulations. In
response to our query of June 28, 1996, in which we
asked whether there would be any use of the importation
by, or for the benefit of, any commercial entity, the
response was, in part:
The purpose of this instrument is to enable
academic research, most particularly in support of
master's theses and doctoral dissertations. It is
anticipated that some of this academic research
will receive financial support from off-campus
sponsors. Most of the off-campus sponsors would
be government agencies although some may be for-profit corporations or trade associations. It is
also possible that some secondary activities may
involve testing for government agencies or for-profit corporations or trade associations. In
this sense, the instrument could be used for
the benefit of a commercial entity.
Pursuant to subsection 301.4(a)(3) of the joint
regulations of the Department of Commerce and the
Department of the Treasury (15 CFR 301.4(a)(3)), the
instrument which is the subject of the application must
be intended for the exclusive use of the applicant
institution and must not be intended to be used for
commercial purposes. The running of tests for the
private sector is consid-
ered commercial use of the instrumentation of the
application. Accordingly, the
laser smoke obscuration instrumentation and carbon
monoxide and carbon dioxide analysis instrumentation
may not obtain duty-free treatment under subheading
9810.00.60, HTSUS.
Accordingly, the entry was liquidated as dutiable on September
23, 1996. A protest was timely filed on November 7, 1996, with
Boston Customs. The protest was subsequently forwarded to
Customs Headquarters for further review pursuant to 19 CFR
174(c). This is the response of Customs Headquarters to the
request for further review.
ISSUE:
Does laser smoke obscuration instrumentation, carbon
monoxide and carbon dioxide analysis instrumentation qualify as a
scientific instrument or apparatus under subheading 9810.00.60,
HTSUS?
LAW AND ANALYSIS:
The relevant portion of the regulations pertaining to the
denial was 15 CFR 301.4(a)(3), which states that in determining
the eligibility of the instrument of the application for duty-free entry under subheading 9810.00.60, HTSUS, the following
criteria shall be used by the Commissioner of Customs or his
designee. Customs shall determine:
Whether the instrument which is the subject of the
application is intended for the exclusive use of the
applicant institution and is not intended to be used
for commercial purposes. For the purposes of this
section, commercial uses would include, but not
necessarily be limited to: distribution or sale of the
instrument by the applicant institution; any use by, or
for the primary benefit of, a commercial entity; or use
of the instrument for demonstration purposes in return
for a fee or other valuable consideration. In making
the above determination, the Commissioner may consider,
among other things, whether the results of any research
to be performed with the instrument will be fully and
timely made available to the public. For the purposes
of this section, use of an instrument for the treatment
of patients is considered noncommercial. If any of the
Commissioner's determinations is in the negative,
the application shall be found to be outside the scope
of the Act [Public Law 89-651] and shall be returned to
the applicant with a statement of the reason(s) for
such findings. [Emphasis added.]
The protest argues that "even though there is a possibility
that some corporate sponsorship may materialize, the results of
all research efforts are published and are available to the
public." The availability of the results of any research to be
performed with the instrument or apparatus is a factor which
weighs toward approval of the application (15 CFR 301.4(a)(3)).
The response on the application to item 7.C., pertaining to
uses for clients or persons who are not students or personnel of
WPI stated that "it is anticipated that some limited commercial
testing services will be provided to consulting engineers and
others. To date, one such project has been done." On August l,
1997, in the course of conducting the further review of the
protest, a query was sent to WPI asking whether, in the period
from the importation in December 1995, to the present, there had
been any commercial use of the room calorimeter. On September
11, 1997, WPI responded that there had been one instance of the
testing of materials for a for-profit company.
In view of the statements by WPI subsequent to the
application that during the two years since the importation of
the room calorimeter there has been only one instance of testing
for a for-profit entity and that "the results of all research
efforts are published and are available to the public", the room
calorimeter is considered to qualify for duty-free entry under
application item 7.C., pertaining to commercial use as well as
the other requirements necessary for Customs
approval for duty-free treatment under subheading 9810.00.60,
HTSUS. However, WPI should be advised that any further testing
for commercial entities or any other commercial use within the
remaining three years of the five years following entry would
require WPI to pay the duty on the room calorimeter which would
otherwise have been due (See 15 CFR 301.4(a)(3), 15 CFR 301.9(b),
15 CFR 301.9(c.)).
Accordingly, Docket Number 97-089 was assigned to the duty-free application on October 23, 1997, signifying Customs
approval. The application was then forwarded to the Department
of Commerce for their review and determination. The Department
of Commerce approved the application on January 28, l998.
HOLDING:
The subject instrumentation is not intended for commercial
purposes, and the duty-free application has now been approved by
both Customs and the Department of Commerce. Accordingly, the
protest should be allowed in full.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, a copy of this decision should be attached to the
Customs Form 19 and mailed by your office to the protestant as
part of the notice of action on the protest 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