RR:CR:SM 561171 RSD/GOB
Area Port Director
United States Customs Service
9901 Pacific Highway
Blaine, Washington 98230
RE: Application for Further Review of Protest Number 3004-97-100398 concerning the claim for duty free treatment of aircraft parts and other items
Dear Sir:
This is in response to your memorandum dated September 28, 1998 forwarding the application for further review of the above-referenced protest filed by Border Brokerage Co., Inc. on behalf of Avsco Service Corporation (the “protestant”).
FACTS:
Protestant is a civil aircraft supplier with a branch operation located at the Vancouver International Airport, in Vancouver, British Columbia, Canada. In the protested entry, various aircraft parts and other items were shipped from Avsco Aviation Service Corp. in Richmond, British Columbia, to Avsco Atlanta, College Park, Georgia. The goods were initially entered duty free as U.S. goods returned under subheading 9801.00.10 Harmonized Tariff Schedule of the United States (HTSUS). However, your office liquidated the entry under subheading 9030.39.00, HTSUS, at a duty rate of 3.6%. By facsimile transmission of December 15, 1998, the protestant has submitted an undated blanket certification made by the former Director of Operations of Avsco Aviation with respect to the subject entry.
Protestant contends that the merchandise is entitled to duty-free treatment under subheading 9801.00.10, HTSUS. In addition, protestant also claims that the goods are eligible for duty-free entry as civil aircraft parts under the Civil Aircraft Agreement.
ISSUES:
Whether the subject merchandise qualifies for duty-free entry under the Civil Aircraft Agreement.
Whether the goods are eligible for duty-free entry as American goods returned under subheading 9801.00.10, HTSUS.
LAW AND ANALYSIS:
CIVIL AIRCRAFT Agreement
The protestant claims that “... the goods may be eligible for duty free entry as civil aircraft parts (see civil aircraft statements of invoices provided for entry).”
The Agreement on Trade in Civil Aircraft (the “Civil Aircraft Agreement” or “CAA”) was implemented by Title VI, "Civil Aircraft Agreement" of the Trade Agreements Act of 1979 (Sec. 601, P.L. 96 39, 93 Stat. 144, 96th Cong., 1st Sess. 1979), effective January 1, 1980. Pursuant to the Civil Aircraft Agreement, General Note 6 of the Harmonized Tariff Schedule of the United States (“HTSUS”) provides for the duty-free treatment of civil aircraft parts. General Note 6 was amended by section 12 of the Miscellaneous Trade and Technical Corrections Act of 1996, Pub. L. 104-295, 110 Stat. 3514 (October 11, 1996). Subsection (a) of General Note 6 provides:
(a) Whenever a product is entered under a provision for which the rate of duty “Free (C)” appears in the “Special” subcolumn and a claim for such rate of duty is made, the importer--
(i) shall maintain such supporting documentation as the Secretary of the Treasury may require; and
(ii) shall be deemed to certify that the imported article is a civil aircraft, or has been imported for use in a civil aircraft and will be so used.
The importer may amend the entry or file a written statement to claim a free rate of duty under this note at any time before the liquidation of the entry becomes final, except that, notwithstanding section 505(c) of the Tariff Act of 1930 (19 U.S.C. 1505(c)), any refund resulting from any such claim shall be without interest.
The subject entry was filed on November 8, 1996, subsequent to the promulgation of current General Note 6. Accordingly, General Note 6, as excerpted above, controls here.
The protestant has submitted CAA certifications with respect to some, but not all, of the subject invoices. However, General Note 6 does not require that a certification be presented to Customs. See General Note 6(a)(ii) - “shall be deemed to certify ...” Accordingly, the fact that the protestant has not submitted certifications with certain of the invoices is not fatal to its protest with respect to those invoices.
The protestant did not enter the large majority of the subject merchandise under “a provision for which the rate of duty ‘Free (C)’ appears in the ‘Special’ subcolumn” as specified in General Note 6(a). It entered the large majority of the merchandise under subheading 9801.00.10 That merchandise was reclassified by Customs to subheading 9030.39.00, which is a provision for which the rate of duty “Free(C)” appears in the Special subcolumn. We note that such a failure on the part of an importer was not fatal to the importer’s cause in Gulfstream Aerospace Corp. v. United States, 981 F. Supp. 654 (CIT 1997), and we do not consider it fatal to the protestant’s claim here. See also Ruling 225432 dated July 16, 1998.
We note that the many invoices involved in the subject entry pertain to three categories of merchandise for the purpose of this protest: 1. aircraft parts which are eligible for duty-free treatment under the CAA, i.e., aircraft parts classified in a provision for which the rate of duty “Free (C)” appears in the ‘Special’ subcolumn as specified in General Note 6(a) ; 2. aircraft parts which are not eligible for duty-free treatment under the CAA, i.e., aircraft parts which are not classified in a provision for which the rate of duty “Free (C)” appears in the ‘Special’ subcolumn as specified in General Note 6(a); and 3. items which are not civil aircraft or parts thereof, and therefore are not eligible for duty-free treatment under the CAA.
We find that aircraft parts on the subject invoices which are properly classified in provisions for which the rate of duty “Free (C)” appears in the ‘Special’ subcolumn as specified in General Note 6(a) are eligible for duty-free treatment under the CAA. Accordingly, the protest is granted with respect to such items. The protestant should be given the opportunity to demonstrate which articles so qualify. See Ruling 225432 dated July 16, 1998.
We find that the following items are not eligible for duty-free treatment under the CAA: (a) items which are not aircraft parts; and (b) aircraft parts which are not properly classified in provisions for which the rate of duty “Free (C)” appears in the ‘Special’ subcolumn as specified in General Note 6(a). Accordingly, the protest is denied with respect to such items.
American Goods Returned
Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. 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, 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).
The pertinent documents required by 19 CFR 10.1, are a declaration from the foreign shipper that the articles were exported from the U.S. and that they are returned without having been advanced in value or improved in condition, and a declaration from the owner, importer, consignee, or agent that the articles were manufactured in the U.S. and that the articles were exported from the U.S. without benefit of drawback.
The record reflects that the only document submitted by the protestant in support of the subheading 9801.00.10, HTSUS claim is a “Declaration of Manufacturer/Exporter” signed by the distribution manager of Avsco Service Corp. which states that the “items were made or assembled in the U.S. by multiple vendors.” According to your office, this statement is “vague and self-serving” and is insufficient proof of the U.S. origin of the articles subject to the protest.
In this instance, protestant has failed to present any evidence to support its claim that the merchandise was in fact produced in the United States. The record
does not contain any documentation from the manufacturer or other sources indicating the actual origin of the merchandise. Accordingly, we cannot conclude that the merchandise is a product of the United States. Therefore, we find that the goods are ineligible for duty-free entry as American good returned under subheading 9801.00.10, HTSUS.
HOLDING:
The protest is GRANTED with respect to aircraft parts on the subject invoices which are properly classified in provisions for which the rate of duty “Free (C)” appears in the ‘Special’ subcolumn as specified in General Note 6(a). The protestant should be given 30 days from the date of mailing of this ruling to the protestant to demonstrate to your office which items so qualify.
The protest is DENIED with respect to the following items which are not eligible for duty-free treatment under the CAA: (a) items which are not aircraft parts; and (b) aircraft parts which are not properly classified in provisions for which the rate of duty “Free (C)” appears in the ‘Special’ subcolumn as specified in General Note 6(a).
The protest is also DENIED with respect to the claim for duty-free entry as American goods returned under subheading 9801.00.10, HTSUS.
Sixty days from the date of this decision, the Office of Regulations & Rulings will take steps to make this decision available to Customs personnel, and to the public via the Customs Home Page on the World Wide Web, the Freedom of Information Act, and other public distribution channels.
Sincerely,
John Durant, Director
Commercial Rulings Division