CLA-2-85:RR:NC:MM:109 I83960
Mr. Thomas W. Phalen
345 Encinal Street
P.O. Box 635
Santa Cruz, CA 95060
RE: The tariff classification of foreign merchandise (telephone and telephone headset) which was imported into the United States, subsequently exported to Mexico for cleaning, testing, repackaging, refurbishing and/or repair and re-imported into the United States.
Dear Mr. Phalen:
In your letter dated July 1, 2002, you requested a tariff classification ruling.
The merchandise at issue is described in your letter as a Model T100-2 telephone and an LCAP telephone headset. Both of these products were manufactured in Korea and shipped directly to your factory in Tijuana, Mexico, where they were packaged for shipment to Plantronics, Inc. in the United States. The T100-2 telephone (Part # 43958) was imported into the United States under tariff number 8517.19.8070. The LCAP telephone headset (Part # 44990) was imported into the United States under tariff number 8518.30.2000. Duty was paid on both items upon original importation into the United States.
The T100-2 telephone and LCAP telephone headset are shipped to distributors in the USA by Plantronics, Inc. and will be returned by the distributor to Plantronics, Inc. without being advanced in value by the distributors. The returned product is subsequently sent to Plantronic’s Tijuana factory for repair. Plantronics, Inc. does not do any repair in the United States. It merely records the returned merchandise and when a sufficient amount of returns is collected ships these products to Mexico for evaluation and repair, if necessary. Your letter claims that Plantronics, Inc. does not file for duty drawback on these products upon exportation to Mexico.
After the Mexican factory receives these products they are tested to see if they work. The products that work are cleaned and repackaged. In some cases, the outer plastic cover of the product is replaced because it has been scratched. The products that do not work, but can be fixed are repaired in a process where the individual units do not lose their individual identity. In some instances, a new microphone or speaker is placed in the individual unit or wires replaced or lose connections fixed. The work performed in Mexico is done to bring the goods up to the working standard of the products.
When the T100-2 telephone and LCAP telephone headset is shipped back to the United States they are not sold as new units. They carry an “RV” after the part number to indicate that these units were repaired items. These refurbished/repaired items are held by Plantronics, Inc. and are exchanged for identical products that are returned as defective by their distributors in the United States.
Your inquiry asked about the applicability of HTSUS subheading 9802.00.5060 to the re-imported T100-2 telephone and LCAP telephone headset. You state in your letter that the process of testing for workability, cleaning and repackaging, replacement of the outer plastic cover, if scratched, repair process, or substitution of a new microphone, speaker or replacement of wires, tightening of lose connections does not change the telephone or telephone headset, nor does it impart a new and different article of commerce.
Under HTSUS subheading 9802.00.5060 articles exported from and returned to the U.S., after having been advanced in value or improved in condition by repairs or alterations outside the U.S., may qualify for a duty exemption, 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.
In its condition upon exportation from the U.S. the T100-2 telephone and LCAP telephone headset maintains the essential character of a telephone and telephone headset. Neither the testing, cleaning, repackaging, refurbishing process nor repair operation conducted in Mexico changes the identity or character of the telephone or telephone headset, and no new article of commerce will be created. The telephone and telephone headset are merely tested, cleaned, repackaged, refurbished, and repaired for exchange of identical products that are returned to Plantronics by their distributors in the United States.
It is our opinion that the testing, cleaning, and repackaging process and refurbishing and/or repair in Mexico are repairs and/or alterations within the meaning of subheading 9802.00.5060, HTSUS. Provided the documentary requirements of Section 181.64, Customs Regulations (19 C.F.R. §181.64) are satisfied, the T100-2 telephone and LCAP telephone headset will qualify for a duty exemption under HTSUS subheading 9802.00.5060 when returned to the U.S.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Linda M. Hackett at 646-733-3015.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division