CLA-2-85:OT:RR:NC:N4:112
Paul Stenson
Technofan LLC
7501 Hardeson Road
Everett, WA 98203
RE: The tariff classification of a stator from France and the applicability of subheading 9802.00.5060, HTSUS, of same that is exported from the United States to Canada and returned to the United States
Dear Mr. Stenson:
In your letter dated May 20, 2016 you requested a tariff classification ruling.
The merchandise under consideration is described as an electric motor stator which is principally used in a fan/blower assembly for aircraft ventilation and cooling of onboard areas and systems. The complete fan/blower assembly is manufactured in France and distributed worldwide to various end users. Once the fan/blower assembly has reached its end of use or a malfunction is identified, it is sent to your facility for repair where the stators are removed from the electric motor and exported to Canada for refurbishment.
The stators are comprised of the core, wiring, thermal switches and varnish. The refurbishment process performed in Canada consists of rewinding the stator core, replacement of thermal switches as required, and application of varnish. Once the repairs have been completed, the stators are sent back to you to be incorporated into a fan/blower assembly.
In your letter, you suggest classifying the stator in subheading 8414.90.1080, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other parts of fans (including blowers) and ventilating or recycling hoods. In Mitsubishi Electronics America v. United States, 19 CIT 378, 383 n.3 (1995) the court stated “a subpart of a particular part of an article is more specifically provided for as a part of a part than a part of the whole”. The instant stator is “a part of a part” in that this article is a part of the fan motor that is itself a part of the whole, i.e., the fan/blower. Also, CBP has previously classified a stator of a fan motor elsewhere. As such, classification in HTSUS subheading 8414.90.1080 is precluded.
The applicable subheading for the stator will be 8503.00.6500, HTSUS, which provides for "Parts suitable for use solely or principally with the machines of heading 8501 or 8502: Stators and rotors for the goods of heading 8501: Other." The general rate of duty will be 3%.
Articles exported from and returned to the United States, after having been advanced in value or improved in condition by repairs or alterations in Canada, may qualify for duty exemption under the HTSUS subheading 9802.00.50 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. The Customs regulations which implement the NAFTA are contained in title 19 CFR Part 181. Section 181.64(a) defines "repairs or alterations" for purposes of NAFTA as follows:
“Repairs or alterations" means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the United States.
On the basis of the information submitted, the Canadian operations enumerated above constitute "repairs or alterations" within the meaning of 19 CFR 181.64(a) and therefore the stators repaired or altered in Canada are dutiable only upon the value of the foreign repairs or alterations. However, regarding the duty to be assessed on the value of the foreign repairs or alterations, U.S. Note 3(d) to Subchapter II of Chapter 98, HTSUS, is controlling. It states:
For the purposes of subheadings 9802.00.40 and 9802.00.50, the rates of duty in the "special" subcolumn of column 1 followed by the symbol "CA" or "MX" in parentheses shall apply to any goods which are returned to the United States after having been repaired or altered in Canada or in Mexico, respectively, whether or not such goods are goods of Canada or goods of Mexico under the terms of General Note 12 to the tariff schedule. The “special” subcolumn reflects a free rate of duty. Accordingly, the subject stators will qualify for the full duty exemption provided by subheading 9802.00.5060, HTSUS, upon re-importation into the United States.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current.
As noted in 19 C.F.R. § 181.64 (c)(2), the port director may require additional information as is deemed necessary to prove actual exportation of the goods from the United States and subsequent re-importation of the same goods after alteration. The documentation must clearly follow the stators through exportation, alteration, and re-importation. For information as to the documentation that will satisfy Section 181.64, C.R., you should contact the Port Director at the anticipated United States port of entry.
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division