CLA-2-75:OT:RR:NC:N1:117
Ms. Shelly Bernstein
The Irwin Brown Company
212 Chartres Street
New Orleans, LA 70130
RE: The tariff classification of nickel pipe fittings from the United Kingdom
Dear Ms. Bernstein:
In your letter dated August 14, 2017, you requested a tariff classification ruling on behalf of your client, Corrosion Materials.
The products under consideration are nickel pipe fittings of various sizes. You indicate that Corrosion Materials will export nickel alloy tubing of U.S. origin to the United Kingdom where the tubing will be cut into smaller pieces and made into tees and stub ends using special presses and dies. These fittings will then be cleaned, beveled, marked and imported back to the United States.
The applicable subheading for the tees and stub ends will be 7507.20.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for nickel tubes, pipes and tube or pipe fittings (for example, couplings, elbows, sleeves): tube or pipe fittings. The rate of duty will be 3 percent ad valorem.
You ask whether the pipe fittings are eligible for treatment in either subheading 9802.00.5010 or 9802.00.5060 of the HTSUS and if the imported articles are still considered products of the United States. Subheading 9802.00.50, HTSUS, provides a partial duty exemption for articles returned to the United States after having been exported to be advanced in value or improved in condition by means of repairs or alterations. Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations, provided the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8), are satisfied.
The application of this tariff provision is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1957) and Guardian Industries Corporation v. United States, 3 CIT 9 (1982). Treatment under subheading 9802.00.50, HTSUS, is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of the finished article. Alterations are made only to completed articles and do not include intermediate operations which are performed in the manufacture of finished articles. See Dolliff and Company, Inc. v. United States, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1979).
The manufacturing operations performed in the United Kingdom exceed an alteration.
The tubing undergoes a substantial transformation in the United Kingdom and becomes a new article (i.e. tees and stub ends) having a new name, character or use. As such, the country of origin of the fittings is the United Kingdom. Accordingly, the imported tees and stub ends are not eligible for tariff treatment under the provisions of subheading 9802.00.5010, HTSUS, or 9802.00.5060, HTSUS, and would be subject to duty on the full value.
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.
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 Mary Ellen Laker at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division