HQ 556419: Repair of generator stators

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 556419

                         March 20, 1992


CLA-2 CO:R:C:S 556419 RA

CATEGORY:  Classification

TARIff NO.:   9802.00.50

Mr. William J. LeClair
Administrative and Regulatory Advisor
Trans-Border Customs Services, Inc.
P.O. Box 800
Champlain, New York 12919

RE:  Repair of generator stators

Dear Mr. LeClair:

     This is in response to your letter of November 15, 1991,
requesting a ruling on the applicability of the partial duty
exemption in subheading 9802.00.50, Harmonized Tariff Schedule of
the United States (HTSUS), to articles returned after exportation
for repair abroad.

FACTS:

     You state that your client Super Generator Canada of 
St. Hubert, Quebec, Canada, obtains burnt out generator stators
from its U.S. subsidiary and returns them after repair.   The
repair operations consist of removing the burned out wire 
windings and insulation from the stators and replacing them with
new materials.   The repaired stators are dipped in varnish which
serves as an insulator.   The wire and insulators utilized in 
these operations are of U.S. origin and are cut to the exact 
length required.

ISSUE:

     Are the repaired stators entitled to a partial exemption as
articles returned after repairs abroad under subheading 
9802.00.50, HTSUS?  Is there any allowance for the value of the
U.S.-made materials used in the repairs?
                               -2-

LAW AND ANALYSIS:

     Subheading 9802.00.50, HTSUS, provides a partial duty
exemption for articles returned to the U.S. after having been
exported to be advanced in value or improved in condition by 
means of an alteration or repair.  Only completed or finished 
goods can qualify under this provision and the identity of the
goods must not be lost or destroyed  in the foreign process.  We
are of the opinion that the process of removing the burnt out
windings and insulation, cleaning the stator core, replacing the
old wire and insulation and applying a coating of varnish,
constitutes a repair under the provisions of subheading 
9802.00.50, HTSUS.   These operations merely restore the stator to
its original condition and permit it to be used again.

     Articles entitled to the partial exemption are dutiable only
on the cost or value of the foreign repairs, provided the
documentary requirements of section 10.8, Customs Regulations 
(19 CFR 10.8, copy enclosed) are satisfied.   Section 10.8(1)
provides that the cost or value of domestic as well as foreign
articles used in the processing must be included in arriving at 
the basis for the assessment of duty.   Accordingly, no allowance
in duty can be authorized for the value of the U.S.-made wire and
insulating material utilized in repairing the stators.

HOLDING:

     On the basis of the described foreign operations, the 
repaired stators will be eligible for the partial duty exemption
under HTSUS subheading 9802.00.50, but no allowance can be made 
for U.S.-made materials used in the processing abroad.   This
presumes compliance with the documentation requirements of 
19 CFR 10.8.

                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division

Enclosure