HQ 555084: Applicability of partial duty exemption of item 806.20, TSUS, to certain abrasive grinding elements exported to Japan for refurbishment

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 555084

                                   November 29, 1988

            CLA-2  CO:R:C:V  555084 DBI

            CATEGORY:  Classification

            TARIFF NO.:  9802.00.40; 806.20

            Robert E. Burke, Esq.
            Barnes, Richardson and Colburn
            200 East Randolph Drive
            Chicago, Illinois  60601

            RE:  Applicability of partial duty exemption of
                 item 806.20, TSUS, to certain abrasive grinding
                 elements exported to Japan for refurbishment

            Dear Mr. Burke:

                This is in response to your letter of March 28, 1988, to
            the Regional Commissioner of Customs, New York Region, in which
            you request a ruling concerning the applicability of item
            806.20, Tariff Schedules of the United States (TSUS), to
            certain abrasive grinding elements to be exported to Japan for
            cleaning, grinding and the attachment of a new abrasive.  Your
            letter has been forwarded to this office for a response.

            FACTS:

                You advise that the imported merchandise consists of
            triangular grinding pieces used in grinding machinery.  Each
            piece consists of an aluminum base onto which abrasive material
            has been affixed.  The aluminum base is approximately 10 mm
            thick while the abrasive surface is 48 mm thick.  Twenty of
            these pieces are mounted to a grinding machine forming a
            circular grinding surface.

                When the abrasive surface has worn down to a thickness of
            approximately 10 to 15 mm, the required degree of precision can
            no longer be maintained, although such worn parts could be used
            when maintaining precision tolerances are not necessary.  At
            that point, the worn pieces would be sent to Japan for
            refurbishment.

                In Japan, the worn down abrasive will be removed, and the
            aluminum base will be cleaned and ground to attain a uniformly
            level surface.  A completely new abrasive manufactured in Japan
            will then be attached to the base with epoxy resins.  The
            merchandise will then be shipped back to the U.S.














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                The value of the worn out article exported from the U.S. is
            approximately $15 to $20, including $12 to $15 for the aluminum
            base and $3 to $5 for the worn down abrasive material.  The
            value of the new article imported from Japan is approximately
            $50 to $75, including $12 to $15 for the aluminum base plus $38
            to $60 for the newly manufactured material.

            ISSUE:

                Whether the described abrasive grinding elements, when
            returned to the U.S., will be eligible for the partial
            exemption from duty in subheading 9802.00.40, Harmonized Tariff
            Schedule of the United States (HTSUS) (806.20, TSUS).

            LAW AND ANALYSIS:

                As you are probably aware, the HTSUS will replace the TSUS,
            effective January 1, 1989.  Item 806.20, TSUS, will be carried
            over into the HTSUS without change as subheading 9802.00.40.
            Subheading 9802.00.40, HTSUS, provides for the assessment of
            duty on the value of repairs or alterations performed on
            articles that have been exported for that purpose.  However,
            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);  Guardian Industries Corporation v.
            United States, 3 CIT 9, Slip Op. 82-4 (Jan. 5, 1982).
            Treatment under subheading 9802.00.40, 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 finished articles.  Dolliff &
            Company, Inc. v. United States, 66 CCPA 77, C.A.D 1225,  599
            F.2d 1015 (1979).

                In Press Wireless, Inc. v. United States, C.D. 438 (1941),
            worn-out radio tubes were sent abroad for the replacement of
            filaments damaged through use and for other necessary repairs
            designed to restore the tubes to a condition which prolonged
            the use for which they were originally designed.  The court
            held that the tubes returned to the U.S. were identical to the
            tubes exported for repairs.  The fact that they had been
            restored to their original efficiency so as to prolong their
            usefulness was of no consequence.
















                                          -3-



                In the present case, the product that will be returned is
            the same as the product that will be exported for repairs.
            Although a new abrasive will be attached, the identity of the
            article will not be destroyed and the addition will not create
            a new or different commercial article.  According to the
            reasoning in Press Wireless, the fact that the worn-out
            abrasive elements will be restored to their original efficiency
            will not preclude the article from receiving partial duty-free
            treatment under subheading 9802.00.40, HTSUS.

            HOLDING:

                On the basis of the information submitted, it is our
            opinion that the foreign cleaning, grinding and attachment of a
            new abrasive constitute repairs as that term is used in
            subheading 9802.00.40, HTSUS, and, therefore, the abrasive
            grinding elements would be entitled to the partial duty
            exemption provided for in that tariff provision, upon
            compliance with section 10.8, Customs Regulations (19 CFR
            10.8).

                                      Sincerely,






                                       John Durant
                                       Director, Commercial
                                       Rulings Division