HQ 555291: Applicability of subheading 9802.00.50 or 9802.00.60, HTSUS, to aluminum alloy products

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 555291

                                   April 10, 1989

          CLA-2-CO:R:C  555291 RA

          CATEGORY: Classification

          TARIFF NOS.: 9802.00.50 and 9802.00.60, HTSUS

          Mr. Charles A. Snodderly
          Import Contract Administrator
          SKW Metals and Alloys, Inc.
          P.O. Box 368
          Niagara Falls, New York 14302

          RE: Applicability of subheading 9802.00.50 or 9802.00.60, HTSUS,
              to aluminum alloy products

          Dear Mr. Snodderly:

               This is in response to your letter of December 22, 1988,
          addressed to the Regional Commissioner of Customs, New York
          Region, which has been referred to us for reply on the question
          of a partial duty allowance for certain aluminum alloy products
          made in England from aluminum ingots of U.S. origin.

          FACTS:

               You indicate that aluminum ingots from domestic supplies are
          exported to England where they will be melted and blended with
          metals of foreign origin to form various finished grain refining
          alloy products for use as additives in alloy manufacture.  Upon
          return to the U.S., aluminum producers will further blend the
          imported alloy products with raw aluminum to produce metal stock
          for use in the manufacture of finished aluminum products, such as
          automobile or airplane parts.

          ISSUE:

               Will the provision for products exported for alterations in
          subheading 9802.00.50, Harmonized Tariff Schedule of the United
          States (HTSUS), or the provision for metal articles processed
          abroad and further processed on return in subheading 9802.00.60,
          HTSUS, apply to the aluminum alloy products made abroad?



















                                        - 2 -


          LAW AND ANALYSIS:

               Subheading 9802.00.50, HTSUS, provides for the assessment of
          duty on the value of repairs or alterations performed on articles
          sent abroad 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.  Guardian
          Industries Corporation v. U.S., 3 CIT 9 (1982).  Subheading
          9802.00.50, HTSUS, treatment also is 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.
          U.S., 66 CCPA 77, C.A.D. 1225 (1979).  As the aluminum ingots in
          the instant case are sent abroad to be finished into new and
          different alloy products, the foreign operations clearly exceed
          the meaning of the term "alterations."

               Subheading 9802.00.60, HTSUS, is applicable only to articles
          of metal (except precious metal) which are manufactured in the
          U.S. or subjected to a process of manufacture in the U.S.,
          exported for further processing, and returned after such
          processing for further processing in the U.S.  Articles which
          satisfy these requirements are dutiable only upon the value of
          the processing performed outside the U.S., assuming compliance
          with section 10.9, Customs Regulations (19 CFR 10.9; copy
          enclosed).  Thus, this tariff provision is applicable in this
          case only if the returned alloy products are not finished for the
          purposes of their intended use and are further processed in the
          U.S. to advance them towards their end use in making finished
          aluminum products.  When they are melted and blended with other
          metal, the additives have been further processed in the U.S. as
          required by subheading 9802.00.60, HTSUS.  In C.I.E. 1240/55,
          dated December 9, 1955, we held that purified metals returned to
          be alloyed and the resultant alloys used in the manufacture of
          automobile and similar parts would be considered as further
          processed in the U.S.

          HOLDING:

               Aluminum alloy products made by melting domestic-made ingots
          and blending with foreign-made metals have been subjected to
          operations abroad which exceed the scope of the term
          "alterations," thereby precluding application of subheading
          9802.00.50, HTSUS, to the returned alloy products.  However, the
          use of the alloy products when returned as additives to other
          metal by melting and blending to make alloys used in the
          manufacture of metal parts would be considered as further













                                        - 3 -


          processing in the U.S., as required by subheading 9802.00.60,
          HTSUS.  Therefore, the returned alloy products will be entitled
          to the partial duty exemption provided for in this tariff
          provision, upon compliance with 19 CFR 10.9.  Duty will be
          assessed on the value of the foreign processing, which will not
          include the value of the exported aluminium ingots of U.S.
          origin.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division


          Enclosure