HQ 555751: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.60 to golf club heads from Mexico.C.S.D. 84-49; machining;plating;555562;Intelex;reaming;minor operation; 555127;555165;086289

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 555751

                        January 31, 1991

CLA-2 CO:R:C:S 555751 GRV

CATEGORY:      CLASSIFICATION

TARIFF NO.:    9802.00.60

Mr. Richard G. Seley
Rudolph Miles & Sons, Inc.
Customhouse Brokers
4950 Gateway East
P.O. Box 144
El Paso, Texas  79942

RE:  Applicability of partial duty exemption under HTSUS subhead-
     ing 9802.00.60 to golf club heads from Mexico.C.S.D. 84-49;
     machining;plating;555562;Intelex;reaming;minor operation;
     555127;555165;086289

Dear Mr. Seley:

     This is in response to your letter of September 25, 1990,
on behalf of Ben Hogan Co., requesting a ruling on the
applicability of subheading 9802.00.60, Harmonized Tariff
Schedule of the United States (HTSUS), to golf club heads to be
imported from Mexico.  Samples of golf club heads representing
their condition as exported, returned and finished in the U.S.
were submitted for examination.

FACTS:

     U.S.-origin iron forgings will be shipped to Mexico to be
processed into golf club heads.  In Mexico, the iron forgings
will be subjected to multiple machining and plating operations,
the hosels (posts) of the club heads will be bored, and the
processed golf club heads will be buffed, sonic cleaned, painted
and packaged.  Upon return to the U.S., the hosels of the golf
club heads will be reamed so that the shaft of the golf club can
be properly assembled to it.

     Regarding the reaming operation, you state that the metal
removed--varying from .008 to .020 inch--increases the hosel
bore diameter to insure the correct fit of the shaft to the club
head.  You claim that the performance of this operation just
prior to the shaft assembly insures a clean surface for optimum
adhesion of the shaft to the iron head, which is essential to
assure club integrity.
ISSUE:

     Whether the reaming operation performed on the golf club
heads when they are returned to the U.S. constitutes a
sufficient process of manufacture to qualify as "further
processing" within the meaning of HTSUS subheading 9802.00.60.

LAW AND ANALYSIS:

     HTSUS subheading 9802.00.60 provides a partial duty
exemption for:

     [a]ny article of metal (as defined in U.S. note 3(d) of
     this subchapter) manufactured in the United States or
     subjected to a process of manufacture in the United
     States, if exported for further processing, and if the
     exported article as processed outside the United
     States, or the article which results from the process-
     ing outside the United States, is returned to the
     United States for further processing.

This tariff provision imposes a dual "further processing"
requirement on eligible, U.S. metal articles:  one foreign, and
when returned, one domestic.  However, not all "processing" to
which articles of metal can be subjected are significant enough
to qualify as "further processing," within the purview of HTSUS
subheading 9802.00.60.  Intelex Systems, Inc. v. United States,
C.A.D. 1055, 59 CCPA 138, 460 F.2d 1083 (1972), aff'g, C.D. 4093,
65 Cust.Ct. 306, 318 F.Supp. 515 (1970).  Metal articles
satisfying these statutory requirements may be classified under
HTSUS subheading 9802.00.60 with duty only on the value of such
processing performed outside the U.S., provided the documentary
requirements of section 10.9, Customs Regulations (19 CFR 10.9),
are met.

     In C.S.D. 84-49, 18 Cust. Bull. 957 (1983) we stated that:

     [f]or purposes of item 806.30, TSUS, the term 'further
     processing' has reference to processing that changes the
     shape of the metal or imparts new and different character-
     istics which become an integral part of the metal itself
     and which did not exist in the metal before processing;
     thus, further processing includes machining, grinding,
     drilling, threading, punching, forming, plating, and the
     like, but does not include painting or the mere assembly of
     finished parts by bolting, welding, etc.

     In Headquarters Ruling Letter (HRL) 555127 dated October 17,
1988, we considered whether certain golf club heads returned to
the U.S. to have a portion of the hosel cut off were eligible for
HTSUS subheading 9802.00.60 tariff treatment.  Finding that the
domestic cutting operation was a necessary further fabrication of
the golf clubs, resulting in a change in the shape of the hosel
component, we concluded that the returned golf club heads were
entitled to classification under HTSUS subheading 9802.00.60.

     In this case, we do not dispute your assertion that the
performance of the reaming operation just prior to the shaft
assembly is essential to assure club integrity.  However, the
fact that an operation may be a necessary step in the production
of the final article is not dispositive of whether the operation
qualifies as "further processing" for purposes of HTSUS
subheading 9802.00.60.  See, HRL 555165 dated June 26, 1989 (the
returned metal article must be subjected to a "process of
manufacture," and merely because it is returned in an incomplete
state does not mean that any kind of processing in the U.S. that
advances it toward completion will serve to satisfy the domestic
"further processing" requirement).  We are not persuaded that the
domestic reaming operation performed here constitutes "further
processing" within the meaning of HTSUS subheading 9802.00.60.
In our opinion, the reaming operation is minor--removing a
maximum of only .020 inch from the hosel bore, which does not
change the shape of the metal or impart new and different
characteristics to the golf club head which did not exist in the
metal before the domestic operation.   See, HRL 086289 dated
March 13, 1990 (minimal domestic operations of grinding rough
edges smooth and deburring steel arms for power transmission
towers did not constitute "further processing" under HTSUS
subheading 9802.00.60).   Further, we note that the two samples
submitted, representing the golf club heads as returned and
processed in the U.S., are visually indistinguishable from each
other, and do not evidence any change in shape of the golf club
heads.

HOLDING:

     On the basis of the information and samples submitted, we
conclude that the reaming operation performed on the golf club
heads when they are returned to the U.S. does not constitute
"further processing" within the meaning of HTSUS subheading
9802.00.60.  Therefore, the golf club heads will be fully
dutiable when imported into the U.S.

                               Sincerely,




                               John Durant, Director
                               Commercial Rulings Division