HQ 555882: Applicability of HTSUS subheading 9802.00.60 to aluminum flag poles created by tapering, cutting, and drilling. C.S.D. 84-49, HRL 555536, HRL 555620

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 555882

                        June 10, 1991

CLA-2 CO:R:C:S 555882 SER

CATEGORY: Classification

TARIFF NO.:  9802.00.60

Mr. Gary Brunell
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY  12919-9703

RE:  Applicability of HTSUS subheading 9802.00.60 to aluminum
     flag poles created by tapering, cutting, and drilling.
     C.S.D. 84-49, HRL 555536, HRL 555620

Dear Mr. Brunell:

     This is in reference to your letter of February 5, 1991, on
behalf of Pole-Lite Marketing Corp., concerning the applicability
of subheading 9802.00.60, Harmonized Tariff Schedule of the
United States Annotated (HTSUSA), to aluminum flag poles.

FACTS:

     Aluminum tubes manufactured in the U.S. are sent to Canada
for further processing.  In Canada, the aluminum tubes undergo
several operations.  The tubes are first tapered using a
mechanical or numerical control tapering machine.  A circular
plate is then added to the tubes to enable the ultimate purchaser
to add a pole cap.  The poles are then heat treated "to obtain
the maximum of mechanical properties", sanded, and then packaged
for shipment back to the U.S.  If the poles are in two sections,
an internal sleeve is installed to join the two pieces together.

     The operations performed in the U.S. on the partially
completed flagpoles depend on which of two styles of flagpoles
is to be produced-- the guardian ground set flagpole or the
double masted nautical flagpole.

     For the guardian style, the aluminum pole is sanded and a
rectangular 4 x 6 inch hole is cut four feet above the bottom of
the pole.  Next, a sleeve and plate are welded to the pole,
followed by the drilling and tapping of two holes in the plate.
Another plate, the size of the rectangular cut-out, is fabricated
and attached to the pole to serve as a door.  When required, a
pipe coupling is arc-welded to the aluminum poles.  The poles are
then anodized or painted the color requested by the consumer.
                               -2-



     The first domestic operation on the double masted nautical
model is cutting a section from the pole one-third from its top.
Next, the "cut" pole is arc welded to another pole with an
overlap of approximately two feet.  Several aluminum plates,
straps and a sleeve are then welded to the pole for support and
function, and holes are drilled in various positions on the
plates and pole.  The pole is then anodized or painted the color
required by the consumer.

ISSUE:

     Whether the flag poles will be eligible for the partial duty
exemption available under subheading 9802.00.60, HTSUSA, when
imported into the U.S.

LAW AND ANALYSIS:

     Subheading 9802.00.60, HTSUSA, 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
     subject 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
     processing outside the United States, is returned to
     the United States for further processing.

     This tariff provision imposes a dual "further processing"
requirement on eligible articles of metal-- one foreign, and when
returned, one domestic.  Metal articles satisfying these
statutory requirements may be classified under this tariff
provision with duty only on the value of such processing
performed outside of the U.S., provided there is compliance with
the documentary requirements of section 10.9, Customs Regulations
(19 CFR 10.9).

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

     [f]or purposes of item 806.30, TSUS [precursor to
     9802.00.60 HTSUSA], the term "further processing" has
     reference to processing that changes the shape of the
     metal or imparts new and different characteristics
     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.
                               -3-



     In this case, the aluminum poles are eligible articles of
metal for purposes of subheading 9802.00.60, HTSUSA.  In
addition, the processing in Canada is considered "further
processing" under this tariff provision.  In Headquarters Ruling
Letter (HRL) 555536 dated October 29, 1990, we held that
stainless steel articles subjected to a heat treatment process
constituted a further processing operation pursuant to subheading
9802.00.60, HTSUSA.  In that case, the heat treatment process did
not fundamentally change the stainless steel article, but
maximized softness, ductility, and corrosion resistance
properties inherent to the material.  Similarly in this case, the
heat treatment is performed to obtain the maximum of the
material's "mechanical properties."  The tapering operation
clearly falls within the processing operations discussed in
C.S.D. 84-49, which enumerates forming as an example of further
processing.

     Furthermore, the operations performed in the U.S. to the
returned aluminum poles (cutting, drilling, etc.) are considered
sufficient processes to comply with the domestic "further
processing" requirement of subheading 9802.00.60, HTSUSA, under
C.S.D. 84-49.  See also HRL 555620 dated August 8, 1990 (the
cutting of steel discs constituted "further processing" under
subheading 9802.00.60, HTSUSA).

HOLDING:

     On the basis of the information submitted, it is our
opinion that the processes performed abroad and upon return to
the U.S. to create flag poles, constitute "further processing"
as that term is used in subheading 9802.00.60, HTSUSA.
Therefore, the imported aluminum flagpoles will be entitled to
classification under this tariff provision with duty only on the
cost or value of such processing performed outside the U.S., upon
compliance with the documentary requirements of 19 CFR 10.9.

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division