HQ 555731: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.60 to steel test plates. Rolling steel slabs into plates and subjecting them to an "accelerated cooled and direct quench" and other processing (shot blasting, heat treatment) abroad and variously cutting the returned plates into test specimens when returned to the U.S. constitute "further processing."555701

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 555731

                        November 14, 1990

CLA-2 CO:R:C:V 555731 GRV

CATEGORY:      CLASSIFICATION

TARIFF NO.:    9802.00.60

Mr. Marshall R. Mazer
Manager, Government Programs
Bethlehem Steel Corporation
Bethlehem, PA  18016

RE:  Applicability of partial duty exemption under HTSUS subhead-
     ing 9802.00.60 to steel test plates.  Rolling steel slabs
     into plates and subjecting them to an "accelerated cooled
     and direct quench" and other processing (shot blasting, heat
     treatment) abroad and variously cutting the returned plates
     into test specimens when returned to the U.S. constitute
     "further processing."555701

Dear Mr. Mazer:

     This is in response to your letter of August 6, 1990, to the
Regional Commissioner of Customs, New York Region, requesting a
ruling on the applicability of subheading 9802.00.60, Harmonized
Tariff Schedule of the United States (HTSUS), to stainless steel
plates to be imported from Japan after processing.  Your letter
was forwarded to this office for a direct response.

FACTS:

     U.S.-manufactured steel slabs will be exported to Japan for
processing into steel test plates.  In Japan, the steel slabs
will be rolled into plates and subjected to a process referred to
as an accelerated cooled and direct quench (AC/DQ).  This AC/DQ
process will impart improved mechanical properties to the plates.
The plates will also be subjected to other processing in Japan,
including shot blasting and heat treatment.  The steel slabs will
then be returned to the U.S. where they will be tested and a
variety of test specimens and samples (denominated patterns) will
be cut from the plates as required for evaluation.  Some plates
will be welded together for various mechanical and ballistic
tests.

ISSUE:

     Whether the steel plates will be eligible for the partial
duty exemption available under HTSUS subheading 9802.00.60 when
returned to the U.S.
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
     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, U.S. 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 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 predecessor tariff
     provision to HTSUS subheading 9802.00.60], the term 'further
     processing' has reference to processing that changes the
     shape of the metal or imparts new and different characteris-
     tics 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 a similar steel test plate case, we ruled that steel
slab is an eligible article of metal for purposes of HTSUS
subheading 9802.00.60.  We further held that rolling the slab
into plate abroad, and cutting the returned plate into various,
use-specific sizes and machining and/or welding sectioned parts
(some plates also were heat treated) to form test materials for
various mechanical and ballistic tests were sufficient to meet
the dual further processing requirement of this tariff provision.
Headquarter Ruling Letter (HRL) 555701 dated August 29, 1990.  As
the transaction you describe is materially the same as that
previously ruled on, we believe that HRL 555701 is controlling
here.
HOLDING:

     On the basis of the information provided, the steel plates
to be imported are eligible for the partial duty exemption under
HTSUS subheading 9802.00.60, provided the documentary
requirements of 19 CFR 10.9 have been met, as the processes
performed abroad and in the U.S. are sufficient to satisfy the
"further processing" requirements under this tariff provision.

                              Sincerely,





                              John Durant, Director
                              Commercial Rulings Division

Chief NIS Branch 1
New York Seaport
(855252)