HQ 556365: Applicability of HTSUSA subheading 9802.00.60 to steel sheeting from Greece; C.S.D. 84-49; HRL 553252, 556080, 554965

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 556365

                          March 2, 1992

CLA-2 CO:R:C:S 556365/556366 SER

CATEGORY: Classification

TARIFF NO.: 9802.00.60

Mr. Matthew Chang
C.Itoh & Co. (America) Inc.
335 Madison Avenue
New York, NY 10017

RE:  Applicability of HTSUSA subheading 9802.00.60 to steel
     sheeting from Greece; C.S.D. 84-49; HRL 553252, 556080,
     554965

Dear Mr. Chang:

     This is in reference to your letters of September 27, 1991,
requesting a ruling concerning the applicability of subheading
9802.00.60, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), to steel sheets or coils to be imported into
the U.S. from Greece.

FACTS:

     U.S.-origin coiled hot-rolled steel sheets, approximately
2.0 mm thick, and in widths varying up to 745 mm, are shipped to
Greece, where the steel will be uncoiled, pickled, trimmed,
oiled, and descaled.  Next, the ends of the sheets will be cut,
and the steel will undergo operations such as cold-reduction and
annealing before being packaged for exportation.  In some
instances, the steel will undergo further operations involving
oiling, shearing and recoiling before being packaged for
exportation.

     The processed steel will be returned to the U.S. in both
sheet and coil form.  The width and thickness of the steel will
vary, with the thickness ranging from less than 0.361mm up to
1.016mm.  The imported steel will then be sold to various U.S.
customers who will unpack and fabricate the steel into various
items, such as pail cans, ceiling suspensions, lighting fixtures,
furniture, shelving, caps, drapery rods, water heaters, metal
roof decking, building products, radiator fins, picture frames,
steel drums, and battery parts.

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ISSUE:

     Whether the steel sheets or coils 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.

     In this case, the steel sheeting is an eligible article of
metal for purposes of subheading 9802.00.60, HTSUSA.  In
addition, the processing of the steel in Greece would constitute
"further processing" under this tariff provision.  In
Headquarters Ruling Letter (HRL) 553252 dated September 26, 1984,
Customs held that processing operations, consistent with those
operations performed in Greece-- cold-reduction, annealing and
pickling, skim passing, edge trimming, and slitting-- constituted
"further processing" for purposes of this tariff provision.  In
                               -3-



that Ruling, as in this case, the processing operations clearly
impart new and different characteristics which become an
integral part of the metal itself and which did not exist in the
metal before processing.

     It next must be determined whether the domestic aspect of
the "further processing" requirement has been met.  In this
case, the domestic operations are to be conducted by firms, other
than C.Itoh, who purchase the steel products imported from
Greece.  These firms will conduct various operations on the steel
in the manufacture of products such as pail cans, ceiling
suspensions, lighting fixtures, furniture, water heaters,
radiator fins, etc.

     There is no requirement under subheading 9802.00.60, HTSUSA,
that the identity of the person who performs the further
processing in the U.S. be known at the time the material is
exported from the U.S, or at the time the returned material
enters the U.S.  There is also no requirement that the same
person who exported the material, or the same person who imports
the material must perform the further processing in the U.S.
However, the importer should satisfy the district or area
director of the actual performance of further processing in the
U.S.

     In addition, the domestic further processing should be
conducted within a reasonable time following importation.  See,
19 CFR 10.9, and HRL 556080 dated August 27, 1991.  In HRL 554965
dated September 6, 1989, Customs found that under the
circumstances of that case, four months was a reasonable period
of time to warehouse stainless steel sheets in the U.S. before
being further processed.

     It would appear, based on the applications and products made
from the steel imported from Greece, that the domestic further
processing requirement would be satisfied.  The manufacture of
the articles listed above, clearly would impart new and different
characteristics which become an integral part of the metal
itself.  However, as previously stated, the district or area
director must be satisfied of the actual performance of further
processing in the U.S.

HOLDING:

     On the basis of the information submitted, it is our opinion
that the processes performed abroad constitute "further
processing" as that term is used in subheading 9802.00.60,
HTSUSA.  In addition, it would appear that the operations to be
performed in the U.S. would also constitute "further processing".
However, since the actual processing operations to be conducted
were not provided, the area or district director must be
satisfied of the actual performance of further processing in the
U.S.  Contingent on the satisfaction of the area or district
director, the imported steel sheets or coils will be entitled to
entry under subheading 9802.00.60, HTSUSA, 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