Applicability of partial duty exemption of item 806.30, TSUS, to certain steel golf clubs

HQ 555127 October 17, 1988 CLA-2 CO:R:C:V 555127 DBI CATEGORY: Classification TARIFF NO.: 9802.00.60806.30, TSUS) Mr. Stephen G. Checkoway Hitchiner Manufacturing Company, Inc. Milford, New Hampshire 03055 RE: Applicability of partial duty exemption of item 806.30, TSUS, to certain steel golf clubs Dear Mr. Checkoway: This is in response to your letter of February 2, 1988, in which you request a ruling concerning the applicability of item 806.30, Tariff Schedules of the United States (TSUS), to certain U.S.-made steel golf club heads exported to Mexico for grinding, polishing, buffing and sandblasting, and returned to the U.S. for further processing. FACTS: You advise that golf club heads made at your plants in the U.S. will be shipped to Mexico where the gate stub will be removed from the head by grinding and then straightened to +/- 1.5 degrees. The heads will then be polished on successively finer belts to +/- four grams, followed by a buffing operation on a buffing wheel. Parts of the heads will then be masked with tape and the remaining exposed areas sandblasted. After the tape is removed, the heads will be cleaned in an acid solution and then coated with lacquer. The polished heads will then be returned to the U.S. where each head will be weighed to determine how much of the hosel (post) is to be cut off for balancing to final swing weight. Following the determined amount of cutting, the heads will then be attached to the shafts with epoxy glue and oven cured. After any necessary cosmetic repair of the shafts, the grips will be installed, followed by cleaning and boxing. Samples were submitted for examination. ISSUE: Whether the described steel golf club heads, when returned to the U.S., will be eligible for the partial duty exemption of item 806.30, TSUS (9802.00.60, Harmonized Tariff Schedule of - 2 - the United States (HTSUS)). LAW AND ANALYSIS: Under item 806.30, TSUS, articles of metal (except precious metal) manufactured in the U.S. or subjected to a process of manufacture in the U.S., if exported for further processing, and if the exported article as processed outside the U.S., or the article which results from the processing outside the U.S., is returned to the U.S. for further processing, may be entered with duty on the cost or value of the processing abroad upon compliance with section 10.9, Customs Regulations (19 CFR 10.9). We have previously held that for the 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 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. C.S.D. 84-89, 18 Cust. Bull. 957 (1983). In this respect, the described process of grinding the gate stubs in Mexico permanently changes the shape of the metal. Therefore, the grinding constitutes sufficient treatment to comply with the foreign processing requirements. In Intelex Systems, Inc. v. United States, 59 CCPA 138, C.A.D. 1055, 460 F.2d 1083 (1972), the court said that the expression "returned to the United States for further processing" means "that the article processed abroad and returned to the United States is no more than an advanced material or article which will be subjected to further manufacturing processes in the United States to get a complete article." In this case, the golf club heads are advanced abroad by grinding, polishing and sandblasting, and are returned to the U.S. for further cutting and the attachment of the shaft. The described domestic processes would appear to comply with the requirements of item 806.30, TSUS, since such operations are a necessary further fabrication that finish the complete articles desired by customers, namely the golf clubs. HOLDING: On the basis of the information and samples submitted, it is our opinion that the foreign grinding, and the cutting performed in the U.S., constitute "further processing" as that - 3 - term is used in item 806.30, TSUS, thereby entitling the returned golf club heads to classification under that tariff provision, upon compliance with section 10.9, Customs Regulations (19 CFR 10.9). Sincerely, John Durant Director, Commercial Rulings Division CLA-2 CO:R:C:V:DBI:MM:9/29/88