Applicability of partial duty exemption under HTSUSA subheading 9802.00.60 to stainless steel plates

HQ 555572 April 27, 1990 CLA-2 CO:R:C 555572 RA CATEGORY: Classification TARIFF NO.: 9802.00.60 Mr. Serge Vinograd Executive Vice President Charleroi (USA) 88 Danbury Road Wilton, CT 06897 RE: Applicability of partial duty exemption under HTSUSA subheading 9802.00.60 to stainless steel plates Dear Mr. Vinograd: This is in response to your letter of January 2, 1990, regarding the further processing of imported steel plates which were the subject of our ruling dated September 21, 1989 (HQ 084776). FACTS: You state that stainless steel plates are imported for sale to end users or service centers and to be primarily used in the manufacture of storage tanks for gases or chemicals. They cannot be used as imported without being processed by machining, grinding, drilling, punching, or forming. No further description of these operations or the finished product is given. ISSUE: Whether stainless steel plates will be eligible for a partial duty exemption when returned to the U.S. and used in the manufacture of storage tanks. LAW AND ANALYSIS: Subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUSA), provides a partial duty exemption for articles of metal manufactured or subjected to a process of manufacture in the U.S., exported for further processing, and further processed when returned. The term "further processing" has been interpreted to mean operations which - 2 - change the shape of the metal or impart new and different characteristics which become an integral part of the metal itself. It does not include the assembly of finished parts by bolting, welding, etc. Accordingly, if the steel plates are subjected to processes which change their shape or effect the metal by grinding, drilling, forming, punching, or similar processes this would be sufficient to meet the domestic processing requirement. However, if the plates are merely assembled by welding or bolting without changes in the metal itself, they would not be eligible for tariff treatment under the statute. It is incumbent upon the importer to satisfy the District Director of Customs of the actual performance of further processing and that it constitutes more than mere assembly without the required changes in the metal. See C.S.D. 89-128, copy enclosed. HOLDING: Stainless steel plates made abroad from domestic metal and manufactured into storage tanks after being returned to the U.S. are eligible for partial exemption under subheading 9800.00.60, HTSUSA, if the further processing in this country consists of more than mere assembly and includes a change in shape or other characteristics of the metal by operations such as grinding, drilling, forming, punching, or similar processes. Sincerely, Jerry Laderberg Acting Director Commercial Rulings Division Enclosure RARNOLD:lw 4/23/90