rackets

, ~:~,:~ D EjFA RTu. s .M E N TwAs . ~. ~TOc U S TO( FM ST H E. ,s E RV~ c ED.C.T R E A S U'~'Y ' 556718 0 8SEP 1992 CLA-2 CO:R:C:S 556718 SER CATEGORY: Classification TARIFF NO.: 8302.42.30; 9802.00.50 Ms. Cathie Mesheski Young Manufacturing, Inc. 2331 North 42 nd St. Grand Forks, ND 58203 U.S.-Canada Free Trade Agreement; applicability of partial duty exemption; alterations; metal lawn and patio furniture brackets Dear Ms. Mesheski: This is in reference to your letter of May 1, 1992, concerning the dutiable status of metal components from Canada ("T" brackets, half-moon brackets, and hanging glider brackets), used in lawn and patio furniture. FACTS: ~ PatioplatingMetalfurniture,process.bracketsareThe(fshiPPedplatedU'S' (rigin'bracketsto Canadawhicharewherethenaretheyusedshippedundergoin lawnbackaandto ~ thestatedprovidesappearancefurnitureU'S'thatprotectwhere'' theIn atheYbracketsiontelePh(nefromare s(ldareweatheringc(nversati(nalwayst( manufacturersplatedas wellwith' andas(ne(fathat(fmorelawnmYthedecoratandstaffplatPat' ingivei(y(u ~ ISSUE: What is the tariff status of the brackets upon importation into the U.S. ? LAW AND ANALYSIS: Classification of goods under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI'S), taken in order. GRI 1 provides that classification shall be determined according to the terms of the Headings and any relative section or chapter notes. TH~ DOCU,- ?JJSUC ~Y 8E ~ELE~SED TO T~ -2- Subheading 8302.42.30, HTSUSA, provides for base metal mountings, fittings, and similar articles suitable for furniture, ...: other, suitable for furniture. The subheading encompasses the articles at issue. The rate of duty is 5.7% __ad valorem. However, articles eligible under the U.S.-Canada Free Trade Agreement (CFTA) receive preferential duty treatment. General Note 3 (c) (vii) (B) (1) , HTSUSA, provides that goods from Canada are eligible for preferential treatment as "originating goods" if they are goods wholly obtained or produced in the territory of Canada and/or the U.S. General Note 3 (c) (vii) (A) , HTSUSA, provides that "originating goods", as defined in General Note 3(c)(vii)(B) , HTSUSA, that are imported into the customs territory of the U.S. and entered under a provision of the HTSUSA for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parenthesis, are eligible for the tariff treatment set forth in the "Special" subcolumn. In this case, the metal brackets would be considered goods wholly produced in the U.S. and/or Canada, and, therefore, would be considered "originating goods" for CFTA purposes. The metal brackets are properly classified in subheading 8302.42.30, HTSUSA, which includes a "CA" in the "Special" subcolumn and an applicable duty rate of 3.4% ad valorem. examinationSince theof thearticleschapterat 98issue, HTSUSA,are (fdutyU'S'exemption(rigin' anprograms is ~ warrantedthe brackets' Themayonlybe eligiblepossibleissubheadingsubheadingin9802chapter. 00.5098' HTSUSA.for which ~ Articlesadvanced inreturnedvalue orto improvedthe U.S. afterin conditionhaving beenby repairsexportedor to be ~ alterations may qualify for the partial duty exemption under HTSUSAAcc~rding~y~~rn~tdifferentdestr~ysubheadingtheentartic~esidentityit~ement9802thr~ugh' 00to(f' 50thisthe' aPr(videdprocessexP(rtedtariffthetreatmentofartmanufacturef(reignicles is(r(Peratpreccreate' ludedi(nnewd(es ~ where the exported articles are incomplete for their intended purpose prior to the foreign processing. Dolliff & Company Inc., v. United States, 455 F.Supp. 618 (1978), 599 F.2d 1015 (1979). Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations when returned to the U.S., provided the documentary requirements of section 10.8 Customs Regulations (19 CFR 10.8), are satisfied. -3- Customs has consistently held that plating operations, similar to those at issue in this case, exceed the scope of alterations contemplated by subheading 9802.00.50, HTSUSA. In Headquarters Ruling Letter (HRL) 554548 dated April 17, 1987, Customs held that steel tubing used for scaffolding, exported for galvanizing operations, was incomplete for its intended purpose upon being exported from the U.S., and, therefore, was precluded from the partial duty exemption provided under subheading 9802.00.50, HTSUSA. The galvanizing operations were considered to be the last step in the manufacture of the steel tubing into scaffolding. In this case, the brackets would also be considered incomplete for their intended purpose, prior to the plating operations in Canada. Therefore, the plating operations would exceed an "alteration" within the meaning of subheading 9802 . 00 . 50 , HTSUSA. HOLDING: The proper classification of the brackets at issue upon importation into the U.S. is subheading 8302.42.30, HTSUSA, which provides for base metal mountings, fittings and similar articles suitable for furniture, ...: other, suitable for furniture. As an eligible article under the CFTA, the rate of duty is 3.4% ad valorem. ' platingOn operationsthe basis ofexceedthe informationan .alteratsubmittedion'' within' wethefindmeaningthat ofthe ~ subheading 9802.00.50, HTSUSA. Therefore, the brackets would not be entitled to the benefits of this~rovision. ~ Sincerel , ~ ercial Rulings Division ~ ~uBUC ...