Applicability of subheading 9802.00.50 pertaining to the repairs and alterations of golf clubs

N273291 March 24, 2016 CLA-2-95:OT:RR:NC:N4:424 CATEGORY: Classification TARIFF NO.: 9802.00.50 Mr. Steven B. Zisser Zisser Customs Law Group 9355 Airway Rd, Suite 1 San Diego, CA 92154 RE: Applicability of subheading 9802.00.50 pertaining to the repairs and alterations of golf clubs Dear Mr. Zisser: In your letter dated February 16, 2016, you requested a tariff classification ruling on behalf of Callaway Golf Company. In your request, you state that foreign-made golf clubs are exported from the United States to Mexico for repairs or alterations. Once the golf clubs undergo the repair and alteration process, they are exported back to the United States. Your request pertained as to whether the repair and alteration processes performed to the golf clubs satisfy the requirements of subheading 9802.00.5060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means: Articles exported for repairs or alterations: Other.” In Mexico, the golf clubs are inspected for damage requiring a repair and/or an alteration for one of the following conditions: Visible scratches/marks on golf club head or shaft - When the damage on the golf club head or shaft is limited to visible scratches/marks, they will be removed by using a polishing/grinding system. This involves removing the head/shaft by hand and pressing it against a spinning polishing wheel until the scratches have been removed and the surface regains its shine. Golf club needing an adjustment of loft and lie of club head – Components are inspected on the ball control or OptiFit mechanisms located on the golf club head. Damaged cogs are replaced and the unit is thoroughly cleaned to remove any debris or contaminents. It is reset to the original factory setting of zero for the loft and lie adjustments. Golf club grip is damaged or missing – If present, the damaged grip is removed using solvents and other removal tools and is disposed of. The club is then fitted with a new grip. Golf club has a damaged shaft - For golf clubs with a damaged (dented) or broken shaft, they will be removed using specialized tools. In all cases there are remnants of the shaft in the hosel and can measure anywhere between 2” to 20”. The hosel will be cleaned and prepped for insertion with an identical shaft. If not available, a equivalent substitute shaft will be used. Golf club head contains dents – The golf club is treated as scrap and will be disposed of in Mexico. In every instance, with the exception of item 5, after the repair or alteration has been performed, the golf club will be cleaned, packaged and sent back to the customer. Moreover, in all of the above scenarios, under no circumstances will the golf head be replaced. If the head is damaged beyond repair, the entire golf club will be scrapped. Articles returned to the United States after having been exported to be advanced in value or improved in condition by repairs or alterations may qualify for a duty exemption under subheading 9802.00.50, HTSUS, provided the foreign operation does not destroy the identity of the exported articles or create new or different articles through a process of manufacture. Such articles returned after having been repaired or altered in Mexico, whether or not pursuant to a warranty, are eligible for duty-free treatment, upon compliance with the regulatory and documentary requirements of section 181.64, Customs Regulations (19 C.F.R. 181.64). For purposes of this section, "repairs or alterations" means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the United States. In the scenarios laid out above for Callaway Golf Company, the repair and alteration operations of polishing, buffing, replacement of damaged shafts and grips, adjustment of club head mechanisms, and cleaning are eligible for duty-free treatment under subheading 9802.00.5060, HTSUS, when returned to the U.S., provided the documentary requirements of 19 CFR 181.64 are satisfied. The repairs and alterations performed do not alter the golf club’s original capabilities nor do they change the golf club’s commercial identity. The performance standards and specifications as a golf club remain the same. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist James Forkan at james.p.forkan@cbp.dhs.gov. Sincerely, Deborah C. Marinucci Acting Director National Commodity Specialist Division