Protest No. 1101-88-000595 dated July 7, 1988; Copper Strip Clad with Cupro-Nickel

HQ W555747 October 15, 1991 CLA-2 CO:R:C:S W555747 DSN CATEGORY: Classification TARIFF NO.: 612.31; 806.30 District Director U.S. Customs Service Second & Chestnut Sts., Suite 102 Philadelphia, PA 19106 RE: Protest No. 1101-88-000595 dated July 7, 1988; Copper Strip Clad with Cupro-Nickel Dear Sir: This is our response regarding Further Review of Protest No. 1101-88-000595 dated July 7, 1988, from VDN America, regarding the tariff classification and partial duty exemption for copper strip clad with cupro-nickel under the Tariff Schedules of the United States (TSUS). FACTS: The "cupro-nickel strip" consists of three layers. The center layer consists of pure copper. The two exterior layers consist of cupro-nickel alloy. The cupro-nickel consists of 75 percent copper and twenty-five percent nickel, while the overall composition of the three layer composite strip is approximately 91.7 percent copper and 8.3 percent nickel. According to their submission of April 26, 1990, VDN America, contracted with the Department of Treasury, Bureau of the Mint, for a supply of copper strips, clad with cupro-nickel, for the manufacture of 25 cent coins. The u.s.-origin copper and nickel was furnished by the Bureau of the Mint for manufacture of clad strips. The copper and nickel were exported to Germany where the copper was pressured or heated from bullion into 99.3% copper strips. The copper was then blended with the nickel and rolled into strips. The 99.3% copper strips were thin clad by a combination of heat and pressure on both sides with the cupro-nickel cladding and imported into the U.S. in coils. In the U.S. the clad  2 copper strips were further processed by the Bureau of the Mint. The Bureau of the Mint stamped the clad copper strips into blanks which resembled 25 cent coins. ·The blanks were then die-stamped into 25 cent coins. The 806.30, TSUS, issue involves VDN's failure to file a Customs Form (CF) 4455 at the time of export, and their subsequent failure to claim 806.30, TSUS, treatment at the time of importation. VDN claims that the failure to comply with the documentary requirements was'due to inadvertence, mistake or inexperience and that VON had no previous experience with 806.30, TSUS, entries. They contend that section 10.9(k), Customs Regulations (19 CFR 10.9(k)) (now 19 CFR 10.9(i)), pertaining to the district director's authority to waive production of the CF 4455, is applicable to these articles. ISSUES: What is the classification of copper strip clad with cupro-nickel, under the TSUS? Whether the failure to file a CF 4455 precludes item 806.30, TSUS, treatment for the imported clad copper strips. LAW AND ANALYSIS: ISSUE ONE The copper strip clad with cupro-nickel was entered at the port of Philadelphia, under item 612.41, TSUS, which pro ides for: "[b]ars, plates, sheets, and strips, all the foregoing which are wrought, of copper, whether or not cut, pressed or stamped to nonrectangular shapes: (n]ot cut, pressed, or stamped to nonrectangular shapes: (c]upro-nickel: (o)ther.11 The protestant claims that the merchandise is properly classifiable under item 612.31, TSUS, which provides for: "[b]ars, plates, sheets, and strips, all the foregoing which are wrought, of copper, whether or not cut, pressed, or stamped to nonrectangular shapes: (n)ot cut, pressed, or stamped to nonrectangular shapes: (c]opper, other than alloys of copper: (o]ther: [b)ars and sheets; and strips in coils." The Part 2, TSUS, headnotes state: This part covers precious metals and base metals (including such metals when they are chemically pure), their alloys...; and cladding. (d) the term "clad", as applied to metal products, refers to such products with two or more layers of metal of different colors or  natures which have been associated or bonded together by forging, hammering, rolling, or other mechanical or thermic process to insure welding or molecular interpenetration of the surfaces in contact. The "cupro-nickel strip" is essentially a strip of copper that has been clad (or sandwiched) by two layers or cupro-nickel. Therefore, the merchandise at issue is properly classifiable in item 612.31, TSUS, which provides for: "[b]ars, plates, sheets, and strips, all the foregoing which are wrought, of copper, whether or not cut, pressed, or stamped to nonrectangular shapes: [n)ot cut, pressed, or stamped to nonrectangular shapes: [c)opper, other than alloys of copper: [o]ther: [b)ars and sheets; and strips in coils." ISSUE TWO TSUS item 806.30 provides a partial duty exemption for: (a)ny article of metal (except precious metal) manufactured in the United States or subjected to a process of manufac­ ture in the United States, if exported for further process­ ing, and if the exported article as processed outside the United States, or the article which results from the pro­ cessing 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, nd 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 the U.S., upon compliance with 19 CFR 10.9. 19 CFR 10.9(a) states, in relevant part, as follows: Before the exportation of articles subject, on return to the United States, to duty on the value of the processing performed abroad as provided for in item 806.30, TSUS, a certificate of registration (top portion of Customs Form 4455) shall be filed (in an original only), by the owner or exporter with the District Director of Customs at a time prior to the departure of the exporting conveyance which will permit an examination of the articles. 19 CFR 10.9(i) provides a limited exception to the above documentary requirements. This provision states as follows: In any case where an imported article was exported for processing without compliance with the registration  requirements of this section, the district director, only if satisfied that the returned article is entitled to entry under item 806.30, TSUS, may waive the Customs Form 4455. The importer may establish eligibility for entry under item 806.30, TSUS, by providing sufficient documentation to Customs to prove actual exportation of the article from the U.S., such as foreign customs entry, a foreign customs invoice, a foreign landing certificate, bill of lading, or airway bill.... The regulation clearly allows the District Director discretion in determining whether to grant a waiver of the CF 4455. In this regard, the courts have held that an importer must produce all required information and documentation for each entry of merchandise, to assist customs in reaching a proper determination, and waiver of that basic requirement is on an individual basis only. Nassau Smelting and Refining Co. v. United States, Slip. Op. 89-158, 23 Cust. Bull. & Dec., No.49 (1989). Moreover, it well settled that compliance with mandatory regulations is a condition precedent to recovery and the burden of proof thereof rests on the protestant F.W. Meyers & Co. V. United States, 72 Cust. Ct. 113, C.D. 415 (1974). Since the record relects that your office has not granted a waiver of the CF 4455, partial duty allowance under item 806.30, TSUS, is precluded. HOLDING: The "Cupro-Nickel Strip'' is properly classifiable in item 612.31, TSUS, which provides for: "[b]ars, plates, sheets, and strips, all the foregoing which are wrought, of copper, whether or not cut, pressed, or stamped to nonrectangular shapes: [n]ot cut, pressed, or stamped to nonrectangular shapes: [c]opper, other than alloys of copper: [o]ther: [b]ars and sheets; and strips in coils." The portion of the protest relating to the classification of the merchandise should be allowed. On the basis of the information presented, it is our opinion that item 806.30, TSUS, treatment for the returned copper strips should be denied on the basis of the failure to meet the documentary requirements of 19 CFR 10.9(a). Therefore, the protest is granted in part and denied in part. A copy of this decision should be attached to the Form 19 and mailed to the protestant as part of the notice of action in the protest. Sincerely, John Durant, Director Commercial Rulings Division