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HQ 556528

May 27, 1992
CLA-2 CO:R:C:S 556528 SER


TARIFF NO.: 9801.00.20

District Director
U.S. Customs Service
Pembina, ND 58271

RE: Application for Further Review of Protest No. 3401-91- 100075; 9801.00.20, HTSUSA; label applicator machine; documentation; 19 CFR 10.1(a)

Dear Sir:

The above-referenced protest concerns your classification and duty assessment of a label applicator machine from Canada. Protestant claims that the article at issue is eligible for duty- free treatment under subheading 9801.00.20, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), a claim which you have denied.


The article at issue is a label applicator machine. The importer/protestant has provided some documentation which indicate that a labeling machine was originally imported into the United States from Israel. The labeling machine was then stated to be shipped to Canada and subsequently returned to the United States.

Three documents were provided to support these transactions. One document is a Customs Form (CF) 7501, indicating an importation by the importer/protestant of a labeling machine from Israel. However, no serial number or detailed description was included on this form. A second document-- Canadian Customs invoice-- indicates importation into Canada of a labeling applicator machine. And, finally, another CF 7501 indicating an importation by the protestant of a labeling applicator machine from Canada.

You denied duty-free treatment under subheading 9801.00.20, HTSUSA, on the basis that the importer failed to provide sufficient documentation or information to show that the label applicator machines at issue was imported, exported and reimported.n -2-


Whether the labeling applicator machine at issue is eligible for duty-free treatment under subheading 9801.00.20, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).


Subheading 9801.00.20, HTSUSA, provides duty-free treatment for "articles previously imported, with respect to which the duty was paid upon such previous importation, ... if [the articles are] (1) reimported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, after having been exported under lease or similar use agreements, and (2) reimported by or for the account of the person who imported it into, and exported it from, the United States." Articles satisfying the above conditions will be afforded duty-free treatment, provided the documentation requirements of section 10.1, Customs Regulations (19 CFR 10.1), are satisfied.

Section 10.1(a), Customs Regulations (19 CFR 10.1(a)), outlines the necessary documentation required for duty-free entry under subheading 9801.00.10, and subheading 9801.00.20, HTSUSA. The documentation consists of Customs Form 3311, the bottom portion of which must be executed by the district director at the port of exportation, and a declaration of the foreign shipper. However, Section 10.1(c), provides that if the district director is reasonably satisfied, based on the nature of the articles or production of other evidence, that the articles are imported in circumstances meeting the requirements of subheading 9801.00.20, HTSUSA, the district director may waive the requirements of producing the documents specified above.

It is clear that the documentation requirements of 19 CFR 10.1 have not been satisfied for the entry of the labeling machine at issue. Moreover, as your office is unable to verify from the evidence presented by the protestant that the same merchandise was imported from Israel, exported to Canada, and reimported under the conditions required by subheading 9801.00.20, HTSUSA, no waiver of the documentation requirements was granted by your office. Additionally, there is no evidence provided to indicate that the labeling applicator machine was exported under a lease or similar use agreement as is required by subheading 9801.00.20, HTSUSA. Therefore, the labeling machine is ineligible for duty-free treatment under subheading 9801.00.20, HTSUSA.


Based on the information submitted, since no evidence was provided which would indicate that the labeling applicator machine at issue was exported under lease or similar use agreement, nor was the proper documentation required to receive duty-free treatment under subheading 9801.00.20, HTSUSA, provided to Customs, this protest should be denied in full. A copy of this decision should be attached to Customs Form 19 and sent to the protestant as part of the notice of action on the protest.


John Durant, Director

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