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NY 850689

April 6, 1990

CLA-2-84:S:N:N1:104 850689


TARIFF NO.: 8466.93.7080

Mr. Frank J. Schuchat
Paul, Weiss, Rifkind, Wharton & Garrison
1615 L Street, N.W.
Washington, D.C. 20036

RE: The tariff classification of machine tool parts from Japan.

Dear Mr. Schuchat:

In your letter dated March 19, 1990 on behalf of Mitsubishi Heavy Industries America, Inc. ("MHIA") of Wood Dale, Illinois you requested a tariff classification ruling.

MHIA will be importing components for machining centers and CNC lathes which will be combined with components procured in the United States. The machines will be assembled at the Hopkinsville, Kentucky facility of American Precision Machinery, Inc. ("APM") The machining centers include the M-H50C/60C (horizontal) and the M-V60C/70C/40A (vertical). The lathes include the 8A/10A and 8S.

The machining center components to be imported will include the bed, column, spindle assembly, spindle motor, ATC, electrical system and hydraulic system for both plus a saddle for the vertical series. Components added in the U.S. will include the table, headstock, ballscrews, NC device, software, servo motors, servo drives, coolant system, lubrication system, pneumatic system, chip removal system and sheet metal fabrication plus the saddle for horizontal series.

The lathe components to be imported will include the bed, spindle assembly, spindle motor and electrical system plus the chip removal system for the 8A/10A and the servo motor and drives for the 8S. Components added in the U.S. will include the headstock, carriage, cross slide, turret, ball screws, NC device, software, coolant and lubrication systems and sheet metal plus the servo motors and drives for the 8A/10A and the chip removal system for the 8S.

You state that MHIA estimates that it will take APM approximately 610 hours to complete a single machine tool assembly, including subassembly production (340 hours) and joining of subassemblies into a complete unit (270 hours). As far as a cost comparison is concerned, MHIA estimates the total cost of materials, machining, purchased items, and assembly for a model M-H50C horizontal machining center to be approximately $181,000. Of this amount, at least $107,200. (60 percent) is attributable to the U.S additions while the balance is attributable to imported parts and components. You indicate that while individual costs may vary, the overall allocation is substantially equivalent for other models.

The applicable subheading for the machine tool * will be 8466.93.7080, Harmonized Tariff Schedule of the United States (HTS), which provides for parts suitable for use solely or principally with the machines of headings 8456 to 8461. The rate of duty will be 4.7 percent ad valorem.

While parts are generally not subject to the Voluntary Restraint Agreements on machine tools with Japan and Taiwan, the Department of Commerce may regard your assembly as an unfinished machine tool and require an Export license. It is suggested that you write to the Director, Office of Agreements Compliance, International Trade Administration, Department of Commerce, Washington, D.C. 20230 for clarification.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


Jean F. Maguire
Area Director

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