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HQ 557294

August 26, 1993

CLA-2 CO:R:C:S 557294 MLR


TARIFF NO.: 9802.00.40

District Director
U.S. Customs Service
P.O. Box 619050
1205 Royal Lane
Dallas/Fort Worth, TX 75261

RE: Applicability for Further Review of Protest No. 5501-92- 100369; Denial of partial duty exemption under HTSUS subheading 9802.00.40 to a multi-parameter indicator; documentation; 19 CFR 10.8

Dear Sir/Madam:

This is in reference to a protest and application for further review filed by I.C.E. Co., Inc. ("I.C.E.") on behalf of Bell Helicopter Textron Inc. ("Bell"), contesting the denial of the partial duty exemption under subheading 9802.00.40, Harmonized Tariff Schedule of the United States (HTSUS), to a multi-parameter indicator ("indicator").


The record reflects that Bell imported an indicator from Canada on December 18, 1990, and filed entry no. 153-00355631 on December 21, 1990, seeking a duty exemption under subheading 9808.00.30, HTSUS. Because the Defense Contract Administration Services Region, New York (DCASR-NY) Defense Logistic Agency denied the duty-free entry certification, I.C.E. notified the District Director in Irving, Texas, of this fact in a letter dated September 11, 1991, and changed the claim on the entry to the partial duty exemption under subheading 9802.00.40, HTSUS. The letter also states that a Repair Declaration issued by Canadian Marconi, Company, was being submitted, and that I.C.E. should be notified if further documentation is required. (The record submitted to our office did not contain the Repair Declaration). However, the entry was liquidated on August 28, 1992, under subheading 9031.80.00, HTSUS, because the proper documentation required for subheading 9802.00.40, HTSUS, treatment was not provided. The Customs Protest and Summons Information Report indicates that the documentation is required by section 10.24, Customs Regulations (19 CFR 10.24). This protest, filed October 13, 1992, followed.

Our office contacted I.C.E., who provided the Repair Declaration prepared by Canadian Marconi Co. acknowledging receipt of the indicator for the purpose of repairs, and attesting that no substitution of the exported merchandise was made. I.C.E. has also informed our office that the export shipping documents are in Bell's "dead" storage and that getting this information and a description from Canadian Marconi Co. of the repairs conducted is not economically feasible at this time.


Whether the multi-parameter indicator imported into the U.S. is entitled to the partial duty exemption under subheading 9802.00.40, HTSUS.


Subheading 9802.00.40, HTSUS, provides a partial duty exemption to articles returned to the U.S. after having been exported to be advanced in value or improved in condition by repairs or alterations. Such articles are dutiable only upon the value of the foreign repairs or alterations, provided the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8) (not 19 CFR 10.24), are satisfied.

The duty exemption provided under subheading 9802.00.40, HTSUS, is a privilege, and it is well settled that compliance with mandatory regulations is a condition precedent to recovery and that the burden of proof thereof rests on the protestant. See F.W. Myers & Co., v. United States, C.D. 4515, 72 Cust. Ct. 133, 374 F. Supp. 1395 (1974); H.F. Keeler v. United States, C.D. 1842, 38 Cust. Ct. 48 (1957); and Pacific Customs Brokerage Co. v. United States, T.D. 48887, 71 Treas. Dec. 530 (1937).

In 1972, the regulations applicable to repaired/altered merchandise were revised. T.D. 72-119, 6 Cust. Bull. 209. These regulations, published at 19 CFR 10.8, provide that there shall be filed: (1) prior to exportation of the articles to be repaired or altered, a Certificate of Registration (Customs From 4455) to permit the district director to examine such articles before they are exported; and (2) in connection with an entry, a repair declaration from the person who performed the repairs or alteration in substantially the form set forth at subsection (e), the Certificate of Registration, and a declaration, made by the owner, importer, consignee, or agent having knowledge of the facts, that the articles entered in their repaired or altered condition are the same articles covered by the Certificate of Registration. The information sought by the documentary requirements of 19 CFR 10.8 is designed to enable Customs to verify that the articles returned are the same as the articles exported and that they were repaired/altered within the meaning of subheading 9802.00.40, HTSUS. Thus, compliance with these documentary requirements is essential to establish the identity of the articles returned and their eligibility for the partial duty exemption provided.

The form the required Repair Declaration is to follow embraces two broad elements: (1) it requires identifying information from the person performing the repairs in the format of a recital containing five substantive clauses; and (2) it requires the person performing the repairs to provide information concerning the nature of the repairs effected and the identity of the articles repaired based on personal observation. The descriptive information required is more detailed than the information required on a Customs Form 4455, as it requires identification marks and numbers, where available, in addition to a general description of the merchandise which is common to both forms.

In Headquarters Ruling Letter (HRL) 555413 dated September 5, 1990, subheading 9802.00.40, HTSUS, treatment to certain phones was denied because the protestant did not adequately comply with the documentary requirements of 19 CFR 10.8. One of the reasons for the denial was because the Repair Declaration provided did not describe the nature of the repairs performed, nor did it describe the identity of the phones other than by stating the number of units and cartons in the shipment. The other reason for denying the protest was because when Customs questioned the protestant whether the phones had serial numbers, the protestant responded that only two phone models had serial numbers; however, after examining the shipment, it was discovered that another phone model, not mentioned by the protestant, was found with serial numbers.

As in HRL 555413, the Repair Declaration submitted in this case does not describe the nature of the repairs performed. However, subsections (i), (j), and (k) of section 10.8, Customs Regulations {19 CFR 10.8(i), (j), and (k)} do provide for the waiver of certain documents by the district director. These provisions are not applicable in this case. Subsection (i) does not apply because, even if the declarations provided for in subsections (e) and (f) are waived, the registration requirements of subsection (a) were not met. Subsection (j) does not apply because the registration requirements were not met; consequently the production of Customs Form 4455 may not be waived. Lastly, subsection (k) does not apply because the registration requirements were not met, and no other documentation has been presented to prove the actual exportation of the indicator. Under these circumstances, we believe that the protestant has failed to adequately comply with the documentary requirements of 19 CFR 10.8.


On the basis of the information submitted, we find that the protestant has failed to adequately comply with the documentary requirements of 19 CFR 10.8 so as to establish that the indicator imported is the same as that exported. Therefore, the indicator is not entitled to subheading 9802.00.40, HTSUS, treatment. Accordingly, this protest should be denied. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the protestant.


John Durant, Director

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