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HQ 558877

June 27, 1995

CLA-2 CO:R:C:S 558877 DLD


District Director of Customs
555 Battery Street
San Francisco, CA 94111

RE: Decision on Application for Further Review of Protest No. 2809-94-101264. Subheading 9810.00.60 (HTSUS); Duty Free Treatment of Scientific Instruments.

Dear Sir:

This is in reference to the protest that was filed against your decision in the liquidation as dutiable of a transmission electron microscope (TEM) imported by the Georgia Institute of Technology (Georgia Tech).

The Georgia Institute of Technology purchased a transmission electron microscope from Hitachi Ltd. Of Japan on March 2, 1993. On April 16, 1993, Dr. Garth B. Freeman applied to Customs Headquarters for duty-free entry under subheading 9810.00.60 of the Harmonized Tariff Schedule of the United States (HTSUS).

In answer to application question 7.c. pertaining to commercial use of the instrument, the response was in part:

Research Description: A characterization program was established within GTRI [Georgia Tech Research Institute] in the late 1940's, primarily to provide analytical support to state and regional industry. This cost-recovery project continues as an important effort, serving both Georgia Tech research and regional industrial research programs. Emphasis on industrial interactions is placed on unusual or difficult analyses for which industrial research facilities are not equipped.

Accordingly, Customs asked Dr. Freeman on May 26, 1993, whether industry pays them for doing "unusual or difficult analyses for which [they, industry,] are not equipped" and whether the transmission electron microscope would be used in industrial research support. His response was: "Georgia Tech does contract with industry to do research on projects of mutual interest."

On the basis of these statements, the application was denied on August 6, 1993, by HQ decision letter 557337 DLD, on the grounds that it did not satisfy subsection 301.4(a)(3) of the joint regulations of the Department of Commerce and the Department of the Treasury (15 CFR 301.4(a)(3)). This subsection, one of three which is the responsibility of Customs, does not allow "commercial use" of the instrument of the application.

Accordingly, the entry pertaining to the importation (San Francisco entry no. XXXXXXXXXXXXX) was liquidated as dutiable by the San Francisco District on July 15, 1994. A protest was timely filed with the San Francisco District Director on September 14, 1994, with a request for further review. This is the response of Customs Headquarters to the protest and application for further review.

The protest states:

The ultimate end user of this product, Georgia Institute of Technology (GIT), submitted the application (file no.557337) for duty free entry to the Special Classification Branch in Washington. In response to a direct Customs inquiry regarding the application, the applicant mistakenly stated that the institution does contract with industry to do research on projects of mutual interest. Citing subsection 301.4(a)(3) of the joint regulations which precludes any usage for commercial purposes, the application was rejected by the Special Classification Branch. The entry was liquidated on 7/15/94 as entered.

In fact, while the GIT does receive financial support from commercial entities, this is not tied to any project for commercial gain. The electron microscope is located on the premises of the GIT School of Materials Science and Engineering whose primary mission is to educate students and to grant B.S., M.S. and Ph.D degrees in various fields of materials science and engineering. Funding from industry is primarily for the purpose of allowing students the opportunity to work on challenging problems for thesis research which is also practically relevant. Further, commercial funding supports only basic and generic technology development at the pre-competitive and pre-commercial stages. All research conducted on the electron microscope will be published in open literature and/or in proceedings of conferences open to everyone. This research is free of commercial interests.

Georgia Tech submitted, on April 17, 1995, a list of journal articles, theses and posters/conference proceedings pertaining to research performed with the use of the microscope of the protest in further support of their contention that the results of research were being made available to the public. (Customs may consider, pursuant to 15 C.F.R. 301.4(a)(3), whether research results will be timely and fully made available to the public.)

The Customs Service accepts the statements by Georgia Tech that the research is free of commercial interest, and therefore, the application will be approved by Customs and forwarded to the Department of Commerce for further review under the criteria relating to that department. A final decision on this protest will be made upon receipt of the final determination by the Department of Commerce.


John Durant, Director
Commercial Rulings Division

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