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HQ 559492

June 14, 1996

CLA-2 RR:TC:SM 559492 KKV


TARIFF NO: 9801.00.60

District Director
U.S. Customs Service
San Francisco, CA 94105

RE: Application for Further Review of Protest No. 2809-95-100855; applicability of duty exemption under HTSUS subheading 9801.00.60 to articles of jewelry exported to Taiwan; HRL 067426; De Minimus sales

Dear Sir:

The above-referenced protest, timely filed on behalf of Ms. Tien Lee Chao, d.b.a. Tien Lee Fine Pearl, concerns your classification and duty assessment for articles of jewelry exported to Taiwan and then returned. Protestant claims that the articles at issue are eligible for a complete duty exemption under subheading 9801.00.60, Harmonized Tariff Schedule of the United States (HTSUS).


On September 13, 1994, Tien Lee Chao, d.b.a. Tien Lee Fine Pearl, presented certain articles of jewelry to Customs for registration. The CF (Customs Form) 4455 submitted gave "use abroad" as the reason for exportation and contained an alphabetical list of invoices describing the merchandise as well as photocopied photographs depicting the articles of jewelry to be registered. The CF 4455 was signed by Customs and returned to the exporter. On September 23, 1994, the entry subject to the protest was filed covering certain articles of jewelry returned to the U.S. under subheading 9801.00.60, HTSUS, as well as certain cultured pearls acquired abroad, under subheading 7116.10.1500. On January 20, 1995, the entry was liquidated as entered. Upon review however, it was determined that the importer failed to state the name of the show attended, or provide any other documents in support of the entered classification under subheading 9801.00.60, HTSUS. Accordingly, the entry was reliquidated on April 7,

1995, with all articles of jewelry classified under subheading 7113.19.5000, HTSUS, at a 6.5 percent duty rate.


Whether certain articles of jewelry registered with Customs prior to exportation from the U.S. to Taiwan for display use at an exhibition are eligible for duty-free treatment under subheading 9801.00.60, HTSUS.


Subheading 9801.00.60, HTSUS, (formerly item 802.30, Tariff Schedules of the United States (HTSUS)), provides for the free entry of articles which are returned after having been exported for temporary use abroad solely for exhibition or use in connection with any public exposition, fair, or conference, provided such articles are returned by or for the account of the person who exported them.

The Customs Service has addressed the requirements of subheading 9801.00.60, HTSUS, in several rulings. In Headquarters Ruling Letter (HRL) 067426, dated December 8, 1981, medical equipment was exported to Canada for exhibition and demonstration at a joint meeting of the International Society of Hematology and the International Society of Blood Transfusion. The meeting or conference was open only to members of these two societies, and not to the public at large. Therefore, it was found not to be a "public" conference, within the meaning of item 802.30, TSUS, and entry of the equipment under that provision was precluded.

In HRL 221961 dated May 15, 1990, which was a response to an internal advice request, a corporation exhibited jewelry and semi-precious and precious gemstones at the Hong Kong Watch and Jewelry Fair, and subsequently returned the articles to the U.S. We held that because the primary intention of the importer was to exhibit the goods at the trade fair and return them to the U.S., entry of the goods under subheading 9801.00.60, HTSUS, was not precluded. The fact that a secondary objective of the importer was the acquisition of future orders at the fair did not negate the primary intention of the company at the time of exportation to exhibit its wares. We found that the sole act of taking future orders, without delivery of any goods at the show, was not a sale of goods so as to preclude classification under subheading 9801.00.60, HTSUS. This finding was affirmed in HRL 222792 dated January 10, 1991, which was a reconsideration of HRL 221961. We noted in HRL 222792 that the trade fair's own rules prohibiting sales buttressed the importer's argument that its intent was not to sell goods at the fair.

In HRL 222792, Customs tangentially addressed the "public" requirement of subheading 9801.00.60, HTSUS. Even though the Hong Kong Watch and Jewelry Fair was allegedly open only to members of the watch and jewelry trades, Customs found no indication that the fair excluded the general public. More specifically, we stated that no evidence was presented, by way of brochures or other tangible proof, that "if the general public showed up at the fair and offered to pay admission (assuming one was needed) they would be excluded." We stated that the general public can be distinguished from those who belong to a private club or association where admission is restricted to members only.

In HRL 092277 dated December 9, 1968, machinery and equipment was to be displayed by sales representatives at an exposition held in conjunction with a nonprofit professional association's convention in Canada, and subsequently was to be returned to the U.S. A registration fee was charged for the convention, and the association targeted its advertising at its members and their guests. However, the association stated that if any person interested in the displayed equipment wished to attend the convention, he or she could do so. Therefore, Customs ruled that the convention was open to the "public" and was not a private sales exposition. Provided the documentary requirements were met, i.e.,section 10.66, Customs Regulations (19 CFR 10.66), the equipment would be eligible for duty-free treatment under item 802.30, TSUS, upon its return to the U.S.

Examination of the record before us in this case reveals little evidence concerning the nature of the event attended by the Protestant in Taiwan. The only document submitted is a copy of a letter from the Republic of China Overseas Trade Development Council addressed to the Ministry of Finance, Customs Bureau, which identifies Tien Lee Fine Pearl as a participant in the 1994 Taipei International Exhibition of Jewelry and Watches to be held September 15-18, 1994, and requests that the Ministry facilitate customs and duty procedures for the participant.

However, we have examined the photographs of the subject merchandise which were submitted to Customs upon registration of the articles prior to exportation. Inasmuch as these photographs reveal that the merchandise carried to the exposition consisted of a wide variety of individual pieces rather than multiple identical pieces of jewelry, they support the conclusion that the primary purpose of the exhibition was to acquaint potential purchasers with the range and quality of jewelry carried by the Protestant. Although notations on the entry invoices for the subject merchandise indicate that certain articles may have been sold while outside the U.S., the total amount of these sales is negligible in light of the value of the merchandise exported and subsequently imported. It is our determination that de minimus sales of merchandise at an exposition whose primary function is to acquaint prospective purchasers with the range and quality
of available goods, will not preclude the eligibility of such merchandise for duty-free treatment under 9801.00.60, HTSUS, upon its return to the United States.


Where articles of jewelry were registered with Customs prior to exportation from the U.S. for use at an exhibition, whose primary function is to acquaint prospective purchasers with the range and quality of available goods, de minimus sales of the exported articles will not preclude the eligibility of such merchandise for duty-free treatment under 9801.00.60, HTSUS, upon its return to the United States. Accordingly, with regard to the articles of jewelry registered prior to exportation, the protest is granted. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision, together with the Customs Form 19, should be mailed by your office to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.


John Durant, Director

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