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HQ 559578




RR:TC:SM 559578 DLD
March 25, 1996

CATEGORY:CCLASSIFICATION

Port Director
U.S. Customs Service
Room 2100
1000 2nd Avenue
Seattle, WA 98104

RE: Decision on Application for Further Review of Protest No. 3001-95-10070-6. Subheading 9810.00.60, HTSUS: Duty Free Treatment of Scientific Instruments.

Dear Sir:

This protest was filed against your decision in the liquidation as dutiable of a SeaSoar underwater towed vehicle system imported by the Lamont-Doherty Earth Observatory of Columbia University.

FACTS:

The Lamont-Doherty Earth Observatory of Columbia University placed an order on May 3, 1995, with an English manufacturer for a SeaSoar Mark II Towed Vehicle System. On May 31, 1995, Dr. Taro Takahashi applied to Customs Headquarters for duty-free entry for the towed vehicle system under Subheading 9810.00.60, HTSUS. The application was denied on October 4, 1995. The denial letter stated as the basis for the denial:

It is our determination that the SeaSoar underwater towed vehicle system is not eligible for duty-free entry under subheading
9810.00.60, HTSUS, inasmuch as it is a "component" within the meaning of the regulations. By itself, the vehicle can perform no scientific function. Although the manufacturer, Chelsea Instruments
Ltd., is able to provide scientific instrumentation for the vehicle, there is none being imported in connection with this application. In re- sponse to our inquiry of July 18, 1995, you stated that "[t]he sensor suite consisting of CTD [conductivity, temperature and depth], oxy- gen, chlorophyll-a and PAR [photosynthetically active radiation] will not be built into the SeaSoar as imported." Accordingly, the vehicle as imported is a component of the underwater vehicle system assem- bled in the U.S. which consists of the vehicle, the scientific instru- mentation and the towing gear.

Pursuant to subsection 301.2(k) of the joint regulations of the
Department of Commerce and the Department of the Treasury (15
CFR 301.2(k)), applications for duty-free entry under subheading
9810.00.60, HTSUS, cannot be approved for components of instru- ments being manufactured or assembled in the U.S. A "component" is a part or assembly of parts which is substantially less than the in- strument to which it relates. A component enables an instrument to function at a specified minimum level. That is, a component is a nec- essary part of an instrument but is not itself an instrument.

In the meantime, on July 3, l995, the SeaSoar had been imported into the U.S. Accordingly, the entry for the SeaSoar was liquidated as dutiable on October 10, 1995. A protest was timely filed with the Seattle District Director of Customs on October 20. 1995. The protest was subsequently forwarded to Customs Headquarters for further review pursuant to 19 CFR 174.24(c). This is the response of Customs Headquarters to the protest.

The protest states that the towed vehicle can be controlled from the ship to adjust the depth of the vehicle and can be made to undulate between certain depths as it is towed through the water.

All measuring instrumentation, e.g., the sensor suite mentioned in the denial letter of October 4, 1995, was fitted to the SeaSoar in the U.S. It was not imported from the manufacturer of the SeaSoar vehicle, but was purchased elsewhere as a package.

The protest argues that, inasmuch as the SeaSoar (as imported without instrumentation) can be controlled as to depth and be made to undulate with respect to depth when towed through the water, the SeaSoar "is the primary instrument of the project." As such, the protest maintains that it should be allowed duty-free treatment as a scientific instrument under subheading 9810.00.60, HTSUS.

ISSUE:

Does an underwater towed vehicle imported by the Lamont-Doherty Earth Observatory of Columbia University qualify as a scientific instrument or apparatus under subheading 9810.00.60, HTSUS?

LAW AND ANALYSIS:

The protestant states that the SeaSoar vehicle, as imported, is not a mere shell but "incorporates a hydraulic control unit for wing angle adjustment to control the depth, and a pressure transducer sensor to interact with the control unit on the deck of the ship." Furthermore, it has the "capability to undulate in the upper ocean".

Customs maintains that these incorporated capabilities merely allow for the control of the SeaSoar's navigation in the water. They have nothing to do with the scientific measuring which is to be performed by the operational vehicle after it has been fitted with measuring instrumentation. Accordingly, Customs affirms its position that the SeaSoar, as imported, can perform no scientific function. Hence, it is less than a scientific instrument and must be considered a component. Pursuant to the regulations (15 CFR 301.2(k)), components are not eligible for duty-free treatment under subheading 9810.00.60, HTSUS. In addition, pursuant to the same subsection of the regulations, the SeaSoar, as imported, must be considered a component of an instrument to be assembled in the U.S., namely, the towed vehicle after it has been fitted with instrumentation. Applications for duty-free treatment for such components cannot be approved (15 CFR 301.2(k)).

HOLDING:

The protest is denied in full. It is affirmed that the SeaSoar, as imported, is a component of an instrument to be assembled in the U.S. and therefore ineligible for duty-free treatment under subheading 9810.00.60, HTSUS, pursuant to 15 CFR 301.2(k).

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, a copy of this decision should be attached to the Customs Form 19 and mailed by your office to the protestant as part of the notice of action on the protest 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.

Sincerely,

John Durant, Director
Commercial Rulings Division

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