Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.50 or 9802.00.80 to concrete reinforcement bar mats imported from Mexico

HQ 555321 January 16, 1990 CLA-2 CO:R:C:V 555321 GRV CATEGORY: CLASSIFICATION TARIFF NO.: 9802.00.50 and 9802.00.80 Mr. Brent Baucum Fab Cast Industries P.O. Box 27020 El Paso, Texas 79926 RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.50 or 9802.00.80 to concrete reinforcement bar mats imported from Mexico Dear Mr. Baucum: This is in response to your letter of February 20, 1989, requesting a ruling on the applicability of subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), to concrete reinforcement bar mats to be imported from Mexico. FACTS: You state that you currently export to Mexico U.S. concrete reinforcement bars (rebars) in 40 foot lengths where they are cut into smaller pieces ranging from 10 to 20 foot sections, and import these rebars under the provisions of HTSUS subheading 9802.00.50 (the repairs and alterations provision). You now propose to tie these cut rebar sections into a mat (grid) form with bailing wire, and import them under the same tariff provision. ISSUE: Whether the rebar mats are eligible for a duty exemption under either HTSUS subheading 9802.00.50 or 9802.00.80 when imported into the U.S. LAW & ANALYSIS: Articles returned to the U.S. after having been exported to be advanced in value or improved in condition by repairs or alterations may qualify for the partial duty exemption under HTSUS subheading 9802.00.50, provided the foreign operation does not destroy the identity of the exported articles or create new or different articles. Baylis Brothers Co. United States, 64 Cust.Ct. 256, C.D. 3987 (1970). Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations, provided the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8), are satisfied. In the instant case, we believe that the tying of the cut rebar with bailing wire exceeds the scope of an "alteration" within the meaning of HTSUS subheading 9802.00.50. This deter- mination is based on the fact that the rebar mats to be imported will be subject to different product specifications established by the American Society for Testing and Materials (ASTM) than the rebars that are merely cut to shorter lengths. ASTM is an association which establishes voluntary consensus standards for materials, products, systems, and services. Customs and the courts have relied upon and applied ASTM product standards as authoritative guidelines in resolving questions of classifica- tion, where appropriate and relevant statutory requirements have permitted. See, Coastal States Marketing, Inc., v. United States, 10 CIT 613, 646 F.Supp. 255 (1986). In this case, we believe the applicability of ASTM product standards to the subject merchandise is appropriate. Normally, rebar is subject to ASTM designation A 615 (stand- ard specifications for concrete reinforcement), A 616 (rail-steel bars for concrete reinforcement), or A 617 (axle-steel bars for concrete reinforcement). However, the standard specification for fabricated deformed steel bar mats for rebar is ASTM designation A 184. This change in the applicable ASTM specifications mili- tates against a finding that the rebar mat products imported are the same rebar products that were exported and indicates that the rebar mats will be new or different commercial articles for purposes of HTSUS subheading 9802.00.50. Accordingly, we find that the tying of the cut rebar with bailing wire renders it ineligible for the benefits of this tariff provision. However, the information submitted indicates that an allow- ance in duty for the foreign assembly of the rebar mats may be made under HTSUS subheading 9802.00.80 upon importation from Mexico. HTSUS subheading 9802.00.80 provides a partial duty exemption for: [a]rticles assembled abroad in whole or in part of fab- ricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process such as cleaning, lubricating, and painting. An article entered under this tariff provision is subject to duty upon the full value of the imported assembled article, less the cost or value of the U.S. components, provided there is compli- ance with the documentation requirements of 19 CFR 10.24. In this case, the preliminary foreign operation of cutting the rebar to length constitutes an operation incidental to assembly (see, 19 CFR 10.16(b)(6)), and the tying of the rebar with bailing wire constitutes an assembly of the U.S. rebar components (see, 19 CFR 10.16(a)). HOLDING: On the basis of the information provided and the applicable ASTM product standards, tying the cut rebar lengths into rebar mats with bailing wire exceeds an "alteration," within the meaning of HTSUS subheading 9802.00.50, as the imported product will be a new or different article from that which was exported. However, allowances in duty may be made under HTSUS subheading 9802.00.80 for the cost or value of the U.S. components comprising the tied rebar mats to be imported from Mexico, upon compliance with the documentary requirements of 19 CFR 10.24 (copy enclosed). Sincerely, John Durant, Director Commercial Rulings Division Enclosure