Applicability of HTSUSA subheading 9802.00.60 to steel plates subjected to cutting, bending, beveling, and trimming; C.S.D. 84-49, HRL 555620

HQ 556123 July 30, 1991 CLA-2 CO:R:C:S 556123 SER CATEGORY: Classification TARIFF NO.: 9802.00.60 Mr. Thomas F. Murphy CBI Services, Inc. St. George Road Bourbannais, Il 60914-9799 RE: Applicability of HTSUSA subheading 9802.00.60 to steel plates subjected to cutting, bending, beveling, and trimming; C.S.D. 84-49, HRL 555620 Dear Mr. Murphy: This is in reference to your letter of May 23, 1991, concerning the applicability of subheading 9802.00.60, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), to certain steel plates to be imported from Canada. FACTS: CBI Services, Inc. will purchase U.S.-manufactured steel plates, ultimately to be used for waste treatment facilities. The steel will be in sizes of up to 10 feet wide and 35 feet long, ranging in thickness from 3/16 inches to 2 3/4 inches. The plates will be exported to Canada where they will be cut to various sizes and formed to spherical, conical and cylindrical shapes. They are then burned to exact sizes and the edges are beveled to allow the plates to be welded together. The plates are then returned to the U.S. and delivered to a construction site where blank nuts are welded to the plates in addition to other "fit-up gadgets". The plates are then bent, formed and trimmed (if necessary) to the specifications needed for the waste treatment tanks. After the basic tank is welded together the plates are then processed for nozzles and manholes. Holes are burned into the plates and are then beveled to allow welding of the manholes and nozzles to the plates. Anchor bolts will then be attached to the plates to anchor the tanks to foundations, and studs will be welded to some of the plates for anchorage to the foundation wall. Stairway platforms and walkways will be welded to the plates, and piping will be bolted to the nozzles. The tank plates will then be sand blasted to remove scale and rust, and the outside of the tank will be insulated and painted.n-2- ISSUE: Whether the steel plates will be eligible for the partial duty exemption available under subheading 9802.00.60, HTSUSA, when imported into the U.S. LAW AND ANALYSIS: Subheading 9802.00.60, HTSUSA, provides a partial duty exemption for: [a]ny article of metal (as defined in U.S. note 3(d) of this subchapter) manufactured in the United States or subject to a process of manufacture in the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing. This tariff provision imposes a dual "further processing" requirement on eligible articles of metal-- one foreign, and when returned, one domestic. Metal articles satisfying these statutory requirements may be classified under this tariff provision with duty only on the value of such processing performed outside of the U.S., provided there is compliance with the documentary requirements of section 10.9, Customs Regulations (19 CFR 10.9). In C.S.D. 84-49, 18 Cust.Bull. 957 (1983) we stated that: [f]or purposes of item 806.30, TSUS [precursor to 9802.00.60 HTSUSA], the term "further processing" has reference to processing that changes the shape of the metal or imparts new and different characteristics which become an integral part of the metal itself and which did not exist in the metal before processing; thus, further processing includes machining, grinding, drilling, threading, punching, forming, plating, and the like, but does not include painting or the mere assembly of finished parts by bolting, welding, etc. In this case, the steel plates are eligible articles of metal for purposes of subheading 9802.00.60, HTSUSA. In addition, the cutting and forming operations in Canada are considered "further processing" under this tariff provision. In Headquarters Ruling Letter (HRL) 555620 dated August 3, 1990, we held that performing cutting and bending operations on stainless steel articles constitutes a further processing operation pursuant to subheading 9802.00.60, HTSUSA. In addition, the forming operations in Canada clearly fall within the processing operations discussed in C.S.D. 84-49, which enumerates forming as an example of further processing.n -3- Furthermore, to the extent that all of the returned steel plates will be subjected to one or more of the following operations in the U.S.: bending, forming, trimming, and burning of holes, we find that the plates comply with the domestic "further processing" requirement of subheading 9802.00.60, HTSUSA, under C.S.D. 84-49. HOLDING: On the basis of the information submitted, it is our opinion that the processes performed abroad and upon return of the steel to the U.S. constitute "further processing" as that term is used in subheading 9802.00.60, HTSUSA. Therefore, the imported steel plates will be entitled to classification under this tariff provision with duty only on the cost or value of such processing performed outside the U.S., upon compliance with the documentary requirements of 19 CFR 10.9. Sincerely, John Durant, Director