Subheading 9802.00.50, HTSUS; repaired printed circuit boards Dear Mr. Carrillo:

HQ 562443 July 17, 2002 CLA-2 RR:CR:SM 561989 KSG CATEGORY: Classification TARIFF NO.: 9802.00.50 Juan Jose Oscar Carrillo M.J. Carrillo Company, Inc. P.O. Box 1475 Laredo, Texas 78042-1475 RE: Subheading 9802.00.50, HTSUS; repaired printed circuit boards Dear Mr. Carrillo: This is in response to your letter of May 29, 2002, on behalf of Sony Electronics, Inc., asking for a binding ruling concerning the eligibility of imported repaired printed circuit boards ("PCB") for a duty exemption under subheading 9802.00.50 of the Harmonized Tariff Schedule of the United States (“HTSUS”). You submitted samples of the printed circuit boards, both before and after repair, for our examination. FACTS: Sony Electronics, Inc. proposes to repair non-working PCB's in Mexico. The PCB's are made in Japan. They are comprised of assembled diodes, capacitors, transistors, integrated circuits, electrical connectors and other electronic components. The PCB's in question are integral parts of digital still video cameras. The PCB's control the quality image on the camera, process the image captured by the optical lens, and convert it to a digital image. Inoperable PCB's are taken out of digital still video cameras in the U.S., collected at various locations, and shipped to Laredo, Texas. The PCB's are shipped to a plant in Mexico where the following processing occurs: The PCB's are sorted, and tested by being connected to a text fixture (a complete video camera in good operational condition that has the PCB removed); the technician determines the repair that needs to be done and the components that are damaged and may be causing problems; and the faulty components are replaced using a de-soldering iron. If the PCB does not require repair, it will be cleaned with airbrushes. Based on the facts presented, we are assuming for purposes of this ruling that the PCB's are not completely disassembled in Mexico. The PCB's are then tested, cleaned with an airbrush for dust removal and if necessary, a flux cleaning solution. The PCB's will then be placed in electro-static discharge protective bags with bubble packing and packed in cardboard boxes. The repaired PCB's are then shipped to the U.S. The PCB's are classified in subheading 8529.90.22, HTSUS, which provides for: "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Printed circuit assemblies: Other." ISSUE: Whether the repaired PCB's are eligible for a duty exemption under subheading 9802.00.50, HTSUS, upon importation into the U.S. LAW AND ANALYSIS: Articles exported from and returned to the U.S., after having been advanced in value or improved in condition by repairs or alterations, may qualify for a duty exemption under subheading 9802.00.50, HTSUS, provided the foreign operation does not destroy the identity of the articles or create new or commercially different articles. See A.F. Burstrom v. United States, 44 CCPA 27 (1956) and Guardian Industries Corporation v. United States, 3 CIT 9 (CIT 1982). Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. See Dolliff & Company, Inc. v. United States, 455 F. Supp. 618 (1978). Goods repaired or altered in Mexico or Canada are subject to the documentary requirements set forth in section 181.64(c), Customs Regulations (19 CFR 181.64(c)). Section 181.64(a), Customs Regulations (19 CFR 181.64(a)), provides that: For purposes of this section, “repairs or alterations” means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the U.S. For purposes of the duty allowance under subheading 9802.00.50, HTSUS, the replacement and/or addition of parts to restore products to their original condition may constitute repair operations, provided that the particular article does not lose its identity and the replacement and/or additions are not so extensive as to create a new or different article. See Press Wireless, Inc. v. United States, 6 Cust. Ct. 102 (1941). In Press Wireless, the court found that radio tubes or valves replaced with heavier filaments, allowing heavier amperage, were "repaired" within the meaning of paragraph 1615,Taroff Act of 1930 ( a precursor provision of subheading 9802.00.50, HTSUS). Additionally, the court found that the identical tubes were returned in a "condition of restoration to their original efficiency," and noted that an automobile repaired with materials of a heavier and superior quality than the worn-out parts would still be the same automobile, and that a fur coat relined with a superior material would still be the same coat. The court held that the use of improved materials in the restoration was immaterial, as long as the article was not considered a new and different article of commerce or its identity was destroyed. Thus, application of this tariff provision is precluded where the foreign operation destroys the identity of the exported article or creates a new or different commercial article. The replacement and/or addition of parts to restore products to their original condition may constitute repair operations for purpose of subheading 9802.00.50, HTSUS, if the particular article does not lose its identity and the replacements and/or additions are not so extensive as to create a new or different article. In Amity Fabrics, Inc. v. United States, 43 Cust.Ct. 64, 305 F.Supp. 4 (1959), unfashionable "pumpkin" colored cotton twill-back velveteen was exported to be redyed black, which was a more marketable color. The court found that the merchandise was advanced in value and improved in condition commercially by the dying operation and that such change constituted an alteration under paragraph 1615(g) of the Tariff Act of 1930 ( a precursor provision of subheading 9802.00.50, HTSUS). The court further found that "the identity of the goods was not lost or destroyed by the dying process; no new article was created; there was no change in the character, quality, texture, or use of the merchandise; it was merely changed in color." In Headquarters Ruling Letter ("HRL") 554952, dated March 14, 1989, Customs held that used casting molds re-formed by an "explosive forming" process which consisted of removing the chrome surface, grinding away defects, fitting a mandrel into the used mold, wrapping a plastic explosive around the casting, immersing the unit into water, and detonating the explosive merely restored the exported casting molds to their original condition, and therefore, constituted a repair for purposes of TSUS item 806.20 (the precursor to subheadings 9802.00.40 and 9802.00.50, HTSUS). In HRL 957375, dated April 19, 1995, Customs considered wax pattern dies (aluminum molds used for the production of patterns made of wax) which were exported to England for repair by reworking/resharpening of the edges. The wax pattern dies were previously manufactured articles which became worn out from repeated use. Customs determined that the used dies were completed articles in their condition as exported, and did not require the addition of any other component or attachment in order to function properly. Customs concluded that the foreign resharpening operation, which restored the dies to their original condition, did not create a new or commercially different article, nor change the character or use of the wax pattern die and held that the reworking/resharpening operation constituted a repair for purposes of subheading 9802.00.50, HTSUS. Like the casting molds in HRL 554952 and the wax pattern dies in HRL 957375, the used PCB's are previously manufactured articles which have become worn out or are non-functional. The PCB's are completed articles in their condition as exported to Mexico prior to undergoing repair. The repair operation, which consists primarily of replacing faulty components, restores the PCB's to their original condition and does not create a new or commercially different article. Accordingly, based on the information presented, the repaired PCB's are eligible for a duty exemption under subheading 9802.00.50, HTSUS, upon importation into the U.S., provided the documentary requirements of 19 CFR 181.64(c) are satisfied. HOLDING: Based on the information submitted, the repaired printed circuit boards are eligible for a duty exemption under subheading 9802.00.50, HTSUS, upon importation into the U.S., provided the documentary requirements of 19 CFR 181.64(c) are satisfied. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Myles B. Harmon, Acting Director Commercial Rulings Division