Applicability of duty exemption under subheading 9802.00.50, HTS, to ceramic cutting tool inserts

NY J80003 February 6, 2003 CLA-2-69:RR:NC:2:227 J80003 CATEGORY: Classification TARIFF NO.: 6909.19.50; 9802.00.50 Mr. Greg Osnes Kyocera Industrial Ceramics Corporation 5713 E. Fourth Plain Blvd. Vancouver, WA 10119 RE: Applicability of duty exemption under subheading 9802.00.50, HTS, to ceramic cutting tool inserts Dear Mr. Osnes: In your letter dated January 10, 2003, you requested a ruling on the classification and applicability of subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTS), to ceramic cutting tool blanks which are finished in China and imported into the U.S. Samples will be returned as requested. You state that the ceramic blanks, manufactured in the U.S., are sent to China where they will have the edges ground and polished. The finished cutting tool inserts will be returned to the U.S. and used in a lathe for roll turning in steel mills. The value of the ceramic blanks is $5.00 per piece and the value of the work in China is $3.50 per piece. Subheading 9802.00.50, (HTS), provides for the assessment of duty on the value of repairs or alterations performed on articles sent abroad for that purpose. However, the application of this tariff provision is 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. On the basis of the information submitted, we find that the ceramic cutting tool blanks exported to China are incomplete for their intended use and that the grounding and polishing operations are necessary steps in the preparation of the articles as finished cutting tool inserts. Consequently, the inserts are not entitled to subheading 9802.00.50, HTS, treatment. The applicable subheading for the ceramic cutting inserts will be 6909.19.50, (HTS), which provides for ceramic wares for other technical uses, other. The duty rate will be 4 percent ad valorem. The country of origin of the imported ceramic cutting inserts is China and must be marked accordingly. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist George Kalkines at 646-733-3028. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division