HQ 555740

May 28, 1991

CLA-2 CO:R:C:S 555740 DSN

CATEGORY: Classification

TARIFF NO.: 9802.00.50

Margaret R. Polito, Esq.

Coudert Brothers

200 Park Avenue

New York, New York 10166

RE: Applicability of a partial duty exemption for herbicide;

19 CFR 10.8; 076499; Burstrom; Guardian; Dolliff

Dear Ms. Polito:

This is in response to your letters of September 21, 1990,

and April 1, 1991, on behalf of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(hereinafter referred to as the importer) requesting a ruling on

the applicability of subheading 9802.00.50, Harmonized Tariff

Schedule of the United States (HTSUS), to a herbicide imported

from France for use in agriculture. We regret the delay in

responding.

You ask that confidential treatment be accorded under 5

U.S.C. 552(b) and 19 CFR 103.12(d) regarding your request, and

this ruling letter. You state that release of this information

would cause significant harm to the importer. As requested,

confidential treatment will be accorded to the portions of your

request that are marked \"confidental\" and those portions of this

ruling letter that are in brackets.

FACTS:

The importer produces a herbicide in Puerto Rico referred to

as \_\_\_\_\_\_\_. This herbicide is specifically designed for

commercial agricultural use. The herbicide is intended to

destroy weeds that interfere with crop growth. The herbicide is

created through a chemical reaction between two intermediates

\_\_\_\_\_\_\_\_\_\_\_\_\_ which creates a new molecule with a different

chemical structure. The resulting product, \_\_\_\_\_\_\_ when mixed

with water is capable of being used by farmers to control weeds

via aerial dusting or spraying.

In an effort to make \_\_\_\_\_\_\_\_\_ more marketable, and \"user

friendly\", your client exports the herbicide to France where it

is subjected to processess of formulation and granulation. These

processes eliminate the product\'s powdery consistency which makes

the chemical difficult to measure, as well as minimize the

agitation required to disperse the chemical in water. The

resulting chemical is referred to as \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
which, like

\_\_\_\_\_\_\_\_\_\_ is registered with the Environmental Protection
Agency

(EPA) as an herbicide. You state that different formulations of

the same product must be separately registered with the EPA.

As part of the formulation process, \_\_\_\_\_\_\_\_\_ is mixed with

inert ingredients, namely a dispersant
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, two

wetting agents \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
and a diluent clay.

The formulation process does not alter the chemical composition

of \_\_\_\_\_\_\_\_\_\_\_\_ although the color of the chemical is
changed.

The purpose of the formulation process is to enhance the

product\'s water soluability so that less agitation is required

for proper mixing.

The granulation process consists of placing the \[L5300\] and

inert ingredients into a granulator and spraying with water.

Heat is then applied to remove excess water. All uneven grains

are separated from the mixture leaving grains of uniform size.

This process eliminates the powdery consistency thereby rendering

the product easier for a farmer to measure, while not changing

the chemical composition of \_\_\_\_\_\_\_.

ISSUE:

Whether the formulation and granulation processes performed

on the U.S.-origin herbicide constitute an alteration, thereby

entitling it to the partial duty exemption available under

subheading 9802.00.50, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9802.00.50, HTSUS, provides a partial duty

exemption for articles returned to the U.S. after having been

exported to be advanced in value or improved in condition by

repairs or alterations. Such articles are dutiable only upon the

value of the foreign repairs or alterations when returned to the

U.S., provided the documentary requirements of section 10.8,

Customs Regulations (19 CFR 10.8), are satisfied.

The application of this tariff provision is precluded in

circumstances where the operations performed abroad destroy the

identity of the articles or create new or commercially different

articles. See, A.F. Burstrom v. United States, 44 CPU 27, C.A.D.

631 (1956), aff\'g, C.D. 1752, 36 Cust. Ct. 46 (1956); Guardian

Industries Corporation v. United States, 3 CIT 9 (1982), Slip Op.

82-4 (Jan. 5, 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. Dolliff & Company, Inc. v. United States, 81 Cust. Ct.

1 C.D. 4755, 455 F. Supp. 618 (1978), aff\'d, 66 CPU 77, C.A.D.

1225, 599 F.2d 1015 (1979).

With regard to the facts that you have presented and based

on the above cases, we are of the opinion that the formulation

and granulation operations constitute an alteration within the

meaning of subheading 9802.00.50, HTSUS. The fact that the

product is referred to as \_\_\_\_\_\_\_\_ when exported and as
\_\_\_\_\_\_\_

when returned does not compel a finding of a new and different

article of commerce. As previously stated, different

formulations of the same product must be separately registered

with the EPA.

Moreover, on the basis of your submissions, we find that the

\_\_\_\_\_\_\_ in its exported condition is complete for its intended

use as an herbicide, and, in fact, can be marketed within the

agricultural industry in this condition. You have demonstrated

to our satisfaction that a market exists for \_\_\_\_\_\_\_ prior to

exportation. For example, as part of the registration statement

filed with EPA, directions for use of \_\_\_\_\_\_\_\_ is outlined.

We find that the operations performed in France do not

destroy the identity of the \_\_\_\_\_\_\_ because the chemical

composition has not been changed by the addition of certain inert

ingredients. The foreign operations do not appear to result in

any significant change in the quality or character of the

herbicide. The herbicide retains its weed killing properties.

The primary purpose of the operation is to render the herbicide

more \"user friendly\" by making it easier for the farmer to dilute

and measure the herbicide prior to its application.

We note that this case is distinguishable from the facts in

Headquarters Ruling Letter (HRL) 076499 of November 20, 1986,

because the herbicide in question in that case was converted

abroad by the addition of limestone which changed the product\'s

identity from an acidic substance to one with a pH suitable for

use on soil. The addition of limestone greatly affected the

acidity and alkalinity of the product, thereby changing the

chemical composition of the herbicide. The limestone acted as

more than an inert carrier or diluent for the herbicide. In the

present case, as discussed above, we find that no change in

chemical composition results from the processing performed

abroad.

HOLDING:

On the basis of the information submitted, we find that the

formulation and granulation processes constitute alterations

within the meaning of subheading 9802.00.50, HTSUS. Therefore,

the herbicide will be entitled to classification under this

tariff provision with duty only on the value of the foreign

processing upon compliance with the documentary requirements of

section 10.8, Customs Regulations (19 CFR 10.8).

Sincerely,

John Durant, Director

Commercial Rulings Division