HQ 957375

April 19, 1995

CLA-2 R:C:M 957375 DWS

CATEGORY: Classification

TARIFF NO.: 8479.90.95; 9802.00.40

District Director

U.S. Customs Service

P.O. Box 619050

1205 Royal Lane

DFW Airport, TX 75261-0950

RE: Protest 5501-94-100136; Wax Pattern Dies; Aluminum Molds; Chapter
39, Note 1;

Explanatory Note 84.80; Section XVI,

Note 2; 8480.60.00; 8480.79.90; 7326.90.90; Repairs or Alterations; HQs
555359,

555707, 556738, 554952; 19 CFR 10.8

Dear District Director:

The following is our decision regarding Protest 5501-94-100136
concerning your action in

classifying and assessing duty on wax pattern dies under the Harmonized
Tariff Schedule of the

United States (HTSUS). Further information provided by counsel for the
protestant was taken

into consideration in rendering our decision on this protest.

FACTS:

The merchandise consists of wax pattern dies, which are aluminum molds
used for the

production of patterns made of wax. These patterns are used for the
casting of high specification

components principally for the aerospace industry. Hot wax, which is
made to proprietary

physical and chemical specifications, is poured into the mold which
forms the wax pattern. The

wax is composed of natural wax, petroleum wax, resin, and a filler. To
restore the molds to their

original condition, they were exported to England for repair by
reworking/ resharpening the

edges.

The wax pattern dies were entered under subheadings 8480.79.90, HTSUS,
as other molds of

plastics, and 9802.00.40, for the partial duty exemption on the value of
repairs or alterations to

the dies. The entry was liquidated on February 18, 1994, under
subheading 7326.90.90, as other

articles of iron or steel, and eligibility under subheading 9802.00.40,
HTSUS, was denied. The

protest was timely filed on May 11, 1994.

ISSUE:

Whether the wax pattern dies are classifiable under subheading
8480.79.90, HTSUS, as other

molds for plastics, under subheading 8480.60.00, HTSUS, as molds for
mineral materials, under

subheading 7326.90.90, HTSUS, as other articles of iron or steel, or
under subheading

8479.90.95, HTSUS, as parts of machines not specified elsewhere in
chapter 84, HTSUS.

Whether the wax pattern dies are eligible for the partial duty exemption
under subheading

9802.00.40, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

The subheadings under consideration are as follows:

8480.60.00: \[m\]olds for mineral materials.

The general, column one rate of duty for goods classifiable

under this provision is 3.9 percent ad valorem.

8480.79.90: \[m\]olds for rubber or plastics: \[o\]ther types:

\[o\]ther.

The general, column one rate of duty for goods classifiable

under this provision is 3.9 percent ad valorem.

7326.90.90: \[o\]ther articles of iron or steel: \[o\]ther:

\[o\]ther: \[o\]ther: \[o\]ther.

The general, column one rate of duty for goods classifiable

under this provision is 5.7 percent ad valorem.

8479.90.95: \[m\]achines and mechanical appliances having

individual functions, not specified or included

elsewhere in this chapter; parts thereof:

\[p\]arts: \[o\]ther.

The general, column one rate of duty for goods classifiable

under this provision is 3.7 percent ad valorem.

9802.00.40: \[a\]rticles returned to the United States after

having been exported to be advanced in value or

improved in condition by any process of

manufacture or other means: \[a\]rticles exported

for repairs or alterations: \[r\]epairs or

alterations made pursuant to a warranty.

The general, column one rate of duty for goods classifiable

under this provision is the duty upon the value of the

repairs or alterations.

CLASSIFICATION OF WAX PATTERN DIES

Classification of merchandise under the HTSUS is in accordance with the
General Rules of

Interpretation (GRI\'s).

GRI 1 provides that classification is determined according to the terms
of the headings and any

relative section or chapter notes.

First, as the dies are of aluminum, they are precluded from
classification under subheading

7326.90.90, HTSUS, as other articles of iron or steel.

Chapter 39, note 1, HTSUS, states that:

\[t\]hroughout the tariff schedule the expression \"plastics\"

means those materials of headings 3901 to 3914 which are or

have been capable, either at the moment of polymerization

or at some subsequent stage, of being formed under external

influence (usually heat and pressure, if necessary with a

solvent or plasticizer) by molding, casting, extruding,

rolling or other process into shapes which are retained on

the removal of the external influence.

To determine whether the dies are molds for plastics, we must determine
whether wax is a

plastic. Based upon chapter 39, note 1, HTSUS, wax is not a plastic as
it is not a material of

headings 3901 to 3914, HTSUS. Therefore, the subject dies, which pattern
wax, are not

classifiable under subheading 8480.79.90, HTSUS, as other molds for
plastics.

In understanding the language of the HTSUS, the Harmonized Commodity
Description and

Coding System Explanatory Notes may be utilized. The Explanatory Notes,
although not

dispositive or

legally binding, provide a commentary on the scope of each heading of
the HTSUS, and are

generally indicative of the proper interpretation of these headings. See
T.D. 89-80, 54 Fed. Reg.

35127, 35128 (August 23, 1989). In part, Explanatory Note 84.80

(pp. 1319 - 1321) states that:

\[t\]his heading covers the moulding boxes used in metal

foundry, mould bases and moulding patterns, with certain

exceptions referred to later, it also covers all moulds

(whether or not hinged, and whether used by hand or in

presses or moulding machines) which are of a kind used for

moulding the following materials into blanks or finished

articles:

\(I\) Metals . . .

\(II\) Glass . . . or mineral materials such as ceramic pastes,

cement, plaster or concrete.

\(III\) Rubber or plastics.

In general, the essential function of a mould is to retain

the material in a predetermined shape while it sets; some

moulds also exert a certain pressure on the material. . .

\(A\) - (E) xxx

\(F\) MOULDS FOR MINERAL MATERIALS

This group includes:

\(1\) Moulds for ceramic pastes . . .

\(2\) Moulds for moulding concrete, cement or asbestos-cement

goods . . .

\(3\) Moulds for agglomerating abrasives into grinding wheels.

\(4\) Moulds for plaster, staff or stucco articles . . .

\(G\) xxx

The heading also excludes:

\(a\) - (f) xxx

\(g\) Subject to the above exclusions, moulds used on presses

and other machines, for the moulding of materials other

than those cited in the text of this heading (classified

as parts of the machines for which they are designed).

It is our position that the dies are not molds for mineral materials, as
they are not similar to any

of the exemplars listed under Explanatory Note 84.80(F). None of the
exemplars mention wax or

a similar substance. Also, exclusion (g) to Explanatory Note 84.80
limits the class of molds

classifiable under heading 8480, HTSUS, to those which mold the
materials listed in the

exemplars under Explanatory Note 84.80. As wax is not one of those
materials listed, the subject

dies are precluded from classification under subheading 8480.60.00,
HTSUS, as molds for mineral

materials.

With regard to the machines to which the dies are part, we find that,
because they are not

described elsewhere under the HTSUS, they are classifiable under
subheading 8479.89.90,

HTSUS, which provides for: \"\[m\]achines . . . having individual
functions, not specified or

included elsewhere in this chapter; parts thereof: \[o\]ther machines .
. . : \[o\]ther: \[o\]ther.\"

Section XVI, note 2, HTSUS, states that:

\[s\]ubject to note 1 to this section, note 1 to chapter 84

and to note 1 to chapter 85, parts of machines (not being

parts of the articles of heading 8484, 8544, 8545, 8546 or

8547\) are to be classified according to the following

rules:

\(a\) Parts which are goods included in any of the headings

of chapters 84 and 85 (other than headings 8485 and

8548\) are in all cases to be classified in their

respective headings;

\(b\) Other parts, if suitable for use solely or principally

with a particular kind of machine, or with a number of

machines of the same heading (including a machine of

heading 8479 or 8543) are to be classified with the

machines of that kind. However, parts which are equally

suitable for use principally with the goods of headings

8517 and 8525 to 8528 are to be classified in heading

8517;

\(c\) All other parts are to be classified in heading 8485 or

8548\.

As subject dies are not goods included in any of the headings of
chapters 84 or 85, HTSUS,

section XVI, note 2(a), HTSUS, is inapplicable. However, under section
XVI, note 2(b),

HTSUS, as the dies are parts of machines of heading 8479, HTSUS, they
are to be classifiable

with those machines. Therefore, it is our position that the wax pattern
dies are classifiable under

subheading 8479.90.95, HTSUS, as parts of machines not specified
elsewhere in chapter 84,

HTSUS.

ELIGIBILITY UNDER SUBHEADING 9802.00.40, HTSUS

Subheading 9802.00.40, HTSUS, provides for the assessment of duty on the
value of

repairs or alterations performed pursuant to a warranty on articles
returned to the U.S. after

having been exported for that purpose. However, 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

CCPA 27, C.A.D. 631 (1956), aff\'d, C.D. 1752, 36 Cust.Ct. 46 (1956);
and 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. See, Dolliff & Company, Inc. v. United
States, 81 Cust.Ct. 1,

C.D. 4755, 455 F. Supp. 618 (1978), aff\'d, 66 CCPA 77, C.A.D. 1225, 599
F.2d 1015 (1979).

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 Headquarters Ruling Letter (HRL) 555359, dated May 14, 1990, drill
bits

manufactured in the U.S. which were rejected in-house by the
manufacturer after microscopic

inspection, were shipped to Mexico for reworking (resharpening) to bring
them into tolerance in a

precision grinding machine, and in order to attach a plastic depth gauge
ring (plastic collar) onto

the drill bit. We held that the foreign sharpening operations in HRL
555359 constituted a

continuation of the manufacturing process begun in the U.S. and was a
necessary step, performed

as a matter of course, in producing drill bits which meet industry
tolerance standards. In addition,

we held that the fact that the plastic collars were not assembled onto
the drill bits until after they

were resharpened also indicated that the drill bits were incomplete or
unfinished articles as

exported. Thus, we determined that the drill bits were not eligible for
the partial duty exemption

under subheading 9802.00.50, HTSUS.

In HRL 555707, dated February 20, 1991, we reconsidered the portion of
HRL 555359

pertaining to the reworking/resharpening of the drill bits in Mexico. In
HRL 555707, we affirmed

our earlier holding that the out-of-tolerance drill bits exported to
Mexico for reworking/

resharpening were not completed articles, and thus not eligible for the
partial duty exemption

under subheading 9802.00.50, HTSUS. We stated that the fact that drill
bits which meet industry

standards and those that do not are necessarily sold in different
commercial markets and at

different prices was another indication that they were recognized in the
trade as different articles

of commerce. Even without the addition of the plastic collars to the
drill bits in HRL 555359, we

found that the sharpening of the drill bits in Mexico exceeded a repair
or alteration within the

meaning of subheading 9802.00.50, HTSUS. Therefore, under these
circumstances, we affirmed

HRL 555359 on the basis that the foreign \"resharpening\" operation
constituted a continuation of

the manufacturing process begun in the U.S. and was a necessary step in
the production of the

drill bits.

However, the above-cited rulings were distinguished from the facts in
HRL 556738 dated

September 18, 1992, in which tools which had become dull from use were
shipped to Mexico for

resharpening. The tools in HRL 555359 and 555707 were found by Customs
to be incomplete

articles at the time of their exportation from the U.S., in part,
because the foreign \"resharpening\"

process was a necessary step in the initial manufacture of drill bits
which meet exacting industry

tolerance standards. In addition, the fact that in HRL 555359 and 555707
plastic collars had to

be attached to the drill bits after they were \"resharpened,\" so that
they could be used for their

intended purpose, also supported Customs\' conclusion that the bits were
unfinished when

exported. In HRL 556738, however, Customs found that resharpening the
tools in Mexico

constituted an acceptable repair or alteration within the meaning of
subheading 9802.00.50,

HTSUS. Customs stated that the tools were previously- manufactured
articles which had become

dull from repeated use. We further found that the tools were completed
articles when they were

exported to Mexico to undergo resharpening, and did not need the
addition of any other item in

order to function properly. Moreover, we found that the foreign process
did not have the effect

of creating a new or different article of commerce; the resharpening
operation merely rendered

used tools sharp again, and did not change the character or use of the
article.

In another case, HRL 554952 dated March 14, 1989, involving casting
molds, we held

that the foreign explosive reforming operation constituted an acceptable
repair within the meaning

of item 806.20, Tariff Schedules of the United States (TSUS) (the
precursor to subheading

9802.00.40 and 9802.00.50, HTSUS). In HRL 554952, the foreign repair
operation consisted of

a unique reforming process which returned out-of-dimension continuous
casting molds to their

original precise dimensions. During the repair operation, plastic
explosive was wrapped around

the casting, a mandrel of the required shape and accuracy was inserted
into the used mold, the

unit was immersed in a tank of water, and the explosive was detonated.
In finding that the foreign

explosive reforming operation constituted an acceptable repair operation
for purposes of item

806.20, TSUS, we stated that this operation merely restored the exported
used casting molds to

their original condition.

We are of the opinion that in the instant case, the repair operations
performed to the wax

pattern dies in England are similar to those operations performed to the
used tools in HRL

556738 and to the casting molds in HRL 554952. As in HRLs 556738 and
554952, the wax

pattern dies are previously manufactured articles which have become worn
out from repeated use.

The dies are completed articles in their condition as exported to
England prior to undergoing

resharpening, and they do not require the addition of any other
component or attachment in order

to function properly. Moreover, the foreign resharpening operation does
not create a new or

commercially different article, nor does it change the character or use
of the wax pattern die.

Accordingly, we find that the resharpening operations performed in
England constitute acceptable

repair operations within the meaning of subheading 9802.00.40, HTSUS.

At the time the merchandise subject to this protest was entered, section
10.8, Customs

Regulations (19 CFR 10.8), provided that there shall be filed, prior to
exportation of the article to

be repaired or altered, a Certificate of Registration (Customs Form
4455), and, at the time of

entry, a declaration from the person who performed the repairs or
alteration as well as a

declaration from the owner or importer. The record includes a
Certificate of Registration (4455)

for the merchandise in this case which reflects that it was presented to
Customs (on July 24,

1992\) prior to the exportation of the merchandise from the U.S., and
indicates that the articles

were exported for repairs or alterations. Moreover, the record includes
the Foreign Shipper\'s

Repair Declaration for the subject merchandise dated August 24, 1992,
which shows that the

merchandise was received by the foreign repair facility on July 27,
1992, and that various repair

operations were performed. Therefore, it appears that protestant has
complied with the

documentary requirements of 19 CFR 10.8.

HOLDING:

The wax pattern dies are classifiable under subheading 8479.90.95,
HTSUS, as parts of

machines not specified elsewhere in chapter 84, HTSUS. With regard to
this issue, because

reclassification of the merchandise as indicated above will result in a
lower rate of duty than

claimed, you are instructed to GRANT the protest.

On the basis of the described foreign operations, the resharpening
operations performed in

England on the exported wax pattern dies constitute an acceptable
\"repair\" or \"alteration,\" within

the meaning of subheading 9802.00.40, HTSUS. Therefore, the dies are
entitled to the partial

duty exemption available under this tariff provision. With regard to
this issue, you should

GRANT the protest.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065,
dated August

4, 1993, Subject: Revised Protest Directive, this decision, together
with the Customs Form

19, should be mailed by your office to the protestant no later than 60
days from the date of

this letter. Any reliquidation of the entry in accordance with the
decision must be

accomplished prior to mailing of the decision. Sixty days from the date
of the decision the

Office of Regulations and Rulings will take steps to make the decision
available to Customs

personnel via the Customs Rulings Module in ACS and the public via the
Diskette

Subscription Service, Freedom of Information Act, and other public
access channels.

Sincerely,

John Durant, Director

Commercial Rulings Division