HQ 224148: Manufacture, What Is; Manufacturing Drawback; Reconditioning of Antimony Pentachloride; 19 U.S.C. 1313(a) and (b)

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 224148

                        December 7, 1992

DRA-2-01-CO:R:C:E 224148 PH

CATEGORY:  Drawback

Mr. Jerry K. Lamb
Drawback Manager
Panalpina Inc.
Post Office Box 60164 AMF
Houston, Texas 77205

RE:  Manufacture, What Is; Manufacturing Drawback; Reconditioning
     of Antimony Pentachloride; 19 U.S.C. 1313(a) and (b)

Dear Mr. Lamb:

     In your letter of August 20, 1992, you request a ruling on
whether a process your client in this matter uses with antimony
pentachloride is a manufacture for purposes of the manufacturing
drawback law (19 U.S.C. 1313(a) and (b)).  Due to confidentiality
concerns, the FACTS portion of this ruling is abbreviated, as
agreed in the letter from your client which you forwarded with
your November 23, 1992, letter, and as agreed between Mr. Jack
Reese of your client and Mr. Paul Hegland of my staff.  Our
ruling follows.

FACTS:

     In the enclosure you provided with your request and in the
enclosure provided with your November 23, 1992, letter and the
telephone conversation referred to above, your client's operation
is described as follows:

        Spent antimony pentachloride catalyst is
        reprocessed into fresh antimony pentachloride
        catalyst of over 99 percent purity in a multi-
        step operation involving reaction with antimony
        metal (producing antimony trichloride),
        distillation of intermediate products followed by
        crystallization (both distillation and
        crystallization purify the antimony trichloride),
        and chlorination (to produce the antimony
        pentachloride).

     The above description is generally consistent with the
"textbook" descriptions of the production of antimony
pentachloride (see Kirk-Othmer, Encyclopedia of Chemical
Technology (4th Ed. 1992) vol 3, p. 391, "Antimony pentachloride
is usually prepared by chlorination of molten SbCl3"; see also
Ullmann's Encyclopedia of Industrial Chemistry (5th Ed. 1985),
vol. A3, p. 68, "[Antimony pentachloride] can be produced by
saturating molten antimony trichloride with chlorine, followed by
vacuum distillation").  (A copy of the Kirk-Othmer definition is
enclosed to be forwarded to your client in this matter, per the
request of your client's representative in his discussion with my
staff.)

     Antimony pentachloride is described in the above-cited texts
as "a colorless, hygroscopic, oily liquid that is frequently
yellow because of the pressure of dissolved chlorine [which is] a
useful chlorine carrier" (Kirk-Othmer, supra) or "a pale yellow
fuming liquid of unpleasant odor [which] acts as a chlorine donor
in the chlorination of organic compounds [and] is also used as a
polymerization catalyst" (Ullmann's, supra).  Antimony
trichloride is described as "a colorless, crystalline solid,
readily soluble in hydrochloric acid [which is] used as a
catalyst or as a component or catalysts to effect polymerization
[and for other uses]" (Kirk-Othmer, supra, at pp. 387-389) or as
being "soft, crystalline, colorless, and very hygroscopic"
(Ullmann's, supra).

ISSUE:

     Is the process described in the FACTS portion of this ruling
a manufacture or production for purposes of the manufacturing
provisions of the drawback law (19 U.S.C. 1313(a) and (b))?

LAW AND ANALYSIS:

     Under section 19 U.S.C. 1313(a), drawback is authorized
"[u]pon the exportation of articles manufactured or produced in
the United States with the use of imported merchandise", upon
compliance with the provisions in 19 U.S.C. 1313 and the Customs
Regulations issued thereunder (19 CFR Part 191).  Under 19 U.S.C.
1313(b), "[i]f imported duty-paid merchandise and duty-free or
domestic merchandise of the same kind and quality are used in the
manufacture or production of articles within a period not to
exceed three years from the receipt of such imported merchandise
by the manufacturer or producer of such article, there shall be
allowed upon the exportation of any such articles [drawback]." 
Drawback under this provision is also conditioned upon compliance
with the provisions in 19 U.S.C. 1313 and the Customs Regulations
issued thereunder.

     Generally, in determining whether there has been a
manufacture or production for drawback purposes, Customs has long
used the criteria in the case of Anheuser-Busch v. United States,
207 U.S. 556 (1908).  Under that case, a manufacture or
production is considered to have occurred when the merchandise
under consideration is changed or transformed into a new and
different article having a distinctive character or use.  Since
then, in the case of United States v. International Paint Co., 35
CCPA 87, C.A.D. 376 (1948), it has been held that the fact that
an exported product does not have a distinctive name different
from that of the imported product does not preclude there being a
manufacture or production for drawback purposes.

     In this latter case, the Court found that the process of
eliminating mineral acids and metallic salts and adding varnish
to a paint substance created a new use for a substance that was
known as "paint" before and after the process.  The process
consisted of pouring out those impurities which naturally
separated to the top of the paint, mechanically stirring the
remainder to cause a further separation and pouring out those
impurities, and then adding varnish to the impurity-free residue
to increase viscosity.  The critical point for the Court appears
to have been the recognition that the paint in its imported
condition could not be used to protect steel hulls, but that it
could be so used after the processing (see discussion of this
case in Customs Service Decision (C.S.D.) 81-235).

     The operations in the case under consideration are at least
as much of a "manufacture or production" as those in the
International Paint Co. case.  Here, the imported merchandise
would be antimony pentachloride and the article to be exported
would also be antimony pentachloride.  The imported merchandise
would be transformed into a different chemical (antimony
trichloride which, according to the definitions of both chemicals
referred to in the FACTS portion of this ruling, has
substantially different characteristics than the antimony
pentachloride) which would be purified by distillation and
crystallization before being chlorinated to obtain antimony
pentachloride.  According to the description in the facts, the
imported antimony pentachloride would be spent as a catalyst and
the antimony pentachloride which had undergone the described
process would be a fresh antimony pentachloride catalyst.  On the
basis of the International Paint Co. case (see also, our ruling
of June 3, 1966 (File:  DB 731.1 H), holding that the removal of
impurities from imported effluent ethylene glycol by means of
distillation and filtration to result in ethylene glycol,
antifreeze grade, is a manufacture or production for drawback
purposes), we conclude that the process described above and in
the FACTS portion of this ruling is a "manufacture or production"
for purposes of the drawback law, provided, that the spent
antimony pentachloride catalyst could not be used as a catalyst
and the fresh antimony pentachloride catalyst could be so used.

     Please be aware that this ruling addresses only the issue of
whether the process described is a manufacture or production for
drawback purposes.  Depending on other factors involved in this
operation, the process may or may not result in qualification for
drawback.  For example, the importation of fresh catalyst, use of
that catalyst in United States, production of fresh catalyst from
the resulting spent catalyst by the described process, and the
exportation of the fresh catalyst so produced would not result in
drawback on the importation and exportation of the fresh catalyst
under 19 U.S.C. 1313(j) (same condition drawback), nor would it
result in drawback under 19 U.S.C. 1313(a) or (b) (manufacturing
drawback).  This is so with regard to same condition drawback
because one of the requirements of that law is that the imported
merchandise or substituted imported or domestic merchandise may
not be used in the United States before exportation).  This is so
with regard to manufacturing drawback because, as distinguished
from the case in which spent catalyst is imported and processed
into fresh catalyst, the merchandise in its imported form (i.e.,
as fresh catalyst) could be used for the same purpose and in the
same way as the exported merchandise (see discussion of the
"critical point" in the International Paint Co. case).

HOLDING:

     The process described in the FACTS portion of this ruling is
a manufacture or production for purposes of the manufacturing
provisions of the drawback law (19 U.S.C. 1313(a) and (b)),
provided, that the spent antimony pentachloride catalyst could
not be used as a catalyst and the fresh antimony pentachloride
catalyst could be so used.  (See United States v. International
Paint Co., 35 CCPA 87, C.A.D. 376 (1948).)

                            Sincerely,




                            William G. Rosoff
                            Chief
                            Entry Rulings Branch