HQ 223246: Manipulation of merchandise in a bonded warehouse; combining twoseparately functioning items; 19 U.S.C. 1562; 19 CFR 19.11.

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 223246

                          December 4, 1991


WAR-3-01-CO:R:C:E 223246  TLS

CATEGORY: Entry

Richard M. Belanger, Esq.
Powell, Goldstein, Frazier & Murphy
1001 Pennsylvania Avenue, N.W.
Washington, D.C.  20004

RE: Manipulation of merchandise in a bonded warehouse; combining two
separately functioning items; 19 U.S.C. 1562; 19 CFR 19.11.


Dear Mr. Belanger:

     We have received your request for a ruling on the above-
referenced matter.  The points raised in your submission have been
considered and our decision follows.

FACTS:

     Your client operates a bonded warehouse in which it conducts
various operations.  Among these operations is the attachment of
tone wheels to wheel hub units.  Tone wheels are toothed metal rings
that function as part of an automobile's antilock braking system. 
Wheel hub units consist of double row angular contact ball bearings
housed within flanged outer rings.  Each unit directly corresponds
with a conventional hub in that during assembly that are combined as
one integral part.  The wheel hub units are used to attach wheels to
an automobile's suspension system.  

     Apparently the wheel hub units can be operated without the tone
wheels but the reverse is not true.  This is true despite the fact
that they serve separate functions and do not operate together.  The
tone wheel cannot serve its function unless it is first attached to
the hub units, however.  You request a ruling on whether the
attachment procedure is considered a manipulation or a manufacture.

ISSUE:

     Whether the attachment of the tone wheel to the wheel hub unit
in a bonded warehouse is a manipulation permitted under 19 U.S.C.
1562 and 19 CFR 19.11 or a manufacture prohibited under those
provisions.



LAW AND ANALYSIS:

     The relevant statute, 19 U.S.C. 1562, provides in pertinent
part the following:

     ...upon permission  therefor being granted by the
     Secretary of the Treasury, and under customs supervision,
     at the expense of the proprietor, merchandise may be
     cleaned, sorted, repacked, or otherwise changed in
     condition, but not manufactured, in bonded warehouses
     established for that purpose... (emphasis added.)

The most prominent court ruling on the issue of manipulation versus
manufacture is Anheuser-Busch Brewing Assoc. v. United States, 207
U.S. 556 (1907).  The court held that in order for a process to be
viewed as a manufacture a new and different article must emerge,
having a different name, character, or use.  Id. at 562.  You cite
to this case to support the proposition that because a new and
different article having a different use did not emerge from the
process at hand, no manufacture can be said to have taken place in
the present case.

     It appears that the tone wheel cannot perform its function if
it is not integrated with the vehicle's braking system.  It further
appears that the tone wheel can only be integrated with the braking
system if it is attached to the wheel hub unit.  The functions of
the two parts evidently do not change after they are joined
together.  Somewhat analogous to this situation is when a headlight
is mounted onto a bicycle.  A cable is led from the light housing to
a connector that is integrated with the bicycle's front wheel
spokes.  The connector transfers power generated by the rotation of
the wheel to the housing, giving the light its power source.  In
such a scenario, it is clear that the headlight connector cannot be
said to become part of the front wheel unit and it hardly can be
argued that the connector functions as a part of the wheel's
operation.  Their functions remain separate and independent of each
other despite the fact they work in conjunction with each other.

     Such is the case here as well.  The wheel hub unit and tone
wheel work in conjunction with each other but perform entirely
separate and distinct functions.  The tone wheel does not become
part of the wheel hub system and does not assist the hub in its
operation.  The reverse is true as well.  It is evident that the
only purpose for joining these two parts together is one of
convenience.  Thus, we agree that a new and different article did
not emerge from the assemblage of the two items and that their
respective uses remained the same after assembly.  The names of the
two parts are the same as before the assembly, the intended uses are
the same, and the characters of the respective parts do not change. 
Therefore, the integration of the hub wheel and the tone wheel is a
manipulation, not a manufacture.



HOLDING:

     The attachment of the tone wheel to the wheel hub unit is a
manipulation, not a manufacture as the terms have been defined in
Customs law.  The assembly operation described above is permitted in
a bonded warehouse pursuant to 19 U.S.C. 1562 and 19 CFR 19.11.

                                 Sincerely,




                                 John Durant, Director