April 2018 — Question 48
A shipment of Evaporative Air Coolers with a documented U.S. value of $100,000 was exported to Taiwan for $2000 in repairs, and then reimported into the U.S. Which of the following value(s) and classification(s) apply to the Evaporative Air Coolers?
- A$98,000 under 9802.00.5060
- B$102,000 under 8479.60.0000
- C$100,000 under 8479.60.0000 and $2000 under 9802.00.5060
- D$100,000 under 9802.00.5060 and $2000 under 8479.60.0000✓ CBP's answer
- E$102,000 under 9802.00.5060
Why this answer
Subheading 9802.00.50 covers U.S. articles returned after repairs or alterations abroad, with duty assessed only on the value of the repairs at the rate applicable to the article's ordinary classification. Under the Chapter 98 notes and the reporting convention tested, the entry shows the returned coolers' $100,000 value under 9802.00.5060 as the duty-exempt portion, and the $2,000 repair cost as the dutiable value reported under the coolers' regular Chapter 84 number, 8479.60.0000. Option C tempts by pairing the values the opposite way, but that would make the full $100,000 dutiable under the regular provision and exempt only the repair cost, inverting the provision. Watch for: Reversing the pairing so the $100,000 article value, not the $2,000 repair cost, is reported as dutiable.
Original CBLE Simulator explanation — the question and key above are CBP's; this analysis is ours. Verify against the current edition before relying on it in practice.
CBP's cited authority
Answer and citations as published in CBP's official answer key for the April 2018 examination.
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