HQ 555387: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.50 to various heat shrink tubings from Mexico. Dolliff & Company, Inc. (1979);071475;554736;

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 555387

                       September 11, 1989

CLA-2 CO:R:C:V 555387 GRV

CATEGORY:  CLASSIFICATION

TARIFF NO.:  9802.00.50

Mr. C. Gustavo Farell
President
Cesar-Scott, Inc.
7701 Ewald Terrace
Minneapolis, Minnesota  55426

RE:  Applicability of partial duty exemption under HTSUS subhead-
     ing 9802.00.50 to various heat shrink tubings from Mexico.
     Dolliff & Company, Inc. (1979);071475;554736;

Dear Mr. Farell:

     This is in response to your letter of May 2, 1989,
requesting a ruling on the applicability of subheading
9802.00.50, Harmonized Tariff Schedule of the United States
(HTSUS), to various heat shrink tubings to be imported from
Mexico.  Samples of the article to be exported for processing and
the article to be returned to the U.S. were submitted for
examination.

FACTS:

     You state that various heat shrinkable types of tubing will
be purchased on spools from U.S. distributors and exported to
Mexico for manufacture into two types of electrical insulators.
In Mexico, some of the tubing will be cut to length--typically
one inch--and marked for use as identification labels for wires
in the building of cable/harness/chassis assemblies.  Other
tubings will merely be cut to length--from 0.5 to 10 inches.
These tubings will serve as an insulator over the ends of crimped
contacts or any other conductive terminations.  The two products
will then be returned to the U.S. for sale.

ISSUE:

     Whether the various heat shrink tubings qualify for the
partial duty exemption under HTSUS subheading 9802.00.50 when
returned to the U.S.

LAW AND ANALYSIS:

     Articles returned to the U.S. after having been exported to
be advanced in value or improved in condition by repairs or
alterations may qualify for the partial duty exemption under
HTSUS subheading 9802.00.50 provided the foreign operation does
not destroy the identity of the exported articles or create new
or different articles.  Further, entitlement to this tariff
treatment is 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 CCPA 77, C.A.D.
1225, 599 F.2d 1015, 1019 (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.

     It is clear from the information you have provided that the
tubing exported on spools is not a completed product suitable for
its intended use as wire identification labels or as insulators
prior to the foreign processing.  We have previously stated that
where rolls of material are exported and finished goods are
returned after cutting the material to length, the cutting
operation constitutes a finishing step in the manufacture of the
goods to be returned.  Headquarters Ruling Letter (HRL) 071475
(September 20, 1983).  See also, HRL 554736 (February 16, 1988).
Thus, although the cutting and marking operations advance the
heat shrink tubing in value by improving its marketable
condition, the exported articles are not finished or completed
products when exported and cannot qualify for the duty exemption
available under HTSUS subheading 9802.00.50 when returned.

HOLDING:

     On the basis of the information and samples presented, it is
our opinion that the foreign operations comprise further
processing steps which are performed on unfinished goods and
which lead to completed articles.  Accordingly, the various heat
shrink tubings are not eligible for the partial duty exemption
available under HTSUS subheading 9802.00.50 when returned to the
U.S.


                              Sincerely,





                              John Durant, Director
                              Commercial Rulings Division