HQ 555606: Internal Advice Request No. 3/90; applicability of subheading 9802.00.80, HTSUS, to nonwoven disposable shoe covers formed by sewing operations; Assembly; incidental operations; L'Eggs; Applicability of subheading 9801.00.10, HTSUS, to U.S. origin packaging materials; 731806; 071449

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 555606

                                    July 26, 1990

          CLA-2  CO:R:C:V  555606 LS

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.80; 9801.00.10

          District Director of Customs
          Lincoln Juarez Bridge, Bldg. #2
          P.O. Box 3130
          Laredo, Texas 78044-3130

          RE:   Internal Advice Request No. 3/90; applicability of
                subheading 9802.00.80, HTSUS, to nonwoven disposable shoe
                covers formed by sewing operations; Assembly; incidental
                operations; L'Eggs; Applicability of subheading 9801.00.10,
                HTSUS, to U.S. origin packaging materials; 731806; 071449

          Dear Sir:

                This is in response to your memorandum of January 11, 1990,
          forwarding a request for internal advice dated September 18,
          1989, from John Mayo McKeown, on behalf of Medline Industries.
          The request relates to the applicability of subheading
          9802.00.80, Harmonized Tariff Schedule of the United States
          (HTSUS), to nonwoven disposable shoe covers imported from Mexico.
          Samples were submitted for examination.

          FACTS:

                The following facts are elicited from Medline Industries'
          request for internal advice, and an inspection of the samples.
          Medline Industries is planning to send the following U.S. origin
          components to Mexico for assembly into nonwoven disposable shoe
          covers:  precut sheets of 100 percent spun bonded polypropylene;
          rolls of elastic white band; rolls of white cotton thread;
          chipboard boxes; and master cartons.  The elastic white band and
          cotton thread are cut to length in Mexico.  The elastic band is
          then placed along the edge of the precut sheet of polypropylene
          and sewn by machine onto the sheet using the thread.  Medline
          Industries has not indicated how many sewing steps take place and
          how many separate pieces of elastic band are used on each shoe
          cover.  It appears that one piece of elastic band is sewn onto
          the upper portion of the sheet which becomes the opening of the
          shoe cover.  It appears that the sheet is then folded in half,
          and another piece of band is sewn along the edge of the folded
          sheet to create the sole area, toe portion, and top of the shoe
          cover.  Thus, at the same time that the elastic band is being
          joined by thread to the polypropylene sheet, the sheet is being











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          sewn to itself to create the shape of the shoe cover.  Fifty
          pairs of completed shoe covers are then placed in each chipboard
          box and the bottom of the boxes are stamped with non-sterile lot
          numbers.  Three chipboard boxes are packed in a master carton and
          the carton is sealed with a dust cover.  The master cartons are
          then stamped with non-sterile lot numbers.

                In an amendment to its request for internal advice, dated
          October 30, 1989, Medline Industries contends that the operation
          whereby the polypropylene sheet is sewn to itself constitutes an
          assembly in accordance with L'Eggs Products, Inc. v. United
          States, Slip Op. 89-5, 13 CIT ___, 704 F. Supp. 1127 (1989).
          Medline Industries states that the Customs Service has appealed
          this decision, and inquires as to the effect of this appeal on
          its proposed operations in Mexico.

                The office of the Area Director of Customs, New York
          Seaport, advises in regard to this internal advice request that
          L'Eggs has not been appealed, and that the disposable shoe covers
          should be eligible for the partial duty exemption under
          subheading 9802.00.80, HTSUS, when imported into the U.S.

          ISSUE:

                Whether the nonwoven disposable shoe covers will qualify
          for the partial duty exemption under subheading 9802.00.80,
          HTSUS, when imported into the U.S.

          LAW AND ANALYSIS:

                Subheading 9802.00.80, HTSUS, provides a partial duty
          exemption for:

                [a]rticles assembled abroad in whole or in part of
                fabricated components, the product of the United States,
                which (a) were exported in condition ready for assembly
                without further fabrication, (b) have not lost their
                physical identity in such articles by change in form, shape
                or otherwise, and (c) have not been advanced in value or
                improved in condition abroad except by being assembled and
                except by operations incidental to the assembly process
                such as cleaning, lubricating and painting.

          All three requirements of subheading 9802.00.80, HTSUS, must be
          satisfied before a component may receive a duty allowance.  An
          article entered under subheading 9802.00.80, HTSUS, is subject to
          duty upon the full value of the imported assembled article less
          the cost or value of the U.S. components, upon compliance with
          the documentary requirements of section 10.24, Customs
          Regulations (19 CFR 10.24).












                                        - 3 -

                Operations incidental to the assembly process are not
          considered further fabrication operations, as they are of a minor
          nature and cannot always be provided for in advance of the
          assembly operation.  See section 10.16(a), Customs Regulations
          (19 CFR 10.16(a)).  Examples of operations considered incidental
          to the assembly process are delineated at 19 CFR 10.16(b).
          However, any significant process, operation, or treatment whose
          primary purpose is the fabrication, completion, or physical or
          chemical improvement of a component precludes the application of
          the exemption under subheading 9802.00.80, HTSUS.  See 19 CFR
          10.16(c).

                According to 19 CFR 10.16(a), assembly operations may
          consist of any method used to join or fit together solid
          components.  Sewing is specifically enumerated in this regulation
          as an acceptable means of assembly.  Thus, the operation of
          sewing the elastic band to the polypropylene sheet by means of
          thread constitutes an assembly.  The fact that, in one of the
          sewing operations, the precut sheet is being sewn to itself at
          the same time that the elastic band is being joined to the sheet
          does not preclude the finding of an acceptable assembly, in view
          of the decision in L'Eggs.  L'Eggs held that the joining of
          fabric to itself by sewing is an acceptable assembly operation
          for purposes of item 807.00, Tariff Schedules of the United
          States (precursor of subheading 9802.00.80, HTSUS).

                Pursuant to 19 CFR 10.16(a), assembly operations may be
          preceded, accompanied, or followed by operations incidental to
          the assembly.  The cutting of the elastic band and cotton thread
          to length in Mexico prior to the sewing operations is an
          acceptable incidental operation.  See 19 CFR 10.16(b)(6).

                We find that the U.S. fabricated components, consisting of
          the precut sheets of spun bonded polypropylene, the rolls of
          elastic white band, and the rolls of white cotton thread are in a
          condition ready for assembly without further fabrication, do not
          lose their physical identities in the assembly operations, and
          are not otherwise advanced in value or improved in condition
          except by assembly operations and operations incidental thereto.
          Therefore, the nonwoven disposable shoe covers are eligible for
          the duty allowance under subheading 9802.00.80, HTSUS.

                Subheading 9801.00.10, HTSUS, provides for the free entry
          of products of the U.S. that are exported and returned without
          having been advanced in value or improved in condition by any
          process of manufacture or other means while abroad, provided the
          documentary requirements of section 10.1, Customs Regulations (19
          CFR 10.1), are met.  The packaging materials used in shipping the














                                        - 4 -

          shoe covers are entitled to free entry under subheading
          9801.00.10, HTSUS, since they are U.S. products which are
          returned without having been advanced in value or improved in
          condition while abroad.  See Headquarters Ruling Letter (HRL)
          731806 dated November 18, 1988 (duty-free treatment provided by
          subheading 9801.00.10, HTSUS, extends to an American-made
          container which is exported and then reimported with its
          contents, provided that it meets all of the criteria for
          classification within that subheading).  Moreover, the stamping
          of the non-sterile lot numbers onto the chipboard boxes and the
          master cartons will not preclude this packaging material from
          receiving duty-free treatment under subheading 9801.00.10, HTSUS.
          See HRL 071449 dated October 17, 1983.

          HOLDING:

                For the foregoing reasons, the nonwoven disposable shoe
          covers will be eligible for the partial duty exemption under
          subheading 9802.00.80, HTSUS, when imported into the U.S., upon
          compliance with the documentary requirements of 19 CFR 10.24.
          The packaging material of U.S. origin is entitled to free entry
          under subheading 9801.00.10, HTSUS, upon compliance with the
          documentary requirements of 19 CFR 10.1.

                                              Sincerely,



                                              John Durant, Director
                                              Commercial Rulings Division