HQ 554917: Applicability of partial duty exemption of item 806.20, TSUS, to certain greige goods exported to Italy for printing

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 554917

                                    June 20, 1988

          CLA-2  CO:R:C:V  554917DBI

          CATEGORY:  Classification

          TARIFF NO.: 9802.00.40; 806.20

          Mr. Harry Galtieri
          Anju/Woodridge, Inc.
          295 Fifth Avenue
          New York, New York  10016

          RE:   Applicability of partial duty exemption of item 806.20,
                TSUS, to certain greige goods exported to Italy for
                printing

          Dear Mr. Galteiri:

                This is in response to your letter of February 12, 1988, in
          which you request a ruling concerning the dutiability of certain
          U.S. greige goods exported to Italy for printing.

          FACTS:

                You state that U.S. greige goods will be sent to Italy for
          printing.  In your telephone conversation on May 26, 1988, with a
          member of my staff, you indicated that a design will be printed
          on the greige goods which will be used for home furnishings such
          as drapery, bedspreads and upholstery for furniture.  The goods
          will then be returned to the U.S. for further manufacture into
          home furnishings.  Inasmuch as you ask whether the printing
          process constitutes a loss of identity of American goods, we
          assume that you are referring to the applicability of item
          806.20, Tariff Schedules of the United States (TSUS), to the
          greige goods.

          ISSUE:

                Whether the described greige goods, when returned to the
          U.S., will be eligible for the partial exemption from duty
          provided for in item 806.20, TSUS (9802.00.40, Harmonized Tariff
          Schedule of the United States (HTSUSA)).

          LAW AND ANALYSIS:

                Item 806.20, TSUS, provides for the assessment of duty on
          the value of repairs or alterations performed on articles
          returned to the U.S. after having been exported to be advanced in













                                        - 2 -

          value or improved in condition by any process of manufacture or
          other means.  However, the application of this tariff provision
          is precluded where the foreign processing operation is a
          necessary step in the preparation or manufacture of finished
          articles.  Dolliff and Company, Inc. v. United States, 66 CCPA
          77, CAD 1225, 599 F.2d 1015 (1979).

                We have previously held in a ruling dated February 13, 1987
          (HQ 554441) that the printing of U.S. laces and fabrics in Italy
          was a continuation of the total goods-in-process manufacture and
          that the goods were not considered finished until printed.
          Therefore, the printing exceeded the meaning of the term
          alteration and precluded the application of item 806.20, TSUS.

                We believe that the foreign printing process constitutes an
          operation that exceeds an alteration based on our previous
          ruling.  The greige goods require a further step in the
          preparation of the finished product.

          HOLDING:

                On the basis of the information submitted, it is our
          opinion that the foreign printing process may not be considered
          an alteration as that term is used in item 806.20, TSUS, and,
          therefore, precludes tariff treatment of the returned goods under
          the provision of item 806.20, TSUS.

                                     Sincerely,




                                     John Durant, Director
                                     Commercial Rulings Division




























          1cc: CLA-2 CO:R:C:V:DIZZO:SDZ:5/3/88