HQ 554920: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to certain vertical blinds to be imported from Canada.

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 554920

                                   January 3, 1989

          CLA-2 CO:R:C:V 554920 GRV

          CATEGORY:  CLASSIFICATION

          TARIFF NO.:  9802.00.80; 807.00

          Mr. R. B. McKenny
          C. S. Emery & Company, Inc.
          P.O. Box 307
          Derby Line, Vermont  05830

          RE:  Applicability of partial duty exemption under HTSUS subhead-
               ing 9802.00.80 to certain vertical blinds to be imported
               from Canada.

          Dear Mr. McKenny:

                This is in response to your letter of February 11, 1988, on
          behalf of Frontenac Fabrics, Inc., requesting a ruling on the ap-
          plicability of subheading 9802.00.80, Harmonized Tariff Schedule
          of the United States (HTSUS) (formerly item 807.00, Tariff Sched-
          ules of the United States (TSUS)), to certain vertical blinds to
          be imported from Canada.  Samples of both the fabric rolls to be
          exported and the vertical blinds to be imported were submitted
          for examination.

          FACTS:

                You state that rolls of fabric of U.S. origin, measuring
          three and half inches wide by approximately 100 yards, will be
          exported to Canada for assembly operations consisting of:

                (1) cutting the rolled fabric to length;
                (2) punching a one-half inch hole near one end of the
                    fabric for receipt of a removable plastic hanger
                    insert;
                (3) folding the punched end over and sewing a one inch
                    hem in it to receive the removable plastic hanger
                    insert; and
                (4) folding the opposite end over and sewing a two and
                    a half inch hem in it, the resultant pocket either
                    containing an inserted metal weight or not.

          The completed articles--vertical blinds--will then be returned to
          the U.S.

          ISSUE:

                Whether the foreign operation constitutes an "assembly,"
          thereby entitling the vertical blinds to the partial duty










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          exemption under HTSUS subheading 9802.00.80 (item 807.00, TSUS)
          when returned to the U.S.

          LAW & ANALYSIS:

                As you are probably aware, on January 1, 1989, the Harmo-
          nized Tariff Schedule of the United States (HTSUS) superseded and
          replaced the Tariff Schedules of the United States (TSUS).  TSUS
          item 807.00 was carried over into the HTSUS without change as
          subheading 9802.00.80.  This tariff provision provides a partial
          duty exemption for articles:

                ... 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 with-
                out further fabrication, (b) have not lost their physi-
                cal 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 assem-
                bled and except by operations incidental to the assembly
                process such as cleaning, lubricating, and painting.

          Under this tariff provision, there is a duty upon the full value
          of the imported assembled article less the cost or value of such
          U.S. components, provided the documentation requirements of sec-
          tion 10.24, Customs Regulations (19 CFR 10.24), are satisfied.

                Of importance to the sample fabric material submitted is
          the term "assembled."  Section 10.16(a), Customs Regulations (19
          CFR 10.16(a)), provides that:

                The assembly operations performed abroad may consist
                of any method used to join or fit together solid com-
                ponents, such as welding, soldering, riveting, force
                fitting, gluing, laminating, sewing, or the use of
                fasteners....

                Court decisions construing the term "assembly" have uni-
          formly held that the term "assembly," for purposes of TSUS item
          807.00, involves the joining or coming together of solids.  See,
          for example, United States v. Baylis Brothers Co., 59 CCPA 9,
          C.A.D. 1026, 451 F.2d 643 (1971).  Implicit in this construction
          of the term "assembly" is that multiple solid components are
          joined together in a manner that permanently fixes their
          respective positions.

                One of the problems presented in the instant case is that
          the process of sewing a one-inch hem to the end of the cut fabric
          containing the punched hole results in merely joining the fabric
          to itself.  We have previously ruled that the joining of fabric
          to itself rather than to another component is not an acceptable










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          assembly operation or an operation incidental to assembly for
          purposes of TSUS item 807.00.  See Headquarters Ruling Letter
          554959 (August 29, 1988).  Punching the one-half inch hole in the
          fabric also clearly is not an operation which is incidental to
          assembly under the circumstances of this case.  The operations of
          punching the hole in the fabric and sewing the one-inch hem
          advance the value and improve the condition of the fabric by
          means other than assembly and demonstrate that the fabric was not
          in condition ready for assembly with other components at the time
          of exportation.  As a result, no allowance in duty may be made
          for the value of the fabric under HTSUS subheading 9802.00.80
          upon importation of the vertical blinds.

                Moreover, because the plastic hanger to be inserted into
          the end of the fabric with the one-inch hem is not permanently
          fixed by an assembly process, but is removable, no allowance may
          be made for the value of the plastic hanger under this tariff
          provision.  However, the process of enclosing a metal weight in
          the two and a half inch hem on the other end of the fabric strip
          constitutes an acceptable assembly operation since the weight
          will be permanently joined to the fabric by the sewing operation.
          Therefore, with respect to those vertical blinds which will have
          metal weights inserted therein, allowances in duty may be made
          for the value of the weights under HTSUS subheading 9802.00.80,
          provided the weights are of U.S. origin.

          CONCLUSION:

                On the basis of the information and samples submitted, no
          exemption from duty may be given under HTSUS subheading
          9802.00.80 for the value of the U.S. fabric to be exported or for
          the value of the plastic hangers.  However, in regard to those
          vertical blinds to be imported containing metal weights,
          allowances in duty may be made under this tariff provision for
          the cost or value of the weights if they are of U.S. origin and
          the documentation requirements set forth in 19 CFR 10.24 are
          satisfied.

                                        Sincerely,






                                        John Durant, Director
                                        Commercial Rulings Division













          CO:R:C:V:VILDERS:GRV:10/21/88:12/16/88