HQ 554945: Applicability of partial duty exemption to certain fabric subjected to a crushing operation abroad

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 554945

                                    June 14, 1988


          CLA-2 CO:R:C:V  554945 CW

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.40, HTSUSA (806.20, TSUS)

          Mr. Leslie A. Regenbogen
          Darlington Fabrics Corporation
          1359 Broadway
          New York, New York 10018

          RE:  Applicability of partial duty exemption to certain fabric
               subjected to a crushing operation abroad

          Dear Mr. Regenbogen:

               This is in response to your letter of February 11, 1988, in
          which you request a ruling concerning the applicability of item
          806.20, Tariff Schedules of the United States (TSUS), to certain
          fabric to be imported from France.  Samples have been submitted
          for examination.

          FACTS:

               You advise that your company, a manufacturer of warp knitted
          elastic fabrics, is considering exporting fabric to France where
          it will be subjected to a processing operation designed to impart
          a permanent "crushed" or wrinkled look to the fabric.  The fabric
          will then be imported into the U.S. and sold to U.S. garment
          producers for manufacture into swimsuits.

          ISSUE:

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

          LAW AND ANALYSIS:

               Item 806.20, TSUS, provides for the assessment of duty on
          the value of repairs or alterations performed on articles that
          are sent abroad for that purpose.  However, the application of
          this tariff provision is precluded where the operations performed
          abroad destroy the identity of the articles or create new or














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          or different commercial articles.  Item 806.20, TSUS, treatment
          also is precluded where the exported articles are incomplete for
          their intended use and the foreign processing operations are
          necessary to the preparation or manufacture of finished articles.
          See LeGran Manufacturing Co. v. United States, 59 Cust. Ct. 58,
          C.D. 3070 (1967), and Dolliff & Company, Inc. v. United States,
          66 CCPA 77, C.A.D. 1225 (1979).

               In Royal Bead Novelty Co. v. United States, 68 Cust. Ct.
          154, C.D. 4353 (1972), it was held that glass beads which were
          exported for the application of a half coating of "Aurora
          Borealis" to impart a luster effect were entitled to item 806.20,
          TSUS, treatment.  The Court stated that "the identity of the
          articles in question was not lost or destroyed by the coating
          process and no new articles were created; beads went out and
          beads came back."  The Court further stated that the application
          of the coating did not change the "quality, texture, or
          character" of the beads.

               It is clear in this case that the fabric in its exported
          condition is complete for its intended use as material for
          swimsuits.  Moreover, as was the case with respect to the beads
          in Royal Bead, the identity of the fabric is not lost or
          destroyed by the "crushing" operation and no new or different
          commercial article is created.  The "crushing" process also does
          not appear to result in  any significant change in the quality,
          texture, or character of the fabric.

          HOLDING

               On the basis of the information and samples submitted, it is
          our opinion that the process of "crushing" the subject fabric in
          France constitutes an "alteration," as that term is used in item
          806.20, TSUS, thereby entitling the returned fabric to the
          benefits of that tariff provision.

                                      Sincerely,





                                      John Durant
                                      Director, Commercial
                                      Rulings Division