HQ 554953: Application for Further Review of Protest No. 1001-7-002717, protesting denial of TSUS item 807.00 treatment to U.S. thread imported from the Dominican Republic

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 554953

                        October 16, 1989

CLA-2 CO:R:C:V 554953 GRV

CATEGORY:  CLASSIFICATION

TARIFF NO.:  9802.00.80

Area Director of Customs
JFK Airport Area
Jamaica, New York  11430

RE:  Application for Further Review of Protest No. 1001-7-002717,
     protesting denial of TSUS item 807.00 treatment to U.S.
     thread imported from the Dominican Republic

Dear Sir:

     The above-referenced protest contests your denial of the
partial duty exemption under item 807.00, Tariff Schedules of the
United States (TSUS) (now subheading 9802.00.80, Harmonized
Tariff Schedule of the United States (HTSUS)), to U.S. thread
assembled with garments imported from the Dominican Republic.

FACTS:

     The record in this matter reflects that thread of U.S.
origin was exported in continuous lengths and used abroad to join
foreign components into garments.

     On return to the United States, the assembled garments were
denied the partial duty exemption under TSUS item 807.00 by your
office based on a distinction implied in a prior ruling letter--
Headquarters Ruling Letter 061402--, which stated that domestic
sewing thread when used to assemble American-made fabric
components together or to join buttons to fabric components may
qualify for allowance under item 807.00.  Your office indicated
that this language inferred that if U.S. thread was used to join
other than American components, an 807.00 allowance would not
apply.

ISSUE:

     Whether the thread of U.S. origin qualifies for the partial
duty exemption under TSUS item 807.00.

LAW & ANALYSIS:

     TSUS article 807.00 provides a partial duty exemption for:

     [a]rticles assembled abroad in whole or in part of fab-
     ricated 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.

An article entered under this tariff provision is subject to a
duty upon the full value of the imported assembled article, less
the cost or value of U.S. components meeting these requirements
assembled therein, provided there has been compliance with the
documentation requirements of section 10.24, Customs Regulations
(19 CFR 10.24).

     In light of the Court of International Trade's recent
decision in L'Eggs Products, Inc., v. United States, Slip Op. 89-
5, 13 CIT ___, 704 F.Supp. 1127 (1989), (holding that, in view of
the precedent in the Baylis decision (59 CCPA 9, C.A.D. 1026, 451
F.2d 1026 (1973)), thread is a component for purposes of TSUS
item 807.00), and as no issue is presented in this protest as to
whether the subject thread is not of U.S. origin, or otherwise
ineligible for this tariff provision, we find that the exported
thread is qualified for the partial duty exemption under TSUS
item 807.00.

HOLDING:

     On the basis of the record presented in this matter, it is
our opinion that the thread qualifies as a U.S. component
assembled abroad within the meaning of TSUS item 807.00.  Accord-
ingly, the returned garments assembled with the U.S. thread are
entitled to the partial duty exemption under that tariff
provision.  You are directed to grant the protest in full.
Please provide a copy of this ruling to the protestant.

     Headquarters Ruling Letter 061402 (July 9, 1979) is modified
accordingly.

                              Sincerely,





                              John Durant, Director
                              Commercial Rulings Division