HQ 555024: Applicability of partial duty exemption of item 806.20, TSUS, to certain fabric exported to Switzerland to be redyed

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 555024

                                    June 10, 1988

          CLA-2  CO:R:C:V   555024DBI

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.40; 806.20

          Melanie S. Barlow
          Roffe, Inc.
          808 Howell Street
          Seattle, Washington  98101

                RE:     Applicability of partial duty exemption of item
                        806.20, TSUS, to certain fabric exported to
                        Switzerland to be redyed

          Dear Ms. Barlow:

                This is in response to your letter of May 13, 1988, in
          which you request a ruling concerning the applicability of item
          806.20, Tariff Schedules of the United States (TSUS), to certain
          foreign fabric that will be shipped to Switzerland to be redyed.

          FACTS:

                You advise that your company imports stretch pant fabrics
          for skiwear from Switzerland.  The color fabric that is "in
          fashion" in the skiwear industry changes on an annual basis which
          results in an obsolete inventory of colors that are unusable.
          Your company is planning to ship the fabric back to Switzerland
          to be redyed either navy or black by the supplier who sold the
          fabric.  You indicate that navy and black are two colors that
          have been in your company's line for many years and that you will
          be able to manufacture and sell pants in these color fabrics.

          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, (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
          value or improved in condition by any process of manufacture or
          other means.












                In Amity Fabrics, Inc. v. United States, 43 Cust. Ct. 64,
          C.D. 2104 (1959), fabrics colored "pumpkin" were imported into
          the U.S. from Italy and exported back to Italy to be redyed black
          since the "pumpkin" color had gone out of fashion and black was a
          consistently good seller.  It was held that the identity of the
          goods was not lost or destroyed by the dyeing process, that no
          new article was created and that there was no change in the
          character, quality, texture, or use of the merchandise since it
          was merely changed in color.  The court found that such change
          constituted an alteration and therefore the merchandise was
          subject to duty only on the value of the alteration.

                In the present case, the redyeing process is similar to
          that in the Amity case.  The fabric is no longer marketable in
          the original colors as imported and the company will export the
          fabric back to the supplier to be redyed to a color that is
          marketable.  The fabric at issue would not lose its identity by
          the dyeing process, no new article would be created and only the
          color would be changed, not the character, quality, texture or
          use of the fabric.  Therefore, we believe that the redyeing
          process constitutes an alteration under item 806.20, TSUS.

          HOLDING:

                On the basis of the information submitted, it is our
          opinion that the redyeing process may be considered an alteration
          as that term is used in item 806.20, TSUS, and therefore the
          exported fabric is entitled to tariff treatment under item
          806.20, TSUS, upon compliance with the regulations.  Accordingly,
          the redyed fabric may be entered under item 806.20, TSUS, with
          duty assessed only on the cost or value of the foreign
          processing.

                                     Sincerely,





                                     John Durant
                                     Director, Commercial
                                     Rulings Division