HQ 555028: Reconsideration of Internal Advice 56/87 Regarding the Applicability of subheading 9802.00.80, HTSUS, to Certain Belt Loops

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 555028

                                  October 31, 1988

          CLA-2  CO:R:C:V  555028  DBI

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.80; 807.00

          District Director of Customs
          El Paso, Texas  79985

          RE:   Reconsideration of Internal Advice 56/87 Regarding the
                Applicability of subheading 9802.00.80, HTSUS, to Certain
                Belt Loops

          Dear Sir:

                This is in response to your memorandum of March 14, 1988,
          in which you request reconsideration of our decision on Internal
          Advice 56/87 dated February 1, 1988 (HQ 554812).  That decision
          concerned the applicability of item 807.00, Tariff Schedules of
          the United States (TSUS), to belt loops made in Mexico from
          component materials of U.S. origin.

          FACTS:

                The facts of the manufacturing process are not in dispute
          and those facts, as set forth in our decision dated February 1,
          1988, are incorporated by reference herein.  The basis for your
          reconsideration request is that our decision in IA 56/87 is
          inconsistent with our decision in IA 85/85 dated January 14, 1986
          (HQ 553959), in which we held that the process of making certain
          belt loop strips from material exported to Mexico constitutes a
          fabrication and cannot be considered incidental to the assembly
          operation.  You point out that IA 85/85 and IA 56/87 involve the
          same steps in making belt loop strips, except that in this case a
          lining has been added which makes the actual belt loops thicker
          and firmer.  Your office recommends that IA 56/87 be reversed and
          that the process of manufacturing belt loops be considered a
          fabrication, thereby precluding item 807.00, TSUS, treatment for
          these components.

          ISSUE:

                Whether the belt loops, when returned to the U.S., are
          eligible for the partial duty exemption in subheading 9802.00.80,
          Harmonized Tariff Schedule of the United States (HTSUS) (807.00,
          TSUS).















                                         -2-



          LAW AND ANALYSIS:

                As you are aware, the HTSUS will replace the TSUS,
          effective January 1, 1989.  Item 807.00, TSUS, will be carried
          over into the HTSUS without change as subheading 9802.00.80.
          Subheading 9802.00.80, HTSUS, applies to articles assembled
          abroad in whole or in part of fabricated components, the products
          of the U.S., with no operations performed thereon except the
          attachment of the components to form the imported merchandise and
          operations incidental thereto.  An article classified under
          subheading 9802.00.80, HTSUS, is subject to duty upon the full
          appraised value of the imported article, less the cost or value
          of such products of the U.S.  Section 10.14(a), Customs
          Regulations (19 CFR 10.14(a)), provides that the components must
          be in condition ready for assembly without further fabrication at
          the time of their exportation from the U.S. to qualify for the
          exemption.

                In the present case, you do not dispute that the belt loop
          strip and the lining material are two separate components that
          are joined.  However, it is your position that the sewing of the
          belt loop strips end-to-end in preparation for assembly shows
          that they are not fabricated components exported ready for
          assembly, nor is this an operation incidental to assembly, citing
          IA 85/85.

                IA 85/85, (HQ 553959 dated January 14, 1986), held that no
          allowances could be made under item 807.00, TSUS, for belt loops
          made in Mexico for use in the assembly of jeans that were
          returned for sale in the U.S.  In that case, the belting fabric
          material was cut to length and width before it was exported to
          Mexico.  The foreign processing consisted of placing the exported
          fabric material on a two-needle chainstitch sewing machine which
          folded the material upon itself and also stitched the folded
          strip into a roll of belt loop material.  Then the length of the
          sewn belt loop material was mounted on an automated belt loop
          attaching machine which cut the loop material to length and, at
          the same time, attached the cut lengths of belt loops by two
          bartacks to the trouser in a machine cycle.  In IA 85/85, we
          reasoned that the manufacturing of the belt loop strips from the
          exported fabric in the manner described was not an assembly
          operation.  It is clear from the facts that the belt loop fabric
          was folded and sewn to itself which is not an acceptable assembly
          operation under item 807.00, TSUS.  See HQ 554653 (July 17,
          1987).















                                         -3-



                In the present case, the strip of belt loop material is
          chemically fused together with the inner lining material, a
          process which you do not dispute constitutes the joining of two
          materials.  Thus, the distinction between the facts of the two
          cases is that, in the instant case, the belt loop material is
          fused with inner lining material while in HQ 553959 the belt loop
          material is sewn to itself.  In HQ 554812, we held that the
          joinder of the belt loop fabric and the lining materials
          constituted a subassembly of components, and the cutting of the
          belt loops from the continuous lengths constituted an operation
          incidental to this subassembly.  This is still our position
          regarding those processes.

                With regard to the sewing together of the belt loop strips
          end-to-end to form the continuous chain of belt loop material, it
          our opinion that this is an operation incidental to the
          subassembly of the belt loop fabric and the lining material.  The
          sewing of the strips end-to-end does not further fabricate the
          material into a new article.  The purpose of this operation is to
          facilitate the subassembly of the belt loop fabric and the
          lining.  Making a continuous chain of belt loop material makes it
          easier to feed the material into the fusing machine.  Therefore,
          this operation does not preclude the belt loops from receiving
          subheading 9802.00.80, HTSUS, treatment.

          HOLDING:

                For the reasons set forth above, we reaffirm our prior
          ruling granting allowances under subheading 9802.00.80, HTSUS,
          for the exported belt loop components of U.S. origin.

                                     Sincerely,





                                     John Durant
                                     Director, Commercial
                                     Rulings Division