HQ 555184: Applicability of the duty exemption under HTSUS subheading 9802.00.80 to tubular ribbing fabric incorporated into children's pajamas to be 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 555184

                                   April 25, 1989

          CLA-2 CO:R:C:V 555184 GRV

          CATEGORY:  CLASSIFICATION

          TARIFF NO.:  9802.00.80, HTSUS (formerly 807.00, TSUS)

          Ms. Susanne Fontana
          Susanne Fontana, Inc.
          Custom House Broker
          P.O. Box 330136-0136
          Miami, Florida  33133

          RE:  Applicability of the duty exemption under HTSUS subheading
               9802.00.80 to tubular ribbing fabric incorporated into
               children's pajamas to be imported from the Dominican
               Republic

          Dear Ms. Fontana:

                This is in response to your letters of November 4, 1988,
          requesting rulings on the applicability of subheading 9802.00.80,
          Harmonized Tariff Schedule of the United States (HTSUS) (formerly
          item 807.00, Tariff Schedules of the United States (TSUS)), to
          tubular ribbing fabric incorporated into children's pajamas to be
          imported from the Dominican Republic after assembly operations.
          Samples of the tubular ribbing fabric to be exported from the
          U.S. and the pajamas to be returned to the U.S. were submitted
          for examination.  You also request advice concerning the proper
          method of determining the dutiable portion of the freight costs
          to be incurred in transporting the fabric from the U.S. to the
          place of assembly in the Dominican Republic when the fabric
          transits Puerto Rico.

          FACTS:

                You state that bolts of tubular fabric of U.S. manufacture
          will be cut into continuous lengths measuring five inches and two
          and 3/4 inches wide and wound onto spools in the U.S.  The spools
          of tubular fabric and other U.S. cut fabric components will then
          be transported to Puerto Rico where they will be physically
          landed prior to their reshipment to the intended destination of
          the Dominican Republic.  In the Dominican Republic the spool of
          continuous length ribbing material will be positioned so that the
          ribbing can be sewn directly onto the garment from the spools.
          The ribbing material is folded by an attachment as it is
          initially sewn.  After the desired amount of ribbing material is
          attached to the particular pajama article, the sewing machine
          operator cuts the ribbing from the spool.  The ends of the












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          ribbing are then stitched together and the inside rough edges of
          the ribbing are joined together inside by a "zig zag" or
          finishing overcast stitch.  The assembled pajamas are then
          packaged for return to the U.S.

          ISSUE:

                Whether the tubular fabric will be entitled to the partial
          duty exemption provided for under HTSUS subheading 9802.00.80
          when returned to the U.S. as part of the children's pajamas.

          LAW & ANALYSIS:

                As you may know, the HTSUS replaced the TSUS, effective
          January 1, 1989.  TSUS item 807.00 was carried over into the
          HTSUS without change as subheading 9802.00.80.  This tariff pro-
          vision 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 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 HTSUS subheading 9802.00.80 is subject
          to duty upon the full value of the imported assembled article
          less the cost or value of such U.S. components, upon compliance
          with the documentary requirements of section 10.24, Customs
          Regulations (19 CFR 10.24).

                Section 10.14(a), Customs Regulations (19 CFR 10.14(a)),
          provides, in part, that:

                [t]he components must be in condition ready for assembly
                without further fabrication at the time of their exporta-
                tion from the United States to qualify for the exemption.
                Components will not lose their entitlement to the exemption
                by being subjected to operations incidental to the assembly
                either before, during, or after their assembly with other
                components.  Materials undefined in final dimensions and
                shapes, which are cut into specific shapes or patterns
                abroad are not considered fabricated components.















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                Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
          provides, in part, that:

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

                In the instant case, the description of the foreign assem-
          bly operation and an examination of the sample submitted shows
          that the tubular ribbing fabric is eligible for the partial duty
          exemption available under HTSUS subheading 9802.00.80.  In the
          U.S., bolts of tubular fabric are cut into continuous lengths and
          spooled for export.  Once abroad, the fabric is sewn directly
          onto the garment from the spools and cut to length by the opera-
          tor following the assembly operation.  A trimming or cutting to
          length operation of U.S. component material sent abroad in bulk
          or on spools or rolls for assembly does not constitute a fabri-
          cation process.  The Olga Company v. United States, 71 Cust. Ct.
          42, C.D. 4468 (1973).  Accordingly, we are of the opinion that
          the fabric is in condition ready for assembly when exported.
          Further, merely cutting spooled fabric to length is considered an
          operation incidental to the assembly process.  See, 19 CFR
          10.16(b)(6).  Stitching constitutes a sewing operation, which is
          specifically enumerated as an acceptable assembly operation.  (19
          CFR 10.16(a)).  An examination of the sample submitted shows that
          the fabric does not lose its physical identity in the assembly
          operation and that it is not advanced in value or improved in
          condition except by assembly or operations incidental to the
          assembly operations.

                With respect to the issue regarding the dutiability of the
          freight charges, based upon the information presented, we cannot
          conclusively determine that Puerto Rico will, in fact, be the
          port of exportation for purposes of section 10.17, Customs
          Regulations (19 CFR 10.17).  However, assuming that Puerto Rico
          is the port of exportation, then a separate rate from the
          transportation company for the Miami to Puerto Rico portion of
          the journey and another rate for the Puerto Rico to the Dominican
          Republic portion will suffice to determine the charges from
          Puerto Rico to the Dominican Republic.




















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          CONCLUSION:

                On the basis of the described assembly operation and after
          examining the samples submitted, the continuously cut and spooled
          tubular fabric to be incorporated into children's pajamas will be
          entitled to the partial duty exemption under HTSUS subheading
          9802.00.80 when returned to the U.S., upon compliance with the
          requirements of 19 CFR 10.24.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division