HQ 555542: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to pleated women's skirts created by sewing U.S. components together.Assembly;incidental operations;over-edge stitch;buttonholing;Mast;L'Eggs;Oxford Industries.

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 555542

                          June 8, 1990

CLA-2 CO:R:C:V 555542 KAC

CATEGORY:  CLASSIFICATION

TARIFF NO.:  9802.00.80

Mr. Bruce Schiller
Joseph & Schiller Inc.
8725 N.W. 18th Terrace
Suite 301
Miami, Florida    33172

RE:  Applicability of partial duty exemption under HTSUS
     subheading 9802.00.80 to pleated women's skirts created by
     sewing U.S. components together.Assembly;incidental
     operations;over-edge stitch;buttonholing;Mast;L'Eggs;Oxford
     Industries.

Dear Mr. Schiller:

     This is in response to your letters of December 4, 1989, and
May 10, 1990, on behalf of Rhythm Trading, requesting a ruling on
the applicability of subheading 9802.00.80, Harmonized Tariff
Schedule of the United States (HTSUS), to pleated women's skirts
to be imported from Costa Rica.  Samples of a skirt, before and
after assembly, were submitted.

FACTS:

     Rhythm Trading intends to ship fabric cut into pattern
pieces, zippers, buttons, thread, hem ribbon and interfacing, all
of which are of U.S.-origin, to Costa Rica for assembly into
pleated women's skirts.  The assembly operations consist of:

     (1)  sewing one side seam;
     (2)  sewing hem;
     (3)  marking, pressing and sewing pleats;
     (4)  setting in zipper and sewing other side seam;
     (5)  sewing waist band which includes the use of an
          over-edge stitch to secure exposed edge;
     (6)  attaching button; and
     (7)  making the button hole.

     Upon completion of the assembly the pleated women's skirt
will be imported into the U.S.





ISSUE:

     Whether the pleated women's skirt will qualify for the
partial duty exemption available under HTSUS subheading
9802.00.80 when returned to the U.S.


LAW AND ANALYSIS:

     HTSUS subheading 9802.00.80 provides a partial duty
exemption for:

     [a]rticles 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, lubrication, and painting....

All three requirements of HTSUS subheading 9802.00.80 must be
satisfied before a component may receive a duty allowance.  An
article entered under this tariff provision 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 10.16(a), Customs Regulations (19 CFR 10.16(a)),
provides that the assembly operation 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.

     Operations incidental to the assembly process are not
considered further fabrication operations, as they are of a minor
nature and cannot always be provided for in advance of the
assembly operations.  However, any significant process, operation
or treatment whose primary purpose is the fabrication,
completion, physical or chemical improvement of a component
precludes the application of the exemption under HTSUS subheading
9802.00.80 to that component.  See, 19 CFR 10.16(c).

     In United States v. Mast Industries, Inc., 515 F.Supp. 43,
1 CIT 188 (1981), aff'd, 69 CCPA 47, 668 F.2d 501 (1981), the
court, in examining the legislative history of the meaning of
"incidental to the assembly process," stated that:



     [t]he apparent legislative intent was to not preclude
     operations that provide an "independent utility" or that are
     not essential to the assembly process; rather, Congress
     intended a balancing of all relevant factors to ascertain
     whether an operation of a "minor nature" is incidental to
     the assembly process.

The court then indicated that relevant factors included:

     (1)  whether the relative cost and time required by the
          operation are such that the operation may be considered
          minor;
     (2)  whether the operation is necessary to the assembly
          process;
     (3)  whether the operation is so related to the assembly
          that it is logically performed during assembly; and
     (4)  whether economic or other practical considerations
          dictate that the operation be performed concurrently
          with assembly.

     We are satisfied from the documentation and samples
submitted that the U.S. components meet the requirements of HTSUS
subheading 9802.00.80, and, therefore, are entitled to the
partial duty exemption available under HTSUS subheading
9802.00.80.  The foreign operations that entail sewing fabric
onto itself using any type of stitch, including the tucking,
shirring, pleating, and hemming operations will be considered
acceptable assembly operations.  See, L'Eggs Products, Inc. v.
United States, Slip Op. 89-5, 13 CIT   , 704 F.Supp. 1127 (CIT
1989).  Attaching two pieces of fabric together by sewing the
side seams, and sewing the zipper, waist band, and button to the
skirt are considered acceptable assembly operations pursuant to
19 CFR 10.16(a).

     Sewing the over-edge stitch onto the edge of the fabric is
not an acceptable assembly operation.  The thread used in sewing
the over-edge stitch onto the edge of single ply fabric does not
serve as a binding agent, but is merely used to prevent the
unraveling of the fabric.  See, L'Eggs, Slip Op. 89-5 (CIT 1989).
However, upon reviewing the Mast criteria, we find that sewing
the over-edge stitch is an operation incidental to the assembly
process.  A comparison of the relative cost and time required to
perform the operation in question with the cost and time required
to perform the entire assembly reveals that one percent of the
time and less than one percent of the cost are necessary to sew
the over-edge stitch.  Although the over-edge stitch may not be
necessary to the assembly process, we believe it is sufficiently
related to the assembly that it is logically performed
concurrently with assembly.  Therefore, sewing the over-edge
stitch will not preclude an allowance for the cost or value of
the fabric under HTSUS subheading 9802.00.80.

     Making the button hole by slitting the fabric and stitching
the slit edges will also be considered an operation incidental
to assembly upon review of the Mast criteria.  A comparison of
the relative cost and time required to perform the operation in
question with the cost and time required to perform the entire
assembly reveals that six and one-half percent of the time and
approximately one percent of the cost are necessary to make the
button hole.  Moreover, the buttonholing operation is so related
to the assembly that it is logically performed during the
assembly.  The operation completes a closure device that allows
the garment to fit properly by lining up the button with the
button hole.  See, United States v. Oxford Industries, Inc., 1
CIT 230, 517 F.Supp. 694 (1981), aff'd, 69 CCPA 55, 668 F.2d 507
(1981), which held that a buttonholing operation constituted a
permissible incidental operation.  The marking and pressing of
the pleats are also considered operations incidental to the
assembly pursuant to 19 CFR 10.16(b)(7).

HOLDING:

     From the information and samples presented, it is our
opinion that the operations performed abroad to create the
pleated women's skirts are considered proper assembly operations
or operations incidental to the assembly process.  Therefore, the
imported pleated women's skirts may be entered under subheading
9802.00.80, HTSUS, with allowances in duty for the cost or value
of the U.S. components incorporated therein upon compliance with
the documentary requirements of 19 CFR 10.24.

                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division