HQ 555858: Applicability of partial duty exemption in subheading 9802.00.80, HTSUS, to a plastic TV cabinet assembled and partly painted abroad

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 555858

                          MAY 13, 1991

CLA-2 CO:R:C:S 555858 RA

CATEGORY:  Classification

TARIFF NO.: 9802.00.80

Mr. Michisuke Araki
Vice President
Kyomex, S.A. de C.V.
Apartado Postal #349
Admon. Plaza Patria
22441 Tijuana, B.C., Mexico

RE:  Applicability of partial duty exemption in subheading
     9802.00.80, HTSUS, to a plastic TV cabinet assembled and
     partly painted abroad

Dear Mr. Araki:

     This is in response to your letter of January 4, 1991,
regarding the eligibility for a duty allowance under subheading
9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS), of a U.S.-made television cabinet assembled in Mexico 
by Kyomex and returned to the U.S. as part of a completed
television set.

FACTS:

     Molded plastic television cabinets, manufactured in the 
U.S., are exported to Mexico along with U.S.-origin plastic 
foil, paint and bonding hooks.   In Mexico, two plastic bonding
hooks are attached to the inside of each cabinet to hold the 
front of the cabinet to the rear cover.   The front section of the
cabinet is then painted "for cosmetic reasons only," and a pre-
cut decorative thin sheet of plastic foil is laminated to the top
and the left and right sides of the cabinet.   The finished cabi-
nets are then shipped to another facility in Mexico where they are
used to make completed television sets.   You ask whether the
decorative painting renders the cabinets dutiable when they are
returned to the U.S. as part of the completed television sets.

ISSUE:

     Can an allowance in duty be made under subheading 
9802.00.80, HTSUS, for parts of U.S. origin which are assembled
abroad into cabinets in the above-described manner?
                              - 2 -


LAW AND ANALYSIS:

     Subheading 98202.00.80, HTSUS, provides a partial duty
exemption for articles assembled abroad in whole or in part of 
U.S. fabricated components, provided the components:  (a) are
exported in condition ready for assembly without further
fabrication;  (b) do not lose their physical identity by change in
form, shape, or otherwise, and;  (c) are not 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.

     All three requirements of subheading 9802.00.80, HTSUS, must
be satisfied before a component may receive a duty allowance.  An
article entered under subheading 9802.00.80, HTSUS,  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)),
states that the assembly operations may consist of any method 
used to join or fit together solid components, such as welding,
soldering, riveting, force fitting, gluing, or the use of
fasteners.   These operation may be preceded, accompanied, or
followed by operations incidental to the assembly.   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
subheading 9802.00.80, HTSUS, to that component.   See 19 CFR
10.16(c).

     Examples of operations considered incidental to assembly are
set forth in 19 CFR 10.16(b), which include the "[a]pplication of
preservative paint or coating...."  However,  19 CFR 10.16(c)
provides that "[painting primarily intended to enhance the
appearance of an article..." is not considered incidental to the
assembly process.   In Headquarters Ruling Letter (HRL) 553778
dated September 20, 1985, it was determined that the painting of
color television cabinets could not be considered as an operation
incidental to assembly.   Similarly, in HRL 553640 dated August 9,
1985, automobile truck parts which were painted abroad for
ornamental purposes were held dutiable on total quantity and 
value when returned to the U.S.

     In regard to the facts of this case, as the front section of
the plastic television cabinet is painted for decorative purposes
only, no allowance in duty may be made under subheading 
9802.00.80, HTSUS, for the cost or value of the U.S.-made 
cabinet.   However, attaching the two plastic bonding hooks to the
inside of the cabinet and laminating the plastic foil to the top
                              - 3 -

and sides of the cabinet are considered acceptable assembly
operations under 19 CFR 10.16(a).  Therefore, allowances in duty
may be made for the cost or value of the U.S.-origin bonding 
hooks and pre-cut plastic foil, upon compliance with the
documentary requirements of section 10.24, Customs Regulations 
(19 CFR 10.24).

     We have enclosed for your information a publication which
explains the conditions and requirements for entry under 
subheading 9802.00.80, HTSUS.

HOLDING:

     The decorative painting of the U.S.-made molded plastic
cabinet in Mexico precludes the application of the duty exemption
under subheading 9802.00.80, HTSUS, to that component.  However,
upon importation of the completed television sets, allowances in
duty may be made under this tariff provision for the cost or 
value of the U.S.-origin bonding hooks and plastic foil which are
merely assembled to the cabinet abroad, provided the 
documentation requirements of 19 CFR 10.24 are satisfied.

                              Sincerely,


                              John Durant, Director
                              Commercial Rulings Division

Enclosure