HQ 555883: Duty exemption applicable to certain cosmetic compacts assembled and/or packaged in Mexico with U.S.-origin components

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 555883

                          June 13, 1991


CLA-2 CO:R:C:S 555883 RA

CATEGORY:  CIassification 

TARIFF NO.:  9801.00.10; 9802.00.80

Ms. Valerie Cauifieid 
Vice President
Freight Brokers International Inc. 
1200 Brunswick Avenue 
Far Rockaway, New York 11691

RE:  Duty exemption applicable to certain cosmetic compacts 
     assembled and/or packaged in Mexico with U.S.-origin 
     components

Dear Ms. Caulfield:

     This is in response to your letter of January 16, 1991, to
our New York office, requesting a ruling on behalf of Revlon Inc.
concerning the applicability of subheading 9801.00.10, Harmonized
Tariff Schedule of the United States (HTSUS), to certain cosmetic
compacts to be imported into the U.S. from Mexico.   Your letter
was referred to this office for a reply.

FACTS:

     Various components of U.S. origin are exported to Mexico for
assembly and/or packaging operations to create rouge, face powder
and eyeshadow compacts.   With respect to the rouge compact, the
foreign operations consist of pressing and gluing a filled make-
up pan into a one-piece compact with mirror already attached.  A
plastic protective cover is then placed on top of the make-up, a
brush applicator with plastic sleeve is placed inside the 
compact, and a label is affixed to the bottom.   The compact is
then packaged for shipment to the U.S.

     The face powder compact is subjected to essentially the same
operations in Mexico as the rouge compact, except that a foam
applicator pad is placed inside the compact instead of a brush. 
The make-up pan for the eyeshadow compact is not glued but is
pressed into the compact, a foam applicator brush is placed into
the compact, and a label is affixed to the bottom before 
packaging.
                              - 2 -

ISSUE:

     Whether the imported compacts qualify for a duty exemption
under subheading 9801.00.10 or 9802.00.80, HTSUS, when returned 
to the U.S.

LAW AND ANALYSIS:

     Subheading 9801.00.10, HTSUS, provides for the duty-free 
entry of products made in the U.S. which are returned without
having been advanced in value or improved in condition while
abroad, provided the documentation requirements of section 10.1,
Customs Regulations (19 CFR 10.1), are met.  In United States v.
John V. Carr & Sons, Inc., 69 Cust. Ct. 78, C.D. 4377, 347 F.Supp.
1390  (1972), aff'd 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974),
the court stated that absent some alteration or change in the 
item itself, the mere repacking of the item, even for retail 
sale, will not preclude free entry of the merchandise as American
goods returned.

     In the instant case, the attachment of the make-up pans to
the three types of compacts by gluing or force fitting 
constitutes more than a mere packaging operation and, in our
opinion, clearly advances the value and improves the condition of
the merchandise-  However, we believe that an allowance in duty 
may be made under subheading 9802.00.80, HTSUS,  for the cost or
value of the one-piece compacts and make-up pans.   This tariff
provision provides a partial exemption from duty 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 
     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 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 performed abroad 
may consist of any method used to join or fit together solid
components, such as force fitting or gluing.
                              - 3 -

     As the brush applicator, foam applicator pad and foam
applicator brush are merely placed into the rouge, face powder 
and eyeshadow compacts, respectively, and therefore are not
advanced in value or improved in condition, these components are
entitled to duty-free treatment under subheading 9801.00.10, upon
compliance with the documentation requirements of 19 CFR 10.1.
Moreover, the packaging materials of U.S. origin, including the
plastic protective covers, plastic sleeves, boxes and cartons are
entitled to free entry under subheading 9801.00.10.   See
Headquarters Ruling Letter 731806 dated November 18, 1988.

HOLDING:

     Based on the information submitted, allowances in duty may 
be made under subheading 9802.00.80, HTSUS, for the cost or value
of the U.S.-origin one-piece compacts and filled make-up pans 
that are joined together in Mexico by gluing or force fitting,
assuming compliance with the documentation requirements of 19 CFR
10.24.  Classification allowances also may be made under 
subheading 9801.00.10, HTSUS, for the cost or value of the foam 
or brush applicators and packaging materials of U.S. origin,
provided the documentation requirements of 19 CFR 10.1 are
satisfied.

                              Sincerely,


                              John Durant, Director
                              Commercial Rulings Division