HQ 556675: Applicability of partial duty exemption under subheading 9802.00.80, HTSUSA, to plastic hangers wrapped with string; General Instruments Corp. v. U.S.; HRL 555221, 555533; 19 C.F.R. 10.24; winding

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 556675      
                        June 11, 1992    

CLA-2 CO:R:C:S 556675 SER

CATEGORY: Classification

TARIFF NO.:  9802.00.80

Mr. Leonard A. Clark
205 Market, St.
Laredo, TX  78040

RE:  Applicability of partial duty exemption under subheading
     9802.00.80, HTSUSA, to plastic hangers wrapped with string;
     General Instruments Corp. v. U.S.; HRL 555221, 555533; 19
     C.F.R. 10.24; winding

Dear Mr. Clark:

     This is in reference to your letter of March 25, 1992,
received by this office on April 21, 1992, requesting a ruling
concerning U.S. plastic hangers and string sent to Mexico for the
string to be wrapped around the hanger.

FACTS:

     The sample submitted consists of a six foot length of cotton
string attached at one end to a metal clip, and plastic
"hangers".  The plastic "hangers", the cotton string and the
metal clip are all stated to be of U.S. origin.  The plastic
"hangers" and string with metal clip attached, are then shipped
to Mexico where the string with metal clip is wrapped around the
plastic "hanger".  The completed article is stated to be used to
attach price tags in grocery stores, and hung by a hook from the
ceiling to display prices and names of different articles.

ISSUE:

     Whether the plastic "hangers" with string will qualify for
the partial duty exemption available under subheading 9802.00.80,
HTSUSA, when imported into the U.S.  

LAW AND ANALYSIS:

     Subheading 9802.00.80, HTSUSA, provides a partial duty
exemption for:
n
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     [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 subheading 9802.00.80, HTSUSA, 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 cost or value of the imported assembled article,
less the cost or value of the U.S. components assembled therein,
upon compliance with the documentary requirements of section
10.24, Customs Regulations (19 CFR 10.24).

     Foreign winding operations have been considered by the
courts and Customs to be within the context of this tariff
provision and have been found to constitute assembly steps rather
than a "further fabrication" within the meaning of that tariff
provision.  See, General Instrument Corporation v. U.S., 61 CCPA
86, C.A.D. 1128, 499 F.2d 1318, 1320, (1974), rev'g 359 F.Supp.
1390 (1973), and Headquarters Ruling Letters (HRLs) 555221 dated
October 24, 1989 and 555533 dated June 4, 1990.  In General
Instruments Corp. v. U.S., wire, which was used to make
horizontal coils which are used in television sets, was despooled
from the supply spool and then wound around a ferrite core for a
prescribed number of turns.  In HRL 555533, Customs held that the
assembly of starter solenoid switches, whereby wire was wound
around a spool, was considered an acceptable assembly operation
within the meaning of this tariff provision.  

     Consistent with these rulings, in this case, the operation
in Mexico of winding the cotton string with metal clip around the
plastic "hangers" constitutes an acceptable assembly operation
within subheading 9802.00.80, HTSUSA.

HOLDING:

     On the basis of the information presented, the winding of
the cotton string around the plastic "hangers" constitutes an
acceptable assembly operation under subheading 9802.00.80,
HTSUSA.  Therefore, an allowance in duty may be made under
subheading 9802.00.80, HTSUSA, for the cost or value of the U.S.-
origin components, provided that the proper documentationn
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requirements of 19 CFR 10.24 are satisfied.  The tariff
classification of the articles at issue is subheading 5609.00.10,
HTSUSA, with a duty rate of 5.8% ad valorem.

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division