HQ 556746: Subheading 9802.00.80, HTSUS; "Static Conductive Brush Assembly"; substantial transformation; 19 CFR 10.12(e); 19 CFR 10.14(b); Uniroyal; Belcrest

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 556746

                              
                            January 5, 1993

CLA-2 CO:R:C:V 556746 BLS

CATEGORY:  Classification

TARIFF NO.:  9802.00.80

District Director of Customs 
Box 3130
Laredo, Texas 78044

RE:  Subheading 9802.00.80, HTSUS; "Static Conductive Brush     
     Assembly"; substantial transformation; 19 CFR 10.12(e);
     19 CFR 10.14(b); Uniroyal; Belcrest

Dear Sir:

     This is in reference to the letter dated April 30, 1992,
from John M. McKeon, Customhouse Broker, on behalf of Hunt Data
Products, Inc., and subsequent conversations with members of my
staff, for a ruling concerning the applicability of subheading
9802.00.80, Harmonized Tariff System of the United States
("HTSUS"), to a "Static Conductive Brush Assembly" imported from
Mexico.  The classification of the article was also,requested,
and will be the subject of a separate letter.  A sample of the
product at various stages of processing has been submitted.  We
understand that the articles are currently being imported through
your port.

FACTS:

     Static conductive plastic pellets of U.S. origin are
exported to Mexico where the material is injection molded to form
a brush handle.  Ten equidistant holes are formed during this
process awaiting the insertion of bristles.  The formed article
also includes a metal screw embedded on a side of the handle
during the molding process.  The handle is then returned to the
U.S. where horsehair bristles of Argentinian origin are
sterilized and mixed with .010 dia. conductive nylon bristles of
U.S. origin.  The mix of bristles for each of the ten tufts is
composed of 80 percent horsehair and 20 percent nylon.  Each tuft
is removed by automatic equipment from a stock box containing a
mix of the bristles.  The tuft is then stapled and driven into
the bottom of the pre-molded holes in the brush handle.  After
the ten holes are filled, the brush is trimmed by machine to a
length of 2 inches.
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The brush is then exported to Mexico, where it is assembled to a
cord set, which connects the conductive brush to the grounding
source.  The cord set is composed of components of both U.S. and
foreign origin, and is also assembled in Mexico, as follows:  The
cord, ring terminal, clip and insulator are assembled
mechanically, and the tubing is then shrunk around the ring
terminal, using hot air.  The resultant cord set is then
assembled to the brush with a plastic acorn nut using the metal
screw affixed to the side of the brush handle.  A label and loop
and hook fastener are then applied to the brush.  The final
assembly is packaged into a display card and clamshell package to
produce the final product.  The label, fastener, display card and
clamshell are of U.S. origin.  The clamshell is then heat sealed
before export to the U.S.

ISSUE:

     Whether the "static conductive brush assembly" qualifies for
the partial duty exemption under subheading 9802.00.80, HTSUS.

LAW AND ANALYSIS:

     Subheading 9802.00.80, HTSUS, 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, 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 this tariff provision is subject to duty
upon the full 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).

     Section 10.12(e), Customs Regulations, provides generally
that an article wholly or partially of foreign components or
materials, may be a "product of the United States" if such
foreign components or materials are "substantially transformed "
by a process of manufacture into a new or different article, or
are merged into a new or different article.  Section 10.14(b)
provides that "substantial transformation" occurs when, as a
result of manufacturing processes, a new and different article   
                            - 3 -




emerges, having a distinctive name, character, or use, which is
different from that originally possessed by the article or
material before being subject to the manufacturing process.  If
the manufacturing or combining process is merely a minor one
which leaves the identity of the article intact, a substantial
transformation has not occurred.  See, Uniroyal Inc., v. United
States, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed. Cir.
1983). and Belcrest Linens v. United States, 573 F. Supp. 1149
(CIT 1983), 741 F.2d 1368 (1984).

     In Uniroyal, footwear uppers were manufactured in Indonesia
and then imported into the United States where outsoles were
attached.  The court found the imported uppers were the very
essence of the imported shoe, and that the minor operation of
attaching only the outsoles did not result in a substantial
transformation.  In reaching its decision, the court contrasted
the major manufacturing operations performed abroad with the
relatively minor processes performed in the United States.  A
major factor in the court's decision was the substantial cost of
the operations performed abroad as compared to the cost of
processing in the United States.

     Similarly, in the instant case, the brush handle does not
lose its identity during the "bristling" process.  The insertion
of the bristles merely completes the manufacture of the brush,
which is composed of the brush handle, and the bristles.  The
brush handle retains its identity through the completion of the
U.S. processing operations.  Further, the cost of the molding
operation in Mexico is approximately twice the cost of the
bristling operation in the United States.  Accordingly, the brush
handle is not substantially transformed into a product of the
United States within the meaning of section 10.14(b) of the
Regulations.  Therefore, as the brush handle is not considered a
U.S. fabricated component, no allowance in duty may be made for
its cost or value under subheading 9802.00.80, HTSUS, when
returned as part of the static conductive brush assembly.

     However, allowances in duty may be made under this tariff
provision in the cost or value of the U.S. components comprising
the cord set.  The packaging materials of U.S. origin are
entitled to duty-free treatment as American goods returned under
subheading 9801.00.10, HTSUS, upon compliance with the
documentary requirements of section 10.1, Customs Regulations (19
CFR 10.1).





                               - 4 -




HOLDING:

     The brush handle sent abroad for assembly with the cord set
is not eligible for an allowance in duty under subheading
9802.00.80, HTSUS,  upon return from the United States.  However,
the U.S. components which are used in the assembly of the cord
set are eligible for the exemption, since these items comply with
the requirements of subheading 9802.00.80, provided the
documentary rerquirements of section 19 CFR 10.24, are satisfied.
   
                            Sincerely,



                            John Durant, Director