HQ 954344: Four Toy Vehicles: "Duracell Racer, Hot Wheels Camaro, Hot Wheels Dragster, and McDonald's Dragster;" Printed Paper Advertising Inserts: American Goods Returned

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 954344

                         April 14, 1994


CLA-2  CO:R:C:F  954344  GGD

CATEGORY:  Classification

TARIFF NO.:  9503.90.60; 9801.00.10

Mr. Jerrold E. Anderson
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661-3693

RE:  Four Toy Vehicles: "Duracell Racer, Hot Wheels Camaro, Hot
     Wheels Dragster, and McDonald's Dragster;" Printed Paper
     Advertising Inserts: American Goods Returned

Dear Mr. Anderson:

     This letter is in response to your inquiry of May 12, 1993,
on behalf of your client, M-B Sales, concerning the
classification under the Harmonized Tariff Schedule of the United
States (HTSUS), of four toy vehicles imported from China.  Each
vehicle has a paper insert that has been printed with advertising
in the U.S., then sent to China to be packaged with the toys and
returned.  Production sample toys were submitted with your
inquiry.  

FACTS: 

     Each of the toy cars at issue is free-wheeling, with a metal
body, plastic wheels, and thin wire axles.  The "Duracell Racer"
and "Hot Wheels Camaro" measure approximately 3 inches in length,
while the "Hot Wheels Dragster" and "McDonald's Dragster" measure
approximately 4-1/2 inches in length.  Each vehicle is imported
in a sealed plastic bag with a paper advertising insert
previously printed in the United States.

ISSUES:

     1) What is the proper classification of the toy cars?

     2) Whether the U.S.-origin printed matter is entitled to a
duty exemption under subheading 9801.00.10, HTSUS. 
                               -2-

LAW AND ANALYSIS:

     Classification under the HTSUS is made in accordance with
the General Rules of Interpretation (GRIs).  The systematic
detail of the harmonized system is such that virtually all goods
are classified by application of GRI 1, that is, according to the
terms of the headings of the tariff schedule and any relative
Section or Chapter Notes.  In the event that the goods cannot be
classified solely on the basis of GRI 1, and if the headings and
legal notes do not otherwise require, the remaining GRIs may then
be applied.  The Explanatory Notes (ENs) to the Harmonized
Commodity Description and Coding System, which represent the
official interpretation of the tariff at the international level,
facilitate classification under the HTSUS by offering guidance in
understanding the scope of the headings and GRIs.

     The proper heading in this case is clear, i.e., heading
9503, for other toys.  Since none of the toy cars is a model,
incorporates a motor, nor contains a spring mechanism, only one
subheading is applicable.  The toy cars are classified in
subheading 9503.90.60, HTSUS.

     Subheading 9801.00.10, HTSUS, provides for the duty-free
entry of products of the U.S. that are returned after having been
exported, without having been advanced in value or improved in
condition by any process of manufacture or other means while
abroad.  In Superscope, Inc. v. United States, 13 CIT 997, 727
F.Supp. 629 (1989), the court held that certain glass panels of
U.S. origin that were exported, repacked abroad with certain
foreign components, and returned to the U.S. as part of
unassembled audio cabinets, were entitled to duty-free entry
under item 800.00, Tariff Schedules of the United States (TSUS),
since the U.S. panel portion of the imported article was "not
'advanced in value or improved in condition ... while abroad,'
but [was] merely repacked."  Id. at 631.  

     Although the Superscope case concerned the TSUS, the
decision is equally applicable to similar situations arising
under subheading 9801.00.10, HTSUS, since that provision's
predecessor - item 800.00, TSUS - and relevant Schedule 8, TSUS,
headnotes, were carried over into the HTSUS, virtually unchanged. 
See also Headquarters Ruling Letter 555428, issued April 17,
1990.

     In this case, because the U.S.-origin printed advertising
inserts are merely placed inside the plastic bags and sealed,
they are not advanced in value or improved in condition while 
                               -3-

abroad.  Therefore, when the toy cars are imported, the printed
matter will be entitled to duty-free treatment under subheading
9801.00.10, HTSUS, assuming compliance with the documentation
requirements of 19 CFR 10.1.

HOLDING:

     The four toy cars, identified as "Duracell Racer, Hot Wheels
Camaro, Hot Wheels Dragster, and McDonald's Dragster," are
properly classified in subheading 9503.90.60, HTSUS, the
provision for "Other toys...and accessories thereof: Other:
Other: Other toys (except models), not having a spring
mechanism."  The applicable duty rate is 6.8 percent ad valorem.

     The U.S.-origin printed advertising inserts are entitled to
a duty exemption under subheading 9801.00.10, HTSUS, assuming
compliance with the documentation requirements for this tariff
provision.  

                               Sincerely,




                               John Durant, Director
                               Commercial Rulings Division