HQ 555363: Applicability of alterations provision in subheading 9802.00.50, HTSUS, to boxer shorts exported to Canada and printed with designs

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 555363

                         August 25, 1989

CLA-2-CO:R:C  555363 RA

CATEGORY: Classification

TARIFF NOS.: 9802.00.50 and 6207.11.00, HTSUS

Mr. Noel Roberts
NGR Marketing
4139 Parker Street
Bumaby, B.C.
Canada V5C3C2

RE: Applicability of alterations provision in subheading
    9802.00.50, HTSUS, to boxer shorts exported to Canada
    and printed with designs

Dear Mr. Roberts:

     This is in regard to your letter of February 20, 1989,
addressed to our New York office and referred to us for reply
concerning the tariff treatment for cotton shorts of U.S. origin
printed in Canada.

FACTS:

     Plain colored cotton boxer shorts made in the U.S. are
printed in Canada with designs by the silkscreening method and
packed in a clear plastic box for return to the U.S.  The
printing on the submitted sample depicts various stock market
results and business statements or charts relating to the
financial market.

ISSUE:

     Will the provision in subheading 9802.00.50, Harmonized
Tariff Schedule of the U.S. (HTSUS), for alterations apply to the
returned printed shorts?  How will they be classified?

LAW AND ANALYSIS:

     Subheading 9802.00.50, HTSUS, provides for a partial
exemption from duty for articles returned to the U.S. after
having been exported for alterations while abroad.  The articles
must be completely finished when they leave the U.S. and not
undergo any intermediate processing to finish them in the foreign
country.  This provision allows a duty to be assessed only on the
cost of the processing abroad.  However, its application is
precluded where the foreign operations result in commercially
different articles or where they complete the manufacture began
in the U.S. in order to meet pre-established specifications.
Dolliff & Company, Inc. v. U.S., 66 CCPA 77, C.A.D. 1225, 599 F.
2nd 1015 (1979).

     In a ruling dated November 8, 1982 (067999), copy enclosed,
we ruled that certain articles of wearing apparel exported to
Canada for the imprinting of designs or lettering by the
silkscreen method would not be eligible for tariff treatment
under the alterations provision when returned to the U.S.  The
printing of words or designs was considered to create a different
article of commerce offered for sale as a novelty item in
different markets and to different classes of buyers.  Moreover,
the printing operation was the final step in the manufacture of a
printed garment ready for marketing as a novelty item and,
therefore, exceeded an alteration.

     Cotton woven underwear shorts printed in Canada are
classifiable under the provision for men's underpants, briefs,
of cotton in subheading 6207.11.00, HTSUS, with duty at the rate
of 5.8 percent ad valorem.

HOLDING:

     The provision for alterations made abroad in subheading
9802.00.50, HTSUS, does not apply in the case where U.S.-made
shorts are printed with designs or words in Canada and the
shorts would be classifiable under subheading 6207.11.00, HTSUS.

                               Sincerely,




                               John Durant, Director
                               Commercial Rulings Division

Enclosure