HQ 554878: Applicability of partial duty exemption tariff provision to certain bags for cameras and audio cassettes

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 554878

                                    March 7, 1988


          CLA-2 CO:R:C:V  554878 CW

          CATEGORY:  CLASSIFICATION

          TARIFF NO.:  9802.00.80, HTS (807.00, TSUS)

          Leslie A. Glick, Esq.
          Duncan, Allen and Mitchell
          1575 Eye Street, NW.
          Washington, D.C. 20005

          RE:  Applicability of partial duty exemption tariff provision
          to certain bags for cameras and audio cassettes

          Dear Mr. Glick:

               This is in response to your letter of December 17, 1987, in
          which you request a ruling on behalf of Service Manufacturing
          Corporation concerning the applicability of item 807.00, Tariff
          Schedules of the United States (TSUS), to certain plastic bags
          for cameras and audio cassettes that will be imported by your
          client from Mexico.  Samples have been submitted for examination.

          FACTS:

               You state that the two basic styles of bags or carrying
          cases to be imported by your client, a camera bag and an audio
          cassette bag, will be assembled in Mexico from U.S. fabricated
          components.  According to your letter, the camera bag will
          consist of eleven basic components which will be shipped by your
          client to Mexico ready for assembly by sewing.  Five of the
          components, referred to as the gusset, front piece, front pocket,
          side pockets and back piece, will be manufactured in the United
          States from fabric of foreign or United States origin and from
          foam backing or lining of United States origin.  The manufacture
          will be accomplished by taking fabric from large rolls, die
          cutting it to length and width and into patterns, and then
          laminating the fabric pieces by heat treatment to foam backing or
          lining.

               The binding for the cassette bag also will be made from
          foreign or domestic fabric by cutting the fabric to width in the
          United States.  We understand that the remaining components,
          referred to as the shoulder strap and buckle, side strap and















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          buckle, front strap and snap hook, velcro pieces, and welting,
          will be made exclusively from U.S. materials.  The straps, velcro
          and welting will be shipped to Mexico in bulk rolls where they
          will be cut to appropriate lengths prior to being sewn onto the
          bags in Mexico.

               The cassette carrying case will consist of five components,
          referred to as the cover, zipper piece, handle, decorative
          webbing and binding, which will be sewn together in Mexico.
          The cover will be manufactured in the United States by die
          cutting domestic or foreign fabric to length and width and into
          patterns, and by laminating the resulting fabric pieces by heat
          treatment to foam backing of U.S. origin.

               The three components making up the zipper piece (two strips
          of material and a zipper) will be shipped to Mexico in rolls,
          assembled, cut to length, and then sewn together to form the
          completed zipper piece.  The two strips of material will be made
          in the U.S. by cutting to width foreign or domestic material, and
          then laminating the strips to foam backing of U.S. origin.

               We understand that the zipper, the decorative webbing, and
          the handle will be made from domestic materials only.  As with
          the camera bag, the binding for the cassette bag will be produced
          in the United States by cutting domestic or foreign fabric to
          width prior to being shipped to Mexico for sewing onto the bags.

          ISSUE:

               Whether the described bags will be eligible for the partial
          exemption from duty provided for in item 807.00, TSUS (subheading
          9802.00.80, Harmonized Tariff Schedule of the United States
          (HTS)).

          LAW AND ANALYSIS:

               Item 807.00, TSUS, applies to articles assembled abroad in
          whole or in part of fabricated components, the product of the
          United States, with no operations performed thereon except the
          attachment of the components to form the imported merchandise and
          operations incidental thereto.  An article classified under item
          807.00, TSUS, is subject to duty upon the full appraised value of
          the imported article, less the cost or value of such products of
          the U.S.

               Section 10.14(b) of the Customs Regulations (19 CFR
          10.14(b)), provides that foreign-made articles or materials may
          become products of the U.S. for purposes of item 807.00, TSUS, if
          they undergo a process of manufacture in the U.S. which results













                                        - 3 -

          in their substantial transformation.  According to this
          provision, a substantial transformation occurs when, as a result
          of manufacturing processes, a new and different article emerges,
          having a distinctive name, character, or use which is different
          from that originally possessed by the article or material.  The
          process of die cutting foreign-made fabric to size and patterns
          and laminating the resulting pieces to foam backing or lining
          clearly results in a substantial transformation of the imported
          fabric into domestic products within the contemplation of item
          807.00, TSUS.  A substantial transformation in the U.S. also
          occurs when foreign-made fabric is cut to widths and the
          resulting strips are laminated to foam backing or lining.
          However, in regard to the binding for both types of bags, the
          mere cutting of foreign fabric to width does not substantially
          transform the imported fabric into a product of the U.S. for
          purposes of item 807.00, TSUS.

              The cutting to length in Mexico of the straps, welting,
          velcro, and zipper pieces are operations considered incidental to
          the foreign assembly process (see section 10.14(a), Customs
          Regulations (19 CFR 10.14(a))).

          HOLDING:

               On the basis of the samples and information submitted,
          allowances in duty may be made under item 807.00, TSUS, for the
          cost or value of the described U.S. fabricated components that
          are exported to Mexico and assembled into the imported camera and
          cassette bags, upon compliance with the applicable Customs
          Regulations (19 CFR 10.11-10.24).  No allowance may be made under
          item 807.00, TSUS, for the cost or value of the binding that is
          made in the U.S. from foreign-made fabric.

                                     Sincerely,




                                     John Durant
                                     Acting Director, Commercial
                                     Rulings Division