HQ 555296: Applicability of subheadings 9801.00.10 and 9802.00.50, HTSUS, to certain twine dispensers imported from Canada

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 555296


                                    June 16, 1989


          CLA-2  CO:R:C:V 555296 DBI

          CATEGORY:  Classification

          TARIFF NO.:  9801.00.10, HTSUS; 9802.00.50, HTSUS

          Mr. William J. LeClair
          Trans-Border Customs Services
          One Trans-Border Drive
          P.O. Box 800
          Champlain, New York 12919

          RE:   Applicability of subheadings 9801.00.10 and 9802.00.50,
                HTSUS, to certain twine dispensers imported from Canada

          Dear Mr. LeClair:

                This is in response to your letter dated January 24, 1989,
          to the Customs office in Champlain, New York, in which you
          request a ruling concerning the applicability of item 800.00,
          Tariff Schedules of the United States (TSUS), to certain twine
          shipped to Canada to be rewound, inserted into plastic dispensers
          and returned.  Your letter has been referred to this office for a
          response.

          FACTS:

                You advise that your client, Stanbel Limited, will ship
          U.S.-origin twine in bulk on large cones to Canada where it will
          be cut to shorter lengths, rewound onto small cardboard tubes,
          and inserted into Canadian-made plastic dispensers.  The
          dispenser comes with a built-in knife blade to cut the twine.
          The dispenser with twine is then placed into a cardboard box.
          The instructions on the box do not describe the dispenser as
          being reusable and it does not appear to be reusable since it
          would be difficult to pry open, rewind with twine and reclose.

          ISSUE:

                Whether the described twine, when returned to the U.S.,
          will be eligible for the exemption from duty in subheading
          9801.00.00, Harmonized Tariff Schedule of the United States
          (HTSUS) (formerly item 800.00, TSUS), or the partial exemption
          from duty in subheading 9802.00.50, HTSUS (formerly 806.20,
          TSUS).














                                         -2-



          LAW AND ANALYSIS:

                As you know, the HTSUS replaced the TSUS, on January 1,
          1989.  Item 800.00, TSUS, was carried over into the HTSUS as
          subheading 9801.00.10, and item 806.20, TSUS, was carried over as
          subheading 9802.00.50.

                Subheading 9801.00.10, HTSUS, provides for the free entry
          of articles of U.S. origin which are exported and returned
          without having been advanced in value or improved in condition
          while abroad.

                Subheading 9802.00.50, HTSUS, provides for the assessment
          of duty on the value of repairs or alterations performed on
          articles returned to the U.S. after having been exported for that
          purpose.  However, the application of this tariff provision is
          precluded in circumstances where the operations performed abroad
          destroy the identity of the articles or create new or
          commercially different articles.  See A.F. Burstrom v. United
          States, 44 CCPA 27,  C.A.D. 631 (1957);  Guardian Industries
          Corporation v. United States, 3 CIT 9 (1982).

                We have previously held in a ruling dated September 10,
          1986 (HQ 554179), that U.S.-origin ribbon that was exported to
          Mexico to be cut to length, rewound onto spools and wrapped in
          plastic packaging was not eligible for item 800.00, TSUS,
          treatment as the cutting to shorter lengths improved the
          condition of the ribbon by making it ready for sale upon return
          to the U.S.  However, we held that since ribbon was exported and
          ribbon returned, the foreign processing may be considered an
          alteration under item 806.20, TSUS.  The imported ribbon was
          classified under item 806.20, TSUS, rather than 800.00, TSUS.

                The facts in the present case are similar to those in
          ruling 554179.  The twine is wound onto tubes and packaged in a
          dispenser.  The foreign processing operations performed abroad do
          not destroy the identity of the twine or create new or
          commercially different articles.  The twine that is returned is
          the same as that which is exported to Canada.  





















                                         -3-


          HOLDING:

                On the basis of the information submitted, it is our
          opinion that the foreign processing may be considered an
          alteration as that term is used in subheading 9802.00.50, HTSUS.
          Therefore, the returned twine packaged in dispensers is eligible
          for the partial duty exemption provided for in that tariff
          provision, upon compliance with section 10.8, Customs Regulations
          (19 CFR 10.8).  The cost or value of the alteration would include
          the value of the Canadian-made plastic dispensers pursuant to 19
          CFR 10.8(l).

                                     Sincerely,





                                     John Durant
                                     Director, Commercial
                                     Rulings Division