HQ 555327: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to scrub tops to be imported from Mexico

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 555327

                                    June 16, 1989

          CLA-2 CO:R:C:V 555327 GRV

          CATEGORY:  CLASSIFICATION

          TARIFF NO.:  9802.00.80, HTSUS

          Mr. Ken W. Read
          Baxter Healthcare Corporation
          Convertors Operation
          One Butterfield Trail
          El Paso, Texas  79906

          RE:  Applicability of partial duty exemption under HTSUS subhead-
               ing 9802.00.80 to scrub tops to be imported from Mexico

          Dear Mr. Read:

                This is in response to your letter of February 9, 1989,
          requesting a ruling on the applicability of subheading
          9802.00.80, Harmonized Tariff Schedule of the United States
          (HTSUS), to scrub tops to be imported from Mexico after assembly
          operations.  Samples of the component materials to be exported
          from the U.S. and the scrub tops to be returned to the U.S. were
          submitted for examination.

          FACTS:

                You state that a reinforced paper material known as
          "Sontara" is manufactured in the U.S.  From this material, two
          components--the body of the top and a pocket--will be cut to
          shape in the making of scrub tops, commonly used as wearing
          apparel by hospital operating room personnel for the scrub
          (washing) phase prior to entering an operating room.  These two
          components will be exported in bulk on pallets, as will U.S.
          thread in spool form, to Mexico for assembly operations.  The
          assembly operations will consist of sewing the thread onto the
          sides of the top, turning the material right side out, and sewing
          the pocket onto the front of the body.  The assembled scrub tops
          are then packaged for return to the U.S.

          ISSUE:

                Whether the scrub tops will be entitled to the partial duty
          exemption provided for under HTSUS subheading 9802.00.80 when
          returned to the U.S.

          LAW & ANALYSIS:

                HTSUS subheading 9802.00.80 provides a partial duty
          exemption for articles:











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                ...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.

          An article entered under HTSUS subheading 9802.00.80 is subject
          to duty upon the full value of the imported assembled article
          less the cost or value of such U.S. components, upon compliance
          with the documentary requirements of section 10.24, Customs
          Regulations (19 CFR 10.24).

                Section 10.14(a), Customs Regulations (19 CFR 10.14(a)),
          provides, in part, that:

                [t]he components must be in condition ready for assembly
                without further fabrication at the time of their exporta-
                tion from the United States to qualify for the exemption.
                Components will not lose their entitlement to the exemption
                by being subjected to operations incidental to the assembly
                either before, during, or after their assembly with other
                components.  Materials undefined in final dimensions and
                shapes, which are cut into specific shapes or patterns
                abroad are not considered fabricated components.

                Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
          provides, in part, that:

                [t]he assembly operations performed abroad may consist of
                any method used to join or fit together solid components,
                such as welding, soldering, riveting, force fitting,
                gluing, laminating, sewing, or the use of fasteners....

                Section 10.16(b), Customs Regulations (19 CFR 10.16(b)),
          interprets the statutory phrase "operations incidental to the
          assembly process," and states in example (6) that the cutting to
          length of certain products (including thread) exported in contin-
          uous length is an operation incidental to the assembly process.

                In the instant case, the description of the foreign assem-
          bly operation and an examination of the samples submitted show
          that the scrub tops are eligible for the partial duty exemption
          available under HTSUS subheading 9802.00.80.  In the U.S., the
          two "Sontara" components are cut to shape and exported in bulk on
          pallets; the thread is exported in continuous length on spools.
          In Mexico, the sides of the top component are merely sewn











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          together, and the pocket component is sewn onto the top after the
          top is turned right side out.  The two "Sontara" components and
          the thread component fully meet the requirements of 19 CFR 10.14
          for fabricated components subject to the exemption.  See, L'Eggs
          Products, Inc., v. United States, 13 CIT ___, 704 F.Supp. 1127
          (CIT 1989).  Cutting the thread component is a permissible inci-
          dental operation under 19 CFR 10.16(b), and sewing is specifi-
          cally enumerated as an acceptable assembly operation in 19 CFR
          10.16(a).  An examination of the sample submitted shows that the
          "Sontara" material and thread do not lose their physical identity
          in the assembly operation, and that they are not advanced in
          value or improved in condition except by assembly or operations
          incidental to the assembly operations.

          CONCLUSION:

                On the basis of the described assembly operation, and after
          examining the samples submitted, the scrub tops will be eligible
          for the partial duty exemption available under HTSUS subheading
          9802.00.80 when returned to the U.S., upon compliance with the
          requirements of 19 CFR 10.24.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division