HQ 555238: Applicability of subheading 9802.00.80, HTSUS, to certain diskettes imported from Italy, Japan and Taiwan

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 555238
                                    March 8, 1989

          CLA-2  CO:R:C:V 555238  DBI

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.80, HTSUS

          Mr. Jack Ryan
          3M Center
          P.O. Box 33250
          St. Paul, Minnesota 55133-3250

          RE:   Applicability of subheading 9802.00.80, HTSUS, to certain
                diskettes imported from Italy, Japan and Taiwan

          Dear Mr. Ryan:

                This is in response to your letter dated January 6, 1989,
          in which you request a ruling concerning the applicability of
          subheading 9802.00.80, Harmonized Tariff Schedules of the United
          (HTSUS), to certain diskettes imported from Italy, Japan and
          Taiwan.

          FACTS:

                You advise that your company purchases computer diskettes,
          3.5 inches, 5.25 inches and 8 inches, from vendors in Italy,
          Japan and Taiwan.  The diskettes are made with magnetic media
          "cookies" which are manufactured in the U.S.  The cookies are
          sent to the vendors ready to be inserted into their shells or
          envelopes.  Before the cookies can be inserted, your company
          requires that the cookies undergo a burnishing process which
          polishes them and insures that the magnetic coating is smooth and
          free of any high spots.

                After burnishing, a hub of either metal or plastic is glued
          to the center perimeter of the cookie and the cookie is inserted
          into its shell or envelope.

                It is your position that the burnishing process is
          incidental to the assembly process.

          ISSUE:

                Whether the diskettes, when returned to the U.S., are
          eligible for the partial duty exemption in subheading 9802.00.80,
          Harmonized Tariff Schedule of the United States (HTSUS).
















                                         -2-


          LAW AND ANALYSIS:

                As you are probably aware, the HTSUS replaced the Tariff
          Schedules of the United States (TSUS), on January 1, 1989.  Item
          807.00, TSUS, was carried over into the HTSUS without change as
          subheading 9802.00.80.  This provision applies to articles
          assembled abroad in whole or in part of fabricated components,
          the product of the U.S., with no operations performed thereon
          except the attachment of the components to form the imported
          merchandise and operations incidental thereto.  An article
          classified under subheading 9802.00.80, HTSUS, 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 10.16(b),
          Customs Regulations (19 CFR 10.16(b)), provides that operations
          incidental to the assembly process whether performed before,
          during, or after assembly, do not constitute further fabrication,
          and shall not preclude the application of the exemption.

                Section 10.16(c), Customs Regulations (19 CFR 10.16(c)),
          provides that any significant process, operation, or treatment
          other than assembly whose primary purpose is the fabrication,
          completion, physical or chemical improvement of a component, or
          which is not related to the assembly process, whether or not it
          effects a substantial transformation of the article, shall not be
          regarded as incidental to the assembly and shall preclude the
          application of the exemption to such article. Section 10.16(c)(5)
          specifically lists burnishing as one of the operations,
          treatments or processes which imparts significant new
          characteristics or qualities to the article affected.  Thus, it
          is not considered incidental to assembly.

          HOLDING:

                On the basis of the information submitted, it is our
          opinion that the burnishing of the cookies is not an operation
          incidental to assembly, and, therefore, no allowances in duty may
          be made under subheading 9802.00.80, HTSUS, for the cost or value
          of the magnetic media cookie.

                                     Sincerely,





                                     John Durant
                                     Director, Commercial
                                     Rulings Division