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HQ 555394

August 15, 1989

CLA-2 CO:R:C:V 555394 GRV


TARIFF NO.: 9802.00.80, HTSUS

Jeffrey A. Meeks, Esq.
Adduci, Mastriani, Meeks & Schill
551 Fifth Avenue
New York, New York 10176

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to certain non-woven fabric vanes to be imported from Taiwan or Thailand.Mast Industries, Inc. (1981);554920;L'Eggs Products, Inc., (1989).

Dear Mr. Meeks:

This is in response to your letters of May 12 and July 28, 1989, on behalf of Window Concepts, Inc., requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to certain non-woven fabric vanes to be imported from Taiwan or Thailand for use as part of vertical window and door blind systems A sample of a finished vane to be imported was submitted for examination.


You state that U.S.-made, non-woven fabric vanes, measuring 3 1/2 inches in width, will be exported in rolls of various lengths to Taiwan or Thailand for processing operations consist- ing of:

(1) measuring and cutting the rolled fabric to the length required for the particular window blind system; (2) creating pockets at both ends of the cut vane, by fold- ing the ends of the fabric material over and sewing a 3/4 inch hem at the top and a 2 1/8 inch hem at the bottom. (In this regard, you state that the upper pocket produced is for the insertion, by the assembler, of a plastic hanger card with a hole in it correspond- ing to a hole to be subsequently punched in the pocket, whereas the lower pocket produced is for the insertion, by the consumer, of stabilizing weights.); (3) punching a 1/2 inch hole in the upper pocket for receipt of a plastic hanger insert which also has a hole punched in it; and,
(4) upon inserting the plastic card and aligning the hole in the insert card with the 1/2 inch hole punched in the upper pocket, the relative position of the plastic insert card is fixed by gluing each end of the pocket to ensure that the card insert will remain properly aligned in the pocket.

The fabric vanes are then packaged with an aluminum head- rail and a nylon cord weight to complete the window blind system and returned to the U.S.

You maintain that the hole-punching step satisfies the criteria set forth in United States v. Mast Industries, Inc., 1 CIT 188, 515 F.Supp. 43 (1981), aff'd, 69 CCPA 47, 668 F.2d 501 (1981), for determining whether an operation is incidental to the assembly process. In this regard, you state that this step: (1) takes only a fraction of a second, and costs very little in relation to the cost of the overall assembly operation; (2) is necessary for the assembly of the PVC hanger card with the vane, as without corresponding holes in the vane and card, the vanes could not be attached to the aluminum headrail; and (3) is so related to the assembly operation that it can only be logically performed after the sewing step, but prior to the assembly of the PVC hanger card with the vane, so that the holes in both can be aligned.


Whether the returned fabric vanes are entitled to the partial duty exemption under HTSUS subheading 9802.00.80.


HTSUS subheading 9802.00.80 provides a partial duty exemp- tion for:

[a]rticles assembled abroad in whole or in part of fab- ricated 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.

All three requirements of HTSUS subheading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to a duty upon the full value of the imported assembled article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentation requirements of section 10.24, Customs Regulations (19 CFR 10.24). Assembly operations for purposes of HTSUS subheading 9802.00.80 are interpreted at section 10.16(a), Customs Regulations (19 CFR 10.16(a)), which specifically emunerates sewing and gluing as acceptable means of assembly. Further, this section provides that assembly operations may be preceded, accompanied, or followed by operations incidental to the assembly.

Operations incidental to the assembly process are not considered further fabrication, as they are of a minor nature and cannot always be provided for in advance of the assembly operation. Examples of operations considered incidental to the assembly process are delineated at section 10.16(b), Customs Regulations (19 CFR 10.16(b)), which specifically emunerates cutting to length of finished components exported in continuous lengths. When a particular operation is employed that is not specifically enumerated in the regulation, application of the criteria specified by the court in United States v. Mast Industries, Inc., 668 F.2d at 506, is appropriate.

In the Mast case, the court considered the legislative history of the phrase "incidental to the assembly process," and found that Congress intended a balancing of all relevant factors to ascertain whether an operation of a "minor nature" was inci- dental to the assembly process. The court stated that relevant factors included:

(1) whether the relative cost of the operation and time required by the operator were such that the operation may be considered "minor;"
(2) whether the operation is necessary to the assembly process;
(3) whether the operation is so related to assembly that it is logically performed during assembly; and, (4) whether economic or other practical considerations dictate that the operations be performed concurrently with assembly.

In Headquarter Ruling Letter (HRL) 554920 (January 3, 1989), a vertical blinds case involving similar facts, we stated that because the plastic hanger to be inserted into the hemmed end of the fabric would not be permanently fixed by the assembly process, but would be removable, no allowance could be made for the value of the plastic hanger under HTSUS subheading 9802.00.80, as no assembly operation occurred. Further, as this aspect of the foreign operation did not constitute an assembly operation, the hole-punching at that end of the fabric was clearly not an operation incidental to assembly and no allowance in duty could be made for the value of the fabric when returned to the U.S.
The instant case differs from the above-referenced ruling in that the position of the plastic hanger in this case is permanently fixed in relation to the upper pocket of the fabric by gluing each end of the pocket to ensure that the plastic insert card remains properly aligned with the hole punched in the top pocket. Thus, a valid assembly operation is performed and this may render the hole-punching in this case an operation inci- dental to the assembly process, if it is found to be a minor operation as determined by application of the Mast criteria.

In the instant case, the description of the foreign operation shows that the fabric vanes to be imported will be eligible for the partial duty exemption available under HTSUS subheading 9802.00.80. The non-woven fabric vanes are the product of the U.S. which are exported in rolls of continuous length. Once abroad, the fabric is cut to length--an acceptable incidental operation under section 10.16(b)(6)--and hemmed at both ends by sewing--an acceptable means of assembly under section 10.16(a). The joining of fabric to itself by sewing has been held to be an acceptable assembly operation for purposes of TSUS item 807.00. See, L'Eggs Products, Inc., v. United States, 13 CIT ___, 704 F.Supp. 1127 (1989). Applying the Mast criteria to the information provided, we believe the hole-punching in this case is a minor operation which falls within the meaning of an incidental operation. As stated above, permanently enclosing the plastic insert card in the top pocket of the fabric vane by gluing both ends of the pocket closed is an acceptable assembly. Further, an examination of the sample submitted shows that the non-woven fabric does not lose its physical identity in the assembly operation, and that it is not otherwise advanced in value or improved in condition except by assembly operations and operations incidental thereto. Cf., HRL 554920 (January 3, 1989).


On the basis of the described foreign operation and after examining the sample submitted, the non-woven fabric vanes will be eligible for the partial duty exemption under HTSUS subheading 9802.00.80 when returned to the U.S., upon compliance with the documentary requirements of 19 CFR 10.24.


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