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HQ 555506

January 17, 1990

CLA-2 CO:R:CV:V 555506 BJO


TARIFF NO. 9802.00.80, HTSUS

Charles T. Beeching, Jr., Esq.
Bond, Schoeneck & King
One Lincoln Center
Syracuse, New York 13202-1355

RE: Eligibility of Chinaware imported from Canada for Reduced- Duty Treatment under Subheading 9802.00.80, HTSUS

Dear Mr. Beeching:

This is in response to your letter of September 15, 1989, on behalf of Syracuse China Corporation, in which you request a ruling that U.S.-produced china tableware to which a decal and glaze are applied in Canada are eligible for reduced-duty treatment under subheading 9802.00.80, Harmonized Tariff Schedule of the U.S. (HTSUS), when returned.


You state that producing the china involves five steps: (1) mixing of ceramic ingredients, including clay, flint, and alumina, (2) forming the material into tableware shapes, (3) firing the shapes under high temperatures in a kiln to form a "bisque," (4) application of a U.S.-produced decal decoration to the bisques by moistening the back of the decal and pressing it to the bisque, and (5) the application of a glaze to the bisque and firing the glazed bisque in a kiln. You state that the purpose of the glaze is to protect the body and the decal.

The first three steps (the formation of the bisques) will be performed in the U.S.; the last two will be performed in Canada. You state that the cost of applying and firing the glaze will represent not more than 3% of the manufacturing cost of the finished product.


Whether glazing and firing chinaware, after application of a decal, is an operation that is incidental to assembly for purposes of subheading 9802.00.80, HTSUS.


Articles assembled abroad in whole or in part of fabricated components the product of the U.S. qualify for the partial duty exemption of subheading 9802.00.80, HTSUS, if three conditions are met: (1) the U.S. products are exported in condition ready for assembly without further fabrication; (2) the U.S. products have not lost their physical identity in the assembled articles by change in form, shape, or otherwise; and (3) the U.S. products 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. Such articles are subject to a duty upon their full value, less the cost, or, if no charge is made, the value of the U.S. products.

In United States v. Mast Industries, Inc., 69 CCPA 47, 668 F.2d 501 (1981), the court, after review of the pertinent legislative history, determined that operations may be considered incidental to the assembly process if they are of a minor nature, and that Congress intended "a balancing of all relevant factors to ascertain whether an operation of a 'minor nature' is incidental to the assembly process." Mast at 53-54. In Mast, the court considered the following factors in its determination: (1) whether the cost of the operation relative to the cost of the affected component, and the time required by the operation relative to the time required for assembly of the whole article, were such that the operation may be considered minor, (2) whether the operations in question were necessary to the assembly process, and (3) whether the operations were so related to the assembly that they were logically performed during the assembly. Mast at 54.

Applying the Mast criteria here, we do not find that the glazing operation is of a minor nature, or incidental to assembly. In Mast, the court found that buttonholing and pocket slitting were operations incidental to the sewing of garment pieces into women's pants. The sewing of the garment pieces to form the two styles of women's pants took approximately 35 minutes and 36 minutes, while the buttonholing took 8 to 10 seconds for one style and 7 to 8 seconds for the other, and the pocket slitting took 15 to 20 seconds for one style and 30 seconds for the other. Mast at 49. The direct labor cost of assembly for the two styles was 1.36/1.40 colones, while the cost of buttonholing and pocket-slitting for each style was .0075 colones and .025 colones, respectively. Mast at 49-50. The assembly you describe involves only the moistening of a decal and pressing it to the U.S. produced bisque, while the operation you claim incidental to that assembly is the glazing of the bisque and firing in an oven. Although no data has been submitted, it does not appear based on your description of the process that the time required to glaze and fire the bisques compared to the time required to apply the decal is as insignificant as the time required for buttonholing and pocket slitting relative to the time of assembly in Mast. Nor does it appear that the cost of the glazing relative to the cost of applying the decal approaches the insignificance of the cost of buttonholing and pocket slitting relative to the cost of assembly in Mast. While the glazing operation may represent no more than 3 percent of the total manufacturing cost of the finished product, as you claim, you have not submitted data showing that the glazing cost is minor relative to the foreign assembly cost (the application of the decal), which is the meaningful comparison under Mast. For these reasons, we do not find that the glazing operation is "of a minor nature" for purposes of subheading 9802.00.80, HTSUS.

Nor do we find that the glazing process is incidental to the foreign assembly. It does not appear that glazing is necessary to the assembly, for, unlike the buttonholing and pocketslitting operations performed in Mast, glazing is not a prerequisite to other assembly steps. See Mast at 54. Finally, you do not claim that glazing is so related to the assembly that it is logically performed during the assembly. Glazing appears to involve different processes and equipment than moistening and applying the decal, again in contrast to the operations performed in Mast. See Mast at 54 ("Buttonholing and pocket slitting were closely related to the assembly process. Both involved taking needle and thread to fabric, as in the assembly process. Both were done with special sewing machines.").


Glazing and firing U.S.-produced chinaware, after application of a decal abroad, are not operations incidental to assembly for purposes of subheading 9802.00.80, HTSUS. Therefore, the chinaware will not be eligible for reduced duty treatment under that subheading when returned to the U.S.


John Durant, Director

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