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HQ 731419


August 29, 1988

CLA-2 CO:R:C:V 713419 DBI

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80; 807.00

Robert S. Smith, Esq.
McGuire, Woods, Battle and Boothe
1627 Eye Street, NW.
Washington, DC 20006

RE: Certain roofing and waterproofing sheets

Dear Mr. Smith:

This is in response to your letter of May 4, 1988, seeking, on behalf of Dermabit Waterproofing Industries, Inc., a reconsideration of the applicability of item 807.00, Tariff Schedules of the United States (TSUS), to certain roofing and waterproofing sheets that your client proposes to assemble in Saudi Arabia.

FACTS:

Your letter and the letter of your client, Mr. R.G. Hofmann, Managing Director of Dermabit, dated November 12, 1986, revealed that a polyester fabric will be shipped to Saudi Arabia. There, it will be impregnated and coated with a mixture of 75% bitumen and 25% polypropylene atactic thermoplastic resin (asphalt). Immediately after the joining process, the asphalt sheet will be cooled to a solid state. Finally, the finished product (roofing membrane) will be imported into the U.S.

ISSUE:

Whether the roofing sheets, when returned to the U.S., will be eligible for the partial duty exemption in item 807.00, TSUS, (9802.00.80, Harmonized Tariff Schedule of the United States

LAW AND ANALYSIS:

Item 807.00, TSUS, applies to articles assembled abroad in whole or in part of fabricated components, the products 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 item 807.00, TSUS, 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(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operations performed abroad may consist of any method used to join or fit together solid components, such as gluing or sewing and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in paragraph (b) of that section.

In our ruling on this matter dated March 20, 1987 (HQ 554502), we stated that the coating of the fabric with a liquid mixture did not constitute the joinder of two or more solid fabricated components necessary to make an eligible assembly under item 807.00, TSUS.

In your present letter, you state that this reasoning is contrary to relevant court decisions; specifically, C.J. Tower and Sons of Buffalo, Inc. v. United States, 304 F. Supp. 1187 (Cust. Ct. 1969) and Sigma Instruments, Inc. v. United States, 724 F.2d 930, 931 (Fed. Cir. 1983). You state that the facts in these cases were analogous to the facts in your case, and, therefore, the reasoning in these cases should apply as well.

After careful consideration of this matter, we are of the opinion that the applicability of the Sigma and C.J. Tower cases to the factual situation presented in your request is negligible. Reliance on these cases for the proposition that the joining of two solids that were initially in a molten or viscous form is a permissible item 807.00, TSUS, assembly, may be well founded, but it does not advance any inconsistencies with our prior ruling.

In the present circumstances, the polyester fabric is being coated with the polypropylene to form a waterproof roofing product. A coating operation is not analogous to the extrusion and lamination process described in C.J. Tower. In that case, a viscous plastic mass was extruded over a solid plastic sheet, the molten mass solidifying upon contact. This was a lamination, a joining or coming together of solid components, each with its own separate identity, with an adhesive in between, resulting in two separate fabricated components joined together upon contact. The court emphasized the term "assemble" as the joining or coming together of solids. This is not analogous to coating a polyester sheet with polypropylene to form a waterproof layer over the polyester. The court, in holding that a component need not be a solid at the instant of contact, did not eliminate the requirement that there must be at least two separate fabricated components assembled together.

In a previous ruling dated June 12, 1985 (HQ 553450), we held that thermoplastic pellets reduced to a molten form and extruded over copper wire to form insulated wire, was not an acceptable assembly of two or more solid components under item 807.00, TSUS. Citing the Sigma case, we reasoned that the transfer molding process in Sigma constituted an assembly to the extent of rigidly fixing the several terminals in proper position in the newly formed headers; whereas adding insulation to wire only preserved or insulated the one component from the surrounding physical area. We found that the court, in holding that a component need not be solid at the instant of contact, did not eliminate the requirement that there must be at least two separate fabricated components assembled together. The embellishment of a single component by painting, plating, or coating was not sufficient to constitute an acceptable assembly. Merely bestowing a new characteristic on an exported component was not analogous to an assembly of terminals and the formation of headers as set out in the Sigma case.

In the present circumstances, the polyester fabric is being coated with the polypropylene (asphalt) in order to form a waterproof layer for roofing products. This coating process is more analogous to the wire insulation case than the processes in the C.J. Tower and Sigma cases. Therefore, for the reasons advanced above and in affirmance of our prior rulings on this point, we find this claim to be without significant merit.

During a meeting on August 11, 1988, you stated that the facts of this case are analogous to those in Carter Footwear, Inc. v. United States, 669 F.2d 439 (C.I.T. 1987). In Carter, the court held that molten plastic box toe that was joined to a shoe vamp in order to reinforce the toe was an acceptable assembly of two solid components under item 807.00, TSUS. The court reasoned that the application of the box toe did not further fabricate the vamp; it did not create the basic article.

In the present case, the polyester fabric is coated with the polypropylene and impregnated to the point where the polypropylene creates the waterproofing product. The polypropylene bestows a new characteristic on the polyester sheet, thereby further fabricating it to create the basic article.

HOLDING:

Based on the information submitted, we find your additional arguments to be without sufficient merit and we reaffirm our prior ruling denying your requested classification under the assembly provisions of item 807.00, TSUS.

Sincerely,

John Durant Director,

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