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HQ 556234


December 13, 1991

CLA-2 CO:R:C:S 556234 DSN

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Salvador Beattie
Import Supervisor
Daniel B. Hastings Inc.
P.O. Box 673
Laredo, Texas 78042

RE: Applicability of partial duty exemtpion to dryer pads; assembly; 19 CFR 10.14; 19 CFR 10.16; 555205; 555650; L'Eggs Products

Dear Mr. Beattie:

This is in response to your letter of July 30, 1991, on behalf of Robert Thurman, Enterprises, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to dryer pads to be produced in Mexico from U.S.-origin components. You were advised of the tariff classification by letter of October 21, 1991.

FACTS:

According to your submission, U.S.-origin components will be sent to Mexico to be assembled into dryer pads for domestic and commercial clothes dryers. You state that U.S.-origin cloth material and vinyl strips are cut to shape and to length, respectively, in the U.S. In Mexico, the following processes take place:

1. a double ply of the pre-cut rectangular fabric is stitched so as to form pockets which will accomodate the vinyl strips;

2. the fabric is folded and hemmed and then folded and sewn and turned inside out; and

3. a back-up seam is sewn along the pockets for reinforcement, the vinyl strips are then inserted, and the pockets are sewn shut to prevent removal or misplacement of the strips.

ISSUE:

Whether the dryer pads qualify for the partial duty exemption available under subheading 9802.00.80, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:

[a]rticles 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.

All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision 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)), states in part that:

[t]he components must be in condition ready for assembly without further fabrication at the time of their exportation 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.

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operation 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.

Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operations. However, any significant process, operation
or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to that component. See, 19 CFR 10.16(c).

In the instant case, the operations that entail sewing the pre-cut U.S.-origin fabric to itself to form pockets and inserting the vinyl strips and sewing the pockets shut are considered acceptable assembly operations. See, 19 CFR 10.16(a); L'Eggs Products v. United States, Slip Op. 89-5, 13 CIT ___, 704 F. Supp. 1127 (CIT 1989), which held that sewing together the end of a pantyhose tube is considered an acceptable assembly operation as the thread serves as a joining agent by joining the tube to itself; and Headquarters Ruling Letters (HRLs) 555205 of August 25, 1989, and 555650 of August 8, 1990. Moreover, folding the fabric and turning it inside out during the assembly operation are considered to be operations incidental to assembly pursuant to 19 CFR 10.16(b)(5) and (7).

HOLDING:

On the basis of the information provided, it is our opinion that the operations performed abroad to create the dryer pads are considered proper assembly operations or operations incidental thereto. Therefore, the dryer pads may enter under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components therein, upon compliance with the documentary requirments of 19 CFR 10.24.

Sincerely,

John Durant, Director
Commercial Rulings Division

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