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HQ 557347


June 10, 1993

CLA-2 CO:R:C:S 557347 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Ed Corbett
Phone Guard, Inc.
120 Camelia Court
Oldsmar, Florida 34677

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to telephone handset covers; sewing; L'Eggs.

Dear Mr. Corbett:

This is in response to your letter of May 11, 1993, requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to telephone handset covers. Samples were submitted with your request.

FACTS:

In your letter, you state that you are planning to manufacture telephone handset covers which are disposable sanitary sleeves that fit over a telephone handset and protect a person from dirt and grime that can accumulate on the ear and mouthpiece. U.S.-origin synthetic fabric will be cut to shape in the U.S. and sent, along with elastic bands (also manufactured in the U.S.), to a foreign country. (From the sample, it appears that the fabric which forms the telephone handset cover is rectangular in size and approximately 12 inches long and 8 1/2 inches wide.) The elastic band will be sewn to the mid-section of a cut fabric piece, which gathers the fabric so that it will securely remain on the handset between the ear and mouthpiece. The cut fabric will then be sewn (evidently to itself) to form a telephone handset cover. The telephone handset covers will then be packaged three to a plastic packet, which will be boxed and returned to the U.S.

ISSUE:

Whether the telephone handset covers will qualify for the partial duty exemption available under subheading 9802.00.80, HTSUS, when returned to the United States.

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 cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, 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, lamination, 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. See 19 CFR 10.16(a). 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 first operation of sewing the elastic band onto the fabric is considered an acceptable assembly operation pursuant to 19 CFR 10.16(a), because two solid components are being joined (i.e., sewn) together. The second operation that entails sewing the fabric to itself to form a telephone handset cover is also considered an acceptable assembly operation. See, L'Eggs Products Inc. v. United States, 704 F. Supp. 1127 (CIT 1989), which held that sewing together the end of a pantyhose tube is considered an acceptable assembly operation because the thread itself is a component which serves as a joining agent by joining the tube to itself. Packing the telephone handset covers is permissible pursuant to 19 CFR 10.16(f).

HOLDING:

On the basis of the information and samples submitted, it is our opinion that the operations performed abroad to create the telephone handset covers are considered proper assembly operations. Therefore, the telephone handset covers may enter the U.S. under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components therein, provided the documentary requirements of 19 CFR 10.24 are satisfied.

Sincerely,

John Durant, Director

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