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HQ 555883

June 13, 1991

CLA-2 CO:R:C:S 555883 RA


TARIFF NO.: 9801.00.10; 9802.00.80

Ms. Valerie Cauifieid
Vice President
Freight Brokers International Inc.
1200 Brunswick Avenue
Far Rockaway, New York 11691

RE: Duty exemption applicable to certain cosmetic compacts assembled and/or packaged in Mexico with U.S.-origin components

Dear Ms. Caulfield:

This is in response to your letter of January 16, 1991, to our New York office, requesting a ruling on behalf of Revlon Inc. concerning the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to certain cosmetic compacts to be imported into the U.S. from Mexico. Your letter was referred to this office for a reply.


Various components of U.S. origin are exported to Mexico for assembly and/or packaging operations to create rouge, face powder and eyeshadow compacts. With respect to the rouge compact, the foreign operations consist of pressing and gluing a filled make- up pan into a one-piece compact with mirror already attached. A plastic protective cover is then placed on top of the make-up, a brush applicator with plastic sleeve is placed inside the compact, and a label is affixed to the bottom. The compact is then packaged for shipment to the U.S.

The face powder compact is subjected to essentially the same operations in Mexico as the rouge compact, except that a foam applicator pad is placed inside the compact instead of a brush. The make-up pan for the eyeshadow compact is not glued but is pressed into the compact, a foam applicator brush is placed into the compact, and a label is affixed to the bottom before packaging.


Whether the imported compacts qualify for a duty exemption under subheading 9801.00.10 or 9802.00.80, HTSUS, when returned to the U.S.


Subheading 9801.00.10, HTSUS, provides for the duty-free entry of products made in the U.S. which are returned without having been advanced in value or improved in condition while abroad, provided the documentation requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. In United States v. John V. Carr & Sons, Inc., 69 Cust. Ct. 78, C.D. 4377, 347 F.Supp. 1390 (1972), aff'd 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), the court stated that absent some alteration or change in the item itself, the mere repacking of the item, even for retail sale, will not preclude free entry of the merchandise as American goods returned.

In the instant case, the attachment of the make-up pans to the three types of compacts by gluing or force fitting constitutes more than a mere packaging operation and, in our opinion, clearly advances the value and improves the condition of the merchandise- However, we believe that an allowance in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the one-piece compacts and make-up pans. This tariff provision provides a partial exemption from duty 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 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 subheading 9802.00.80, HTSUS, is subject to duty upon the full value of the imported assembled article less the cost or value of such components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24). Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), states that the assembly operations performed abroad may consist of any method used to join or fit together solid components, such as force fitting or gluing.

As the brush applicator, foam applicator pad and foam applicator brush are merely placed into the rouge, face powder and eyeshadow compacts, respectively, and therefore are not advanced in value or improved in condition, these components are entitled to duty-free treatment under subheading 9801.00.10, upon compliance with the documentation requirements of 19 CFR 10.1. Moreover, the packaging materials of U.S. origin, including the plastic protective covers, plastic sleeves, boxes and cartons are entitled to free entry under subheading 9801.00.10. See Headquarters Ruling Letter 731806 dated November 18, 1988.


Based on the information submitted, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin one-piece compacts and filled make-up pans that are joined together in Mexico by gluing or force fitting, assuming compliance with the documentation requirements of 19 CFR 10.24. Classification allowances also may be made under subheading 9801.00.10, HTSUS, for the cost or value of the foam or brush applicators and packaging materials of U.S. origin, provided the documentation requirements of 19 CFR 10.1 are satisfied.


John Durant, Director
Commercial Rulings Division

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