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NY A83384

June 7, 1996

CLA-2-62:RR:NC:WA 360 A83384


TARIFF NO.: 9802.00.80

Mr. Miguel Ruiz
Miami International Forwarders
P.O. Box 523730
Miami, FL 33126-1013

RE: Applicability of the partial duty exemption under subheading 9802.00.80, HTSUS, to an embroidered women's blouse

Dear Mr. Ruiz:

In your letters dated March 22, and April 30, 1996, you requested a ruling on behalf of Vogue Originals, Inc. concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to an embroidery operation performed on the front panel of a women's woven blouse assembled in El Salvador. A sample of the merchandise was submitted for our review.

The submitted sample, identified as style v-polo - 5552, is a women's pullover blouse manufactured from 100% polyester woven fabric. The blouse has a partial neck opening secured by a one button closure, a shirt collar, long sleeves and ribbed knit fabric at the sleeves and waist. You state that the garment will be assembled in El Salvador by sewing USA fabricated components exported in a condition ready for assembly.

The embroidery process performed in El Salvador consists of the following operation:

(1) U.S.-origin thread is used to machine embroider the selected design onto two layers of components. The top layer will consist of a woven cut component. The bottom layer will consist of a suitable sized piece of pellon backing.

(2) The pellon backing that is not joined to the woven fabric by the thread is perforated during the embroidery process in such a way that this non-essential backing material is pulled off by hand or trimmed to within inch of the stitch line.

You question whether the embroidered shirt will be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, upon importation into the U.S.

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 inform, shape, or otherwise, and 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. 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, because the embroidery operation will be used to join the shirt components and the pellon backing together, it is an acceptable assembly operation within the meaning of subheading 9802.00.80, HTSUS, as in HRL 559107 dated June 20, 1995. Therefore, the shirt components and the thread will be eligible for the duty allowance under subheading 9802.00.80, HTSUS. However, the pellon backing is not eligible for the duty allowance under this tariff provision upon importation into the U.S. because nearly all of it is removed after the assembly operation. (Section 10.16(b)(4), Customs Regulations {19 CFR 10.16(b)(4)}, considers trimming, filing, or cutting off of small amounts of excess material to be incidental operations.)

On the basis of the information and sample submitted, the embroidery operation used to join the shirt components and the pellon backing together is considered an acceptable assembly operation. However, the removal of nearly all of the pellon backing is not incidental to the embroidery operation. Therefore, the woven blouses subjected to the embroidery operation may be entered under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components (except the pellon backing), provided the documentary requirements of 19 CFR 10.24 are satisfied.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patricia Schiazzano at (212)466-5866.


Roger J. Silvestri

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