United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1997 NY Rulings > NY A87754 - NY A87808 > NY A87782

Previous Ruling Next Ruling
NY A87782

October 23, 1996

CLA-2-43:RR:NC:BCH 3:353 A87782


TARIFF NO.:9802.00.4040

Ms. Helen Duffy
Empire Shipping
Cargo Building 80
JFK International Airport
Jamaica, New York 11430

RE: The dutiable value of Raw Fur Skins of the U.S. sent abroad for dressing

Dear Ms. Duffy:

In your letter dated September 24, 1996, received in our office on September 30, 1996, you requested a binding classification ruling. Samples were submitted for examination with your request.

The submitted samples are stated to be a raw furskin before and after it has been subjected to the dressing operation abroad.

You state that raw furskins are of United States origin and are sent aboard for dressing. You go on to state the following -

" The term dressing in the fur industry describes the process used to make furskins suitable for manufacturing into garments. Most raw furskins have been scraped free of most adhering fatty tissue and dried. Raw furskins are unusable for manufacturing until they are dressed. The dressing process begins with rehydration in salt and wetting agent solution. The wet pelts are then fleshed free of the fascia (membrane) that remains on the raw skin by suitably trained technicians. The skins then undergo chemical treatments called pickling. Various acids or alum and salt may be used in this process. After pickling, the pelts are then oiled or greased so they remain soft after drying. The furskins are then drummed in sawdust for cleaning and finishing. They are also brushed and shaped by finishing workers".

It is your belief that cost of the raw skins plus the dressing costs represent the dutiable value of the imported dressed skin and that this is the case as these skins underwent a substantial transformation from raw skins classified in HTS 4301 to dressed skins in HTS 4302. Your letter also requested a ruling on the applicability of the partial duty exemption under subheading 9802.00.4040, HTSUSA, to the returned merchandise. This tariff provision provides for the assessment of duty on the value of repairs or alterations performed on articles sent abroad for that purpose. However, such treatment is precluded where the exported articles are incomplete for their intended use and the foreign processing is a necessary step in the preparation or manufacture of finished articles. Dolliff & Company, Inc. v. United States, 81 Cust. Ct. 1, C.D. 4755, 455 F.Supp. 618 (1978), aff'd, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1979).

As the raw skins in this case clearly are not complete for their intended use when exported for dressing, it is our opinion that the dressing operations exceed the meaning of the terms "repairs" and "alterations." Therefore, the returned dressed skins will not be eligible for reduced duty treatment under subheading 9802.00.4040, HTSUSA.

Also the dressing operations result in a substantial transformation which exceed the meaning of the terms "repairs or alterations". Section 10.14(b) provides that a "substantial transformation" occurs when, as a result of manufacturing processes, a new and different article emerges, having a distinctive name, character, or use, which is different than that originally possessed by the article or material before being subject to the manufacturing process. If the manufacturing or combining process is merely a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See, Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), 741 F.2d 1368 (1984). One of the factors used by the courts to determine whether there has been a change in character and use, is whether the processing transforms the article from a producer's good to a consumer's good. See Midwood Industries v. United States, 313 F. Supp. 951 (1970).

In the instant case, the raw furskin is a producer good which is subjected to a manufacturing process abroad which includes rehydration, fleshing, pickling, oiling and greasing. The finished product has a character and commercial identity distinct from the raw material from which it was produced, and has been transformed by the foreign processing to a consumer good, ready to be assembled with other components to create a garment. As a result, the raw fur skin has undergone a substantial transformation and therefore is considered a fabricated product of the country where the dressing operations took place.

As the raw skins in this case are clearly not complete for their intended use when exported, and have undergone a substantial transformation from HTS 4301 to HTS 4302, it is our opinion that the dressing operations exceed the meaning of the terms "repairs" and "alterations." Therefore, the returned dressed skins will not be eligible for reduced duty treatment under subheading 9802.00.4040, HTSUSA.

The dutiable value of the imported dressed furskins is represented by the full value of the raw fur skins plus the dressing costs.

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 Martin Weiss at 212-466-5881.


Roger J. Silvestri

Previous Ruling Next Ruling

See also: