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NY D80508

July 28, 1998

CLA-2-58:RR:NC:TA:351 D80508


TARIFF NO.: 5807.90.2020

Mr. Ricky Villena

H.L.M. Intertrans Corp.

5567 Northwest 72nd Avenue

Miami, FL 33166

RE: The tariff classification of an emblem assembled in Honduras

Dear Mr. Villena:

In your letter dated July 16, 1998, you requested a classification ruling on behalf of T's Treasure Incorporated.

You submitted a sample of a Betty Boop emblem which you stated is composed entirely of materials of United States origin which is assembled in Honduras.

In your letter and in a subsequent telephone conversation you stated the manufacturing steps to be as follows:

1.) Scrim felt, a 20% wool and 80% rayon blend, is needled through open weave scrim and then dyed and starched

2.) The white and black scrim felt is die cut to shape

3.) The individual die cut pieces are screen printed with a background color and an outline for the chenille work

4.) Chenille embroidery, using 100% orlon yarn of U.S. origin, is applied to the designated areas

5.) The chenilled white felt piece is sewn to the black felt backing using a chain or straight stitch

6.) Each emblem is then hand decorated with glitter paint and inks

Processes numbered 1 through 4 are completed in the United States. The sewing together of the felt pieces and the hand decoration are done in Honduras.

You requested classification of the emblem upon its return to the U.S. from Honduras and asked if heading 9802 of the Harmonized Tariff Schedule is applicable.

The applicable subheading for the emblem will be 5810.92.1000, Harmonized Tariff Schedule of the United States (HTS), which provides for embroidery in the piece, in strips or in motifs: other embroidery of man-made fibers: badges, emblems and motifs. The rate of duty will be 6.7 percent ad valorem.

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

Articles...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.

It should be noted that all three requirements listed in subheading 9802.0080, HTS, must be satisfied before a component may receive the benefit of having its value exempted from duty.

Section 10.16(a) of the Customs Regulations (CR) provides that the assembly performed abroad may consist of any method used to join solid components together such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners. Operations that are incidental to the assembly process are not considered further fabrication as they are in general of a minor nature. Section 10.16(c) describes various operations that are not incidental to the assembly process and as such are a bar to consideration as a fabricated component eligible for duty exemption. Among the processes listed that are germane to this issue is "painting primarily intended to enhance the appearance of an article or to impart distinctive features or characteristics".

The foreign process which you described in your letter of hand decorating with glitter paint and inks falls within the exclusionary process described in Customs Regulations Section 10.16(c)(3). The emblem is not eligible for treatment under Heading 9802.

This ruling is being issued under the provisions 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 Camille R. Ferraro at 212-466-5885.


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