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NY D85361

December 31, 1998

CLA-2-98:RR:NC:3:353 D85361


TARIFF NO.: 9802.00.50

Mr. Donald S. Stein
Manatt, Phelps & Phillips, LLP
1501 M Street N.W.
Washington, DC 20005-1702

RE: Eligibility under 9802.00.50 of crust leather from Argentina.

Dear Mr. Stein:

In your letter dated December 1, 1998, on behalf Lackawanna Leather Company, you requested a determination regarding tariff classification under 9802.00.50.

The merchandise in question is U.S. origin raw hides which will undergo salt preservation in the United States and will be sent to Argentina for further processing. In Argentina, the tannery will process the hides to the crust stage and send them back to the United States. In the U.S., the crust leather will be processed into a finished leather product. For purposes of this response we assume the hides are from a bovine animal. The raw hides would be classified under heading 4101; the crust hides are considered crust leather and would be classified under heading 4104.

You request a ruling as to the eligibility for a partial duty exemption under 9802.00.50, Harmonized Tariff Schedule of the United States (HTS), which provides for "Articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means: Articles exported for repairs or alterations: Other."

Subheading 9802.00.50, HTSUS, provides a partial duty exemption for articles returned to the United States after having been exported to be advanced in value or improved in condition by means of repairs or alterations. Entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. Tariff treatment under subheading 9802.00.50, HTSUS, is also precluded where the exported articles are incomplete for their intended use prior to the foreign processing. The processing makes crust leather of raw hides. Furthermore, the raw hides cannot be used as leather prior to the processing in Argentina. The tanning process in question clearly creates a new and commercially different article and the article is incomplete for its intended use prior to such processing.

Raw hides shipped from the United States to Argentina where they are processed into crust leather are not eligible for treatment under 9802.00.50. The crust leather will be dutiable at full value when imported into the United States.

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 Kenneth Reidlinger at 212-466-5881.


Robert B. Swierupski

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