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HQ 085800


January 3, 1990

CLA-2 CO:R:C:G 085800 HP

CATEGORY: CLASSIFICATION

TARIFF NO.: 5811.00.2000; 9802.00.8000

Mr. John R. Dowd
General Manager
Contract Sales
MFI International, Inc.
P.O. Box 11010
El Paso, TX 79983

RE: Quilted assembly parts of handbags sewn together in layers are not a made up article, but are quilted piece goods. 9802.00.80; assembly;Mexico

Dear Mr. Dowd:

This is in reply to your letters of September 26, 1989, and September 28, 1989, concerning the tariff classification and eligibility for duty reduction of quilted assembly parts, produced in the United States and Mexico, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The merchandise at issue consists of quilted components intended for final assembly into handbags. Four components are cut to shape (roughly rectangular) in the United States and then exported to Mexico for assembly: (1) a 100% woven cotton print cloth; (2) a nonwoven man-made fiber interfacing; (3) foam; & (4) a woven 50% cotton / 50% polyester backing cloth.

The assembly in Mexico consists of sandwiching the four components together in the order listed above. The four components are then single-needle stitch-locked together (quilted) in a decorative sewing pattern determined by the type of print on the face cloth. In the submitted sample, the quilting thread is sewn in the shape of an equilateral parallelogram, of a contrasting color to the face cloth. Extensive quilting instructions have also been submitted. The cost of labor in Mexico to produce these panels ranges from 25/panel to 45/panel, depending on size. The panels are then returned, untrimmed, to the United States.

Once back in the United States, the panel is trimmed and combined with other components to form a handbag. The returned panels comprise the center portion of the completed handbags. The completed bags will have wholesale costs ranging from $7.50 to $60.00.
You have also requested we determine the classification of a strap included with your merchandise. From photographs submitted , it appears that this strap will be attached to the handbag and used as a carrying strap. In conversations with our New York office, however, you have stated that the strap will be manufactured entirely within the United States. As the straps apparently will not be exported or imported, there is no need to consider clas sification of this item.

ISSUE:

Whether the instant merchandise is considered quilted goods under heading 5811, or other made up articles under heading 6307, HTSUSA? Whether the instant merchandise is entitled to partial duty exemption under heading 9802.00.8000, HTSUSA?

LAW AND ANALYSIS:

Heading 5811, HTSUSA, provides for quilted textile products in the piece. The Explanatory Notes (EN) to the HTSUSA constitute the official interpretation of the tariff at the international level. The EN to this heading states that the heading covers:

(ii)two layers of fabric separated by a layer of padding.

The layers of material are usually held together with an adhesive or by ... stitching (including stitch-bonding) either with straight rows of stitches or by stitching in a decorative pattern, provided the stitches are used principally to quilt and not to decorate.

The heading does not cover:

(c)Made up goods of this Section (see Section Note 7).

Note 7 to Section XI, HTSUSA, provides, inter alia,

For the purposes of [Section XI], the expression "made up" means:

(e)Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded).... [Emphasis added.]
The EN to this Note aids our understanding of "made up" by stating that "textile products in the piece composed of one or more layers of textile materials assembled with padding by stitch ing or otherwise" are NOT regarded as made up. Based upon this, it is our opinion that the panels are classifiable as quilted piece goods of heading 5811.

HOLDING:

As a result of the foregoing, the instant merchandise is classified under subheading 5811.00.2000, HTSUSA, textile category 229, as quilted textile products in the piece, composed of one or more layers of textile materials assembled with padding by stitch ing or otherwise, other than embroidery of heading 5810, of cot ton.

Heading 9802.00.80, HTSUSA, provides 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. [Merchandise covered by this subheading was previously covered by item 807.00, Tariff Schedules of the United States (TSUS).]

All three requirements of HTSUSA heading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under HTSUSA heading 9802.00.80 is subject to a duty upon the full value of the imported article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentary requirements of section 10.24, Customs Regulations (19 C.F.R. 10.24).

It is our opinion that the instant merchandise clearly falls under the provisions of heading 9802.00.80. The U.S. components merely undergo an assembly process in Mexico; no further fabrica tion, advancement in value, or identity change takes place until the completed panels are once again within the United States. As a result, the applicable rate of duty is 7.2 percent ad valorem on the full value of the imported article, less the cost or value of such products of the United States.
The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the re straint (quota/visa) categories, you should contact your local Customs office prior to importing the merchandise to determine the current applicability of any import restraints or requirements.

Sincerely,

John Durant, Director
Commercial Rulings Division

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