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HQ 554961


June 27, 1989

CLA-2 CO:R:C:V 554961 GRV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80, HTSUS

Mr. Robert E. Boehme
Bike Athletic Company
P.O. Box 666
Knoxville, Tennessee 37901

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to athletic supporters to be imported from Jamaica

Dear Mr. Boehme:

This is in response to your letters of March 18, 1988, and May 4, 1989, requesting a ruling on the applicability of subhead- ing 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) (formerly item 807.00, Tariff Schedules of the United States (TSUS)), to athletic supporters to be imported from Jamica after assembly and packaging operations. Samples of the components and packaging materials to be exported from the U.S. and the completed athletic supporter to be returned to the U.S. were submitted for examination. You also request advice concerning the proper tariff classification of the returned supporters. We regret the delay in responding to your request.

FACTS:

You state that U.S. knitted fabric, for use as pouch material, will be cut to length and width in the U.S. before it is sent to Jamaica for assembly operations. In addition, rolls of U.S. elastic in various widths, comprising the waistband, leg straps and pouch reinforcement, and U.S. thread and labels, will be shipped to the assembly facility in Jamaica. The foreign processing consists of cutting the various rolls of elastic to length, forming the pouch by partially sewing the knitted fabric to itself (which gathers the fabric), attaching the pouch and the reinforcing elastic to the waistband and adding the leg straps and a label by sewing operations.

ISSUE:

Whether the athletic supporters will be entitled to the partial duty exemption provided for under HTSUS subheading 9802.00.80 when returned to the U.S.

LAW & ANALYSIS:

Effective January 1, 1989, the HTSUS superseded and re- placed the TSUS. TSUS item 807.00 was carried over into the HTSUS without change as subheading 9802.00.80. This tariff provision 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.

An article entered under HTSUS subheading 9802.00.80 is subject to duty upon the full value of the imported assembled article less the cost or value of such U.S. components, 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)), provides, in part, that:

[t]he components must be in condition ready for assembly without further fabrication at the time of their exporta- tion 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(b)(6), Customs Regulations (19 CFR 10.16(b)(6)), states that the cutting to length of wire, thread, tape, foil, and similar products exported in continuous length is an example of an operation incidental to the assembly process.

In the instant case, we are satisfied from the description of the foreign assembly operations and the samples submitted that the U.S. components to be sent to Jamaica will be entitled to the duty exemption available under HTSUS subheading 9802.00.80, upon return of the assembled supporters. The forming of the pouch by partially sewing the fabric to itself is considered an acceptable assembly operation involving two separate components -- the fabric and thread. See L'Eggs Products, Inc. Inc. v. United States, 13 CIT ___, 704 F.Supp. 1127 (1988). The cutting to length of the rolls of elastic comprising the waistband, pouch
reinforcement, and legs straps is considered an operation incidental to the assembly process pursuant to 19 CFR 10.16(b)(6). Moreover, sewing the various components together clearly is an acceptable means of assembly. See 19 CFR 10.16(a).

The cardboard box of U.S. origin into which each supporter is packaged is entitled to duty-free entry under subheading 9801.00.10, HTSUS, as the sample box submitted evidences that it is not advanced in value or improved in condition while abroad. See Headquarters Ruling Letter 731420 (November 18, 1988).

On the basis of the completed sample submitted, it is our opinion that the athletic supporters are properly classifiable in subheading 6212.90.0010, HTSUS, with duty at the rate of 7 percent ad valorem. The applicable textile category number is 359.

HOLDING:

On the basis of the described assembly operations and after examining the samples submitted, the athletic supporters will be entitled to the partial duty exemption under HTSUS subheading 9802.00.80 when returned to the U.S., upon compliance with the applicable Customs regulations (19 CFR 10.11-10.24). Allowances in duty may be made under this tariff provision for the cost or value of the U.S. fabricated components to be sent abroad, including the knitted pouch material, the elastic pouch reinforcement, waistband, and leg straps, and the thread and label. The packaging material will be duty free under subheading 9801.00.10, HTSUS. The supporters are classifiable in subheading 6212.90.0010, HTSUS.

Sincerely,

John Durant, Director

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