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HQ 555559


April 20, 1990

CLA-2 CO:R:C:V 555559 KAC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9801.00.10

Leonard L. Rosenberg, Esq.
Sandler, Travis & Rosenberg, P.A.
Rivergate Plaza
444 Brickell Avenue
Miami, Florida 33131-2470

RE: Applicability of duty exemption under HTSUS subheading 9801.00.10 to contraceptive tablets to be imported from the Dominican Republic

Dear Mr. Rosenberg:

This is in response to your letter of January 2, 1990, on behalf of Ayerst-Wyeth Pharmaceutical Caribe, Inc., requesting a ruling on the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to contraceptive tablets to be imported from the Dominican Republic. Samples of the contraceptive tablets and packaging materials were submitted.

FACTS:

Ayerst-Wyeth will be shipping U.S. blister-packaged contraceptive tablets in 21 or 28 tablet quantities and all of the necessary packaging materials to the Dominican Republic for foreign operations. There will be four different variations to the foreign packaging operations performed on both the 21 and 28 tablet blister packs. The four types of packages are described as the three compact carton, six envelope refill carton, five compact dispenser carton, and clinic use pilpack dispenser carton. A description of the foreign operations performed in regard to the three compact carton, which is representative of all of the packaging operations, is as follows:

(1) inspecting the blister-packed contraceptive tablets for broken or missing tablets, legible print, and proper regime;
(2) opening the plastic compact and inserting the blister package;
(3) inserting three different informational pamphlets into the compact and then closing it;
(4) forming the printed cartons that hold the compacts;

(5) inserting three full compacts along with the Doctor's instruction pamphlet and then closing the printed carton;
(6) inspecting the printed carton for correct, legible print and embossing;
(7) forming the carton packer (plain white box without printing);
(8) inserting the printed carton into a carton packer; (9) forming the shipping carton; and
(10) packaging the carton packers into the shipping carton.

After the foreign packaging operations are completed the contraceptive tablets will be imported into the U.S.

ISSUE:

Whether the contraceptive tablets and packaging materials will qualify for the duty exemption available under HTSUS subheading 9801.00.10 when returned to the U.S.

LAW AND ANALYSIS:

HTSUS subheading 9801.00.10 provides for the free entry of U.S. products that are exported and returned without having been advanced in value or improved in condition by any means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. In United States v. John V. Carr & Sons, Inc., 69 Cust.Ct. 78, C.D. 4377, 347 F.Supp. 1390 (1972), 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), the court stated that absent some alteration or change in the item itself, the mere repackaging of the item even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified under item 800.00, Tariff Schedules of the United States (TSUS) (the precursor to subheading 9801.00.10, HTSUS).

In the instant case, we believe that the foreign operations performed in the Dominican Republic are simple packaging operations that do not advance in value or improve in condition the U.S. contraceptive tablets. Prior to export to the Dominican Republic, the blister packaged contraceptive tablets are fully prepared products. In the Dominican Republic, the contraceptive tablets are merely inserted into compacts or envelopes, various quantities of which are then placed into printed cartons, which, in turn, are placed into carton packers and shipping cartons for shipment to the U.S. Accordingly, as no aspect of the foreign packaging operations effects an alteration or change in the contraceptive tablets, they will be eligible for the duty exemption under HTSUS subheading 9801.00.10.

With respect to the dutiability of the U.S. packaging materials, General Rule of Interpretation 5(b), HTSUS, provides that:

...packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use.

Thus, as the envelopes and various types of cartons in which the contraceptive tablets are packed are of a kind normally used for packing such goods and are unsuitable for repetitive use, they are subject to the same duty rate as their contents, which in this case is a free rate under HTSUS subheading 9801.00.10. Because we understand that the U.S. plastic compacts are designed for repetitive use, they are separately classifiable from their contents. However, the compacts also are entitled to free entry under HTSUS subheading 9801.00.10 since they are U.S. products which are returned without having been advanced in value or improved in condition while abroad. See Headquarters Ruling Letter 731806 dated November 18, 1988.

HOLDING:

On the basis of the information and samples submitted, as the U.S. contraceptive tablets, compacts and other packaging materials will not be advanced in value or improved in condition abroad as a result of the foreign operations, they will qualify for the duty exemption under HTSUS subheading 9801.00.10, upon compliance with the documentary requirements of 19 CFR 10.1.

Sincerely,

Jerry Laderberg
Acting Director

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