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HQ 555595


May 21, 1990

CLA-2 CO:R:C:V 555595 LS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80, HTSUS

Mr. John Mayo McKeown
1809 Farragut Street
Laredo, Texas 78040-0871

RE: Applicability of partial duty exemption under subheading 9802.00.80, HTSUS, to leather-wrapped eyeglass temples and nylon sunglass frames

Dear Mr. McKeown:

This is in response to your letters dated November 30, 1989, and February 5, 1990, to Customs in Laredo, Texas, on behalf of Phoenix Assembly Corp., requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to two separate products -- leather-wrapped eyeglass temples and nylon sunglass frames. Samples were submitted for examination. Your letters were referred to this office for preparation of a response.

FACTS:

With respect to the leather-wrapped temples, Phoenix Assembly Corp. is planning to export to Mexico right and left temples, stitched leather, and acetone. The temples are made of metal, with the lower half encapsulated in a plastic material. The temples and acetone are of U.S. origin and the leather is of Canadian origin. A Mexican company will perform the following operations. The leather, which is already folded and stitched on one end when exported to Mexico on rolls, is cut to length and width. Glue is placed on the reverse side of the leather and activated with acetone. The leather is glued onto the plastic portion of the temple and any excess is removed by cutting. The lower part of the leather-covered portion of the temple is then bent so that the temple will fit behind the eyeglass wearer's ear. The temples will then be returned to the U.S., where they will be assembled with eyeglass frame fronts which have also been covered with leather in Mexico.

You have specifically asked us to address the issue of what effect the bending operation has on the temples' eligibility for a partial duty exemption under subheading 9802.00.80, HTSUS. You
also request a determination as to the country of origin of the eyeglass frames for marking purposes, assuming that the temples and frame fronts are leather-wrapped in Mexico and then assembled in the U.S. This will be the subject of a separate response.

With respect to the sunglass frames, Phoenix Assembly Corp. plans to export the nylon temples, nylon frame fronts, and metal hinge pins, all of U.S. origin, to Mexico. Prior to the assembly of the frame fronts and temples, the left and right temples will undergo the following operations. First, mold closure marks are removed by tracing the periphery of the temple with a hand grinder equipped with an abrasive wheel. Next, the areas where the marks were removed are polished by tracing the periphery of the temple with a hand grinder equipped with a felt wheel and polish rouge. Lastly, the registered trademark "Ray-Ban" is printed on the end of the left temple which will be attached to the frame front. This printing is achieved using a "TAMPO" transfer printing press. The temple is then placed in a temporary staging area to allow the ink to dry. The same procedure is followed on the right temple where the registered trademark "Cats" is printed.

The assembly operations will consist of the following steps. The metal hinge pin is inserted into the first half of the left temple by (1) placing the pin into the hole in the upper jaw of special hinge pin pliers; (2) placing the temple hinge over the lower jaw of the pliers ; and (3) squeezing the pliers shut. Next, the left temple is placed onto the hinge located on the left side of the frame front, and the final stage of the pin insertion is achieved using modified pliers. This same process is repeated for the right temple. The temples are then folded to check for the proper fit. The completed sunglass frame is visually inspected for defects, and then placed in a shipping container. The frames will then be shipped to Texas for insertion of the lenses.

You have also requested that we address the country of origin marking requirements for the sunglass frames. You inquire whether the frames, prior to insertion of the lenses in the U.S., will be entitled to a waiver of the marking requirements.

ISSUE:

(1) Whether the bent leather-wrapped temples will qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, when returned to the U.S.

(2) Whether the nylon sunglass frames will qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

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

[a]rticles 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.

All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under subheading 9802.00.80, HTSUS, is subject to duty upon the full value of the imported assembled article less the cost or value of the U.S. components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operation. Examples of operations considered incidental to the assembly process are delineated at section 10.16(b), Customs Regulations (19 CFR 10.16(b)). However, any significant process, operation, or treatment whose primary purpose is the fabrication, completion, or physical or chemical improvement of a component, or which is not related to the assembly process, precludes the application of the exemption under subheading 9802.00.80, HTSUS. See 19 CFR 10.16(c).

I. Leather-wrapped temples

The temples constitute "fabricated components, the product of the U.S.," as they are exported in a condition ready for assembly, within the meaning of clause (a) of subheading 9802.00.80, HTSUS. Assuming that the acetone is in a liquid form as exported, it does not qualify as a "fabricated component, the product of the U.S." The legislative history of subheading 9802.00.80, HTSUS, makes it clear that the exemption applies to U.S.-made fabricated components which are of types designed to be fitted together with other components, and does not apply to chemical products, food ingredients, liquids, gases, powders, etc. H.R. Rep. No. 342, 89th Cong., 1st Sess. 49 (1965). Therefore, the acetone is not eligible for the partial duty exemption under the statute.

The application of the leather onto the plastic covering of the temple is an acceptable assembly operation in accordance with 19 CFR 10.16(a). See Headquarters Ruling Letter 554908 dated December 22, 1988 (process of applying various adhesives to very thin pieces of foreign leather, gluing the leather to eyeglass frames, and skiving off excess leather constitutes an acceptable assembly operation for purposes of subheading 9802.00.80, HTSUS).

We next consider the specific issue raised, i.e., whether the curling or bending of the temple constitutes a "fabrication," as that term is used in 19 CFR 10.16(c), or an operation incidental to the assembly process. In Samsonite Corporation v. United States, 12 CIT ___, 702 F. Supp. 908 (1988), appeal docketed, No. 89-1346 (Fed. Cir. March 17, 1989), the court considered the issue of whether the bending of steel strip to form a luggage frame prior to the assembly of a luggage bag constituted a fabrication or an operation incidental to the assembly. The steel strips were bent by machine into a form analogous to a square-sided letter C and subjected to other operations prior to being assembled into the luggage bags. The court found that the bending process did more than "adjust" (19 CFR 10.16(b)(5)) the article, but rather created the component to be assembled, the essence of which was its configuration. The bending, which transformed the strip into a luggage frame, was found to be a "further fabrication."

Similarly, in the instant case we find that the bending of the temple after the assembly (i.e., application of leather onto temple) constitutes a "fabrication" or "completion" of the temple within the meaning of 19 CFR 10.16(c). The bending does not qualify as an operation incidental to the assembly process under 19 CFR 10.16(b)(5) since it does not constitute an adjustment "in the shape or form of a component to the extent required by the assembly being performed." See Samsonite. The bending here is more than an adjustment in shape or form and it is not required by the assembly. Instead, the primary purpose of the bending is the fabrication or completion of the temple. See 19 CFR 10.16(c). Further, the bending of the temple is "not related to the assembly process" (19 CFR 10.16(c)) by which the leather is wrapped around and glued to the plastic portion of the temple. See Surgikos, Inc. v. United States, Slip. Op. 88-35, 12 CIT ___ (1988) (in applying the criteria for operations incidental to the assembly process, the court found that fenestration and finish folding of surgical sheets were not related directly to the gluing process by which the sheets were assembled).

Since the U.S.-origin temples will be advanced in value or improved in condition by a bending process which is not an assembly operation or an operation incidental thereto, they will not be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS.

II. Nylon sunglass frames

We must first determine whether the sunglass frame fronts, temples, and metal hinge pins are exported in a condition ready for assembly without further fabrication (clause (a) of subheading 9802.00.80, HTSUS). The metal hinge pins satisfy clause (a) because they enter immediately into the assembly process in their exported condition. Since the frame fronts and temples undergo several processes in Mexico prior to their joinder, it is necessary to ascertain whether these processes constitute operations incidental to the assembly process or further fabrication.

The first pre-assembly process involves the removal of mold closure marks by using a hand grinder with an abrasive wheel. This procedure qualifies as an operation incidental to the assembly process because it is a trimming or filing operation designed to remove small amounts of excess plastic after the molding of the frame fronts and temples. See 19 CFR 10.16(b)(4).

The next step of polishing the areas on the temple or frame front where the mold closure marks were removed constitutes an operation incidental to the assembly process. In part, 19 CFR 10.16(c)(5) provides that polishing which imparts significant new characteristics or qualities to an article is an operation not incidental to the assembly process. The polishing here does not impart a significant new characteristic to the temple or frame front, but is, instead, analogous to a cleaning operation which is enumerated in 19 CFR 10.16(b)(1) as an acceptable operation incidental to the assembly process.

The operation of printing the logos, "Ray-Ban" and "Cats" on the left and right temples, respectively, using a transfer printing press also constitutes an operation incidental to the assembly process. In C.S.D. 79-314, 13 Cust. Bull. 1468 (1979), Customs determined that printing which serves the purpose of "origin markings, trademark, polarity, color coding, part number identification, or instruction for use," is not substantial in nature and "reasonably appear[s] to be commercially and functionally related to the overall assembly process and the assembled article itself." Since both "Ray-Ban" and "Cats" are
registered trademarks, the printing of these names does not preclude application of the partial duty exemption under subheading 9802.00.80, HTSUS.

Having found that the three pre-assembly processes constitute operations incidental to the assembly process, we conclude that the frame fronts and temples satisfy clause (a) of subheading 9802.00.80, HTSUS.

For purposes of subheading 9802.00.80, HTSUS, the term "assembly" means the fitting or joining together of fabricated solid components. 19 CFR 10.16(a); C.J. Tower & Sons of Buffalo, Inc. v. United States, 62 Cust. Ct. 643, C.D. 3840, 304 F. Supp. 1187 (1969). Joinder by the use of fasteners is one of the acceptable means of assembly listed in 19 CFR 10.16(a). The assembly operation in this case involves a three step process: (1) inserting the hinge pin, a type of fastener, into the first half of the temple using special hinge pin pliers; (2) placing the temple onto the hinge of the frame front; and (3) finishing the pin insertion utilizing modified pliers.

Finally, the closure or folding of the temples to check for proper fit and the visual inspection of the completed frame are operations incidental to the assembly process. See 19 CFR

We find that the U.S. fabricated components, consisting of the nylon sunglass frame fronts, the nylon temples, and the metal hinge pins, are in a condition ready for assembly without further fabrication, do not lose their physical identities in the assembly operations, and are not otherwise advanced in value or improved in condition except by assembly operations and operations incidental thereto. Therefore, the nylon sunglass frames are eligible for the duty allowance under subheading 9802.00.80, HTSUS.

HOLDING:

The leather-wrapped temples will not be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, when returned to the U.S. No allowance may be made for the cost or value of the leather component which is of Canadian origin. The U.S.-origin metal temples with the plastic encapsulation are not eligible for the exemption since they will be advanced in value or improved in condition by a bending process which is not an assembly operation or an operation incidental thereto. The acetone is also not eligible because it is not a fabricated component of a type designed to be fitted together with other components.

The processes performed in Mexico on the components of the nylon sunglass frames are considered acceptable assembly operations or operations incidental thereto. Since all the components of the frames are of U.S. origin, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of these components when the frames are returned to the U.S., upon compliance with the documentary requirements of 19 CFR 10.24.

Sincerely,

Acting Director
Commercial Rulings Division


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