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HQ 555592


October 18. 1990
CLA-2 CO:R:C:V 555592 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9801.00.10

Mr. Alex Romero, Jr.
A.F. Romero & Co., Inc.
477 Railroad Blvd.
P.O. Box 989
Calexico, California 92231-0989

RE: Applicability of duty exemption in subheading 9801.00.10, HTSUS, to "Successful Gardening Kit" to be imported from Mexico.Set; packaging; Superscope; 554935

Dear Mr. Romero:

This is in response to your letter dated October 20, 1989, requesting a ruling on the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to the "Successful Gardening Kit" to be imported from Mexico. We regret the delay in responding.

FACTS:

The "Successful Gardening Kit" consists of the following items:

(1) an unfilled ring binder of Chinese origin having a paperboard cover;
(2) four sets of shrink-wrapped pages of U.S. origin (printed with pictures and text about plant and flower growth); and
(3) scissors of Taiwanese origin.

All three items will merely be packaged together in Mexico in a printed, corrugated paperboard mailing carton, after which the packaged kit will be imported into the U.S.

In Headquarters Ruling Letter (HRL) 085205 dated September 27, 1989, we held that the "Successful Gardening Kit" qualifies as a set under General Rule of Interpretation (GRI) 3(b), HTSUS, and, therefore, is classifiable under the HTSUS heading applicable to the item of the set which gives the set its essential character. As we determined that the essential character of the set is imparted by the U.S. printed pages, we concluded that the set is classified under subheading 4901.99.00, HTSUS (printed books, printed matter; other).

Considering that the item in the set imparting its essential character is of U.S. origin, you ask whether the entire set should be entitled to HTSUS subheading 9801.00.10 treatment, rather than just the printed pages.

ISSUE:

Whether the "Successful Gardening Kit", or any part thereof, will qualify for the duty exemption available under HTSUS subheading 9801.00.10 when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9801.00.10, HTSUS, 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 Superscope, Inc. v. United States, 13 CIT , 727 F.Supp. 629 (CIT 1989), the court found that glass panels of U.S. manufacture that were exported, packaged with other components to make unassembled stereo cabinets, and then imported into the U.S. as an entirety were not advanced in value or improved in condition while abroad, but were merely repackaged. Therefore, the court held that the glass panels were entitled to duty free entry under item 800.00, Tariff Schedules of the United States (TSUS) (the precursor provision to subheading 9801.00.10, HTSUS).

You contend that the "Successful Gardening Kit" should enter the U.S. duty free under subheading 9801.00.10, HTSUS, as the kit is a set with the essential character imparted by the U.S. printed pages. Your contention is based on HRL 554935 dated April 10, 1989, in which we found that a dialysis kit containing foreign and U.S. items and classified as a set according to GRI 3(b), HTSUS, would be entitled to duty-free entry if the item which gives the set its essential character is entitled to free entry under subheading 9801.00.10, HTSUS. However, we stated that if the item imparting the essential character is not entitled to classification under subheading 9801.00.10, HTSUS, then free entry under this provision for the set or any other part is precluded.

U.S. Note 1, Chapter 98, HTSUS (the chapter encompassing special classification provisions, including subheading 9801.00.10, HTSUS), provides as follows:

The provisions of this chapter are not subject to the rule of relative specificity in general rule of interpretation 3(a). Any article which is described in any provision in
this chapter is classifiable in said provision if the conditions and requirements thereof and any applicable regulations are met. (Emphasis added).

The "conditions and requirements" of subheading 9801.00.10, HTSUS, are (1) that the article be a product of the U.S.; and (2) that it not be advanced in value or improved in condition by any means while abroad. Granting duty-free treatment under this provision to items in a set (e.g., foreign-made items) which do not meet these "conditions and requirements" would clearly contravene the plain meaning and intent of the referenced U.S. Note. We believe there is no question that the application of GRI 3(b) was never intended to result in granting American goods returned status to foreign-made materials or components in a set or mixed or composite goods. Therefore, HRL 554935 is modified accordingly.

With respect to the "Successful Gardening Kit" containing the U.S. printed pages, the operations performed abroad consist merely of repackaging the U.S. product with the foreign items. As the packaging of the U.S. item with the other items does not advance in value or improve in condition the U.S. printed pages, the portion of the "Successful Gardening Kit" consisting of the U.S. product will be eligible for the duty exemption under subheading 9801.00.10, HTSUS. Therefore, the "Successful Gardening Kit" will be dutiable on its full value at the rate found in subheading 4901.99.00, HTSUS, with a classification allowance for the cost or value of the U.S. printed pages. This assumes that the documentation requirements of 19 CFR 10.1 are met and that the district director of Customs at the port of entry is satisfied of the U.S. origin of each product claimed to be entitled to this duty exemption.

HOLDING:

On the basis of the information provided, as the U.S. printed pages, returned as a part of the "Successful Gardening Kit", will not be advanced in value or improved in condition while abroad as a result of the packaging operations, the U.S. printed pages will qualify for the duty exemption under subheading 9801.00.10, HTSUS, upon compliance with the documentary requirements of 19 CFR 10.1.

Sincerely,

John Durant, Director

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