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HQ 555642


May 9, 1991

CLA-2 CO:R:C:S 555642 LS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Leslie A. Glick, Esq.
Porter, Wright, Morris & Arthur
1233 20th Street, N.W.
Washington, D.C. 20036-2395

RE: Applicability of subheading 9802.00.80, HTSUS, to decorated mirror components of framed mirrors; decorating by applying Deca Glass Tech paint to silk screen design placed over glass mirror; further fabrication; 19 CFR 10.16(c)

Dear Mr. Glick:

This is in response to your letter dated April 18, 1990, requesting a ruling, on behalf of Tyrone Art, Inc., as to whether a certain process of decorating the mirror components of framed mirrors by applying a lacquer substance constitutes an operation incidental to the assembly of the framed mirrors, within the meaning of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The following facts are based upon your letter and a telephone conference between yourself, your client, and a member of my staff.

Tyrone Art, Inc. plans to ship U.S. origin mirrors, frames, a clear liquid lacquer, known as "Deca Glass Tech paint", and other materials to Mexico, where the following operations will take place.

1. A silk screen border design or stencil is laid over the top of the U.S. mirror.

2. The Deca Glass Tech paint is poured by hand over the silk screen and applied with a hand squeegee. This lacquer material is allowed to air dry for approximately five minutes. A design is formed on the surface of the glass when the lacquer material fills in the hollow areas of the stencil. The excess lacquer is rinsed away with water, and the stencil is removed from the glass. The dried Deca Glass Tech paint has a frosted white appearance on the mirror, and serves a decorative purpose. Although you described this process as "etching" in your letter, you explained during the conference call that it is not technically etching. Instead, you claim that it is similar to an adhesion process, and that the lacquer substance becomes a flat solid after it dries, in a manner similar to paint. For purposes of this ruling, we will refer to the steps described in this paragraph as a decorating process.

3. A U.S. metal hanger is hand-inserted into a die cut on a U.S. pre-cut corrugated back.

4. The decorated mirror is placed over the top of the U.S. corrugated back.

5. The mirror and corrugated back are fit within a U.S. frame made of aluminum, wood, or plastic. You state that most of the frames will be made of the plastic material.

6. U.S. tape is applied by hand along the perimeter of the back of the framed mirror to firmly secure the corrugated back and mirror to the frame.

7. The completed mirror(s) is placed in corrugated packaging which is stapled closed.

8. Six individually packed framed mirrors are packed in a U.S. shipping carton, sealed with tape, and imported into the U.S.

You have submitted two samples, both of which have frames made of a plastic material. One consists of a single mirror with a border design along the edges. The other sample consists of one large undecorated mirror and two smaller decorated mirrors placed together in one corrugated cardboard packaging. The design on the smaller mirrors consists of a vase with flowers. You state that the decorating process is not done in the U.S. prior to shipping the glass to Mexico for assembly because shipment of the individual pieces of glass would cause them to scratch against each other, thus damaging the designs created with the Deca Glass Tech paint. The decorated mirrors are protected once they are put into the frames.

You contend that the process of decorating the mirrors by applying the Deca Glass Tech paint constitutes an operation incidental to the assembly of the framed mirrors. Therefore, you assert that a duty allowance should be permitted under subheading 9802.00.80, HTSUS, for the decorated mirror components when they are imported into the U.S. as part of the completed framed mirrors. You claim that the operation involved in decorating the mirrors is of a minor nature which should not be considered a further fabrication, within the meaning of subheading 9802.00.80, HTSUS. To support this claim, you have submitted cost and time figures which indicate that the decorating process comprises between 3% and 4% of the time involved to assemble the completed framed mirror, and approximately 1% of the framed mirror's entire cost.

Since you have already received a ruling on certain picture frames produced by Tyrone Art, Inc. using similar assembly operations in Mexico, you have limited this ruling request to the issue of whether decorating the mirrors constitutes an operation incidental to assembly. That prior ruling, Headquarters Ruling Letter (HRL) 555214 dated December 26, 1989, involved three types of picture frames containing picture prints. We held that those frames made from cut-to-length wood and aluminum moldings would qualify for a duty allowance under subheading 9802.00.80, HTSUS, because the cutting operation abroad was considered incidental to the assembly process. However, we found that the frames made of a plastic border material, which were exported in a straight, pre-notched condition and hand-wrapped around the 3-part picture print sandwich, were not eligible for a duty allowance under this tariff provision. This holding was based upon our finding that the hand-wrapping, i.e., bending, of the U.S. plastic border material constituted a further fabrication of this component. In HRL 555612 dated September 13, 1990 (a partial reconsideration of HRL 555214), we affirmed our ruling with respect to the frames made of the plastic border material.

ISSUE:

Whether the process of decorating the mirror components of the framed mirrors by applying the "Deca Glass Tech paint" constitutes an operation incidental to the assembly process of inserting and securing the mirrors in the frames.

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).

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners.

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. See 19 CFR 10.16(a). Examples of operations considered incidental to the assembly process are delineated at 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, is not regarded as incidental to the assembly and precludes the application of the exemption under subheading 9802.00.80, HTSUS. See 19 CFR 10.16(c).

We first consider whether the process of decorating the mirrors by applying the Deca Glass Tech paint constitutes an assembly operation, within the meaning of subheading 9802.00.80, HTSUS. The legislative history of this tariff provision makes it clear that the partial duty 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). Because the only components involved in the decorating process are the mirror and the Deca Glass Tech paint, and this "paint" constitutes a liquid, there is no joinder of two or more solid components. See 19 CFR 10.16(a). Consequently, the decorating process itself does not constitute an assembly operation.

However, we do find that, based upon 19 CFR 10.16(a), the combined processes of fitting the decorated mirror and corrugated back into the slits of the plastic frame, and applying tape to firmly secure the mirror and back in the frame, constitute an acceptable assembly operation. Assuming that this plastic frame is made from the same material as the plastic frame in HRL 555214 and HRL 555612 (i.e., straight, pre-notched extruded plastic border material of U.S. origin), and is subjected to the same processes in Mexico, we find that the plastic border material which is hand-wrapped or bent to create the frame for the mirror is not eligible for a duty allowance under subheading 9802.00.80, HTSUS, because the bending process constitutes a further fabrication of this U.S. component. Provided that the processes involved in joining the frames made of aluminum and wood with the mirror and backing encompass the same procedures employed in HRL 555214 (with respect to the assembly of the aluminum and wood picture frames with the picture print sandwiches), we find that these wood and aluminum frames will be eligible for a duty allowance under subheading 9802.00.80, HTSUS, when the completed article is imported into the U.S.

We next address your contention that the process of decorating the mirrors with the Deca Glass Tech paint is merely an operation incidental to the above-described assembly process, rather than a further fabrication of the mirror components. We find that the decorating process is not an operation incidental to the assembly of the mirror, back, and frame components, because it is significant in nature and its primary purpose is to physically improve or enhance the appearance of the mirror component. See 19 CFR 10.16(c). Among the examples of operations enumerated in 19 CFR 10.16(c) which are considered not to be incidental to the assembly process is "[p]ainting primarily intended to enhance the appearance of an article or to impart distinctive features or characteristics." 19 CFR 10.16(c)(3). Although the decorating process here is not technically the same as painting, it is sufficiently analogous to fit within this enumerated example. Furthermore, the decorating operation is not related to the assembly process of securely fitting the mirror and corrugated back in the frame. See 19 CFR 10.16(c). Thus, we find that the application of the Deca Glass Tech paint constitutes a further fabrication of the mirror component, so as to preclude this component's eligibility for a duty allowance under subheading 9802.00.80, HTSUS.

In United States v. Mast Industries, Inc., 515 F. Supp. 43, 1 CIT 188, aff'd, 668 F.2d 501, 69 CCPA 47 (1981), the court considered the legislative history of the phrase "incidental to the assembly process," and found that Congress intended a balancing of all relevant factors to ascertain whether an operation of a "minor nature" was incidental to the assembly process. The court stated that relevant factors included:

(1) whether the relative cost of the operation and time required by the operation were such that the operation may be considered minor;
(2) whether the operation is necessary to the assembly process;
(3) whether the operation is so related to the assembly that it is logically performed during assembly; and, (4) whether economic or other practical considerations dictate that the operation be performed concurrently with assembly.

Although we recognize that both the time and cost involved in the decorating operation are minor compared to the time required by the entire assembly operation and the cost of the completed framed mirror, we find that the other three criteria set forth in Mast are not satisfied. Decorating the mirror is neither a necessary prerequisite to the subsequent assembly process nor related to that assembly. Further, there is no indication that economic or other practical considerations mandate that the decorating be performed concurrently with the assembly. Weighing these factors further confirms our conclusion that the decorating operation is not an incidental operation, within the meaning of subheading 9802.00.80, HTSUS, but rather constitutes a further fabrication of the mirror component.

HOLDING:

On the basis of the information presented, we find that the process of decorating the mirror components of the framed mirrors by applying the "Deca Glass Tech paint" is not an operation incidental to the assembly of the mirrors and corrugated backs with the frames, but rather is a further fabrication of the mirror components. Therefore, a duty allowance will not be permitted under subheading 9802.00.80, HTSUS, for the cost or value of the decorated mirror components when the framed mirrors are imported into the U.S. However, the one undecorated mirror component which is part of a 3-piece mirror set will be entitled to a duty allowance.

Sincerely,

John Durant, Director
Commercial Rulings Division

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