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NY 852902


JUN 13 1990

CLA-2-52:S:N:N3H:352 852902

CATEGORY: CLASSIFICATION

TARIFF NO.: 5208.59.8090

Mr. Robert G. Stoner
Springs Industries
Wamusutta/Pacific Home Products
P.O. Box 2000, Pacific Street
Lyman, South Carolina 29365

RE: The tariff classification of 100% cotton printed fabric which has been woven in the United States and then printed in Italy.

Dear Mr. Stoner:

In your letter dated May 21, 1990 you requested a tariff classification ruling.

You indicate that you are contemplating exporting U. S. manufactured greige 100% cotton woven fabric to Italy where it will be printed. After printing, you intend to import the finished fabric and use it in the manufacture of bedding products. The printed fabric is composed of 100% cotton and has been woven using a plain weave except that two filling picks are woven as one. It contains 44.9 single yarns per centimeter in the warp and 55.1 single yarns per centimeter in the filling. It is constructed using 45/1 c.c. yarns in the warp and 50/1 c.c. yarns in the filling. Weighing 139 g/m2, the fabric will be imported in a variety of widths ranging between 119 and 300 centimeters. Based on the data that you have provided, the average yarn number for this product has been calculated to be 71 in the metric system.

Your correspondence suggests that you believe that this transaction may be eligible for partial duty exemption under subheading 9802.00.50, Harmonized Tariff Schedules of the United States (HTS). This is not the case. Subheading 9802.00.50, HTS, provides for a partial duty exemption for articles returned after having been exported for repairs or alterations. The meaning of "alteration" for the purposes of this provision has been the subject of considerable litigation.

United States v. The J. D. Richardson Company, 36 CCPA 15, CAD 390 (1948) addressed the meaning of the term "alteration" in paragraph 1615 (g), the predecessor of subheading 9802.00.50, HTS. The Appeals Court ruled that:

"...it was not intended by the word
"alterations", contained in paragraph 1615 (g) to permit articles, such as in the instant case, to be exported in an unfinished condition...and so manufactured abroad that upon their return would be properly dutiable as parts of machines."

The concept that the provision for repairs and alterations does not apply to a continuation of a manufacturing process was further elucidated in Doliff & Company v. The United States, 78 CCPA 77, CAD 1225 (1979). In this case U.S. produced greige fabric was exported to Canada where it was converted into finished fabric by scouring, dyeing, and finishing. The Court observed that:

"...repairs and alterations are made to completed articles and do not include intermediate processing operations which are performed as a matter of course in the preparation or the manufacture of finished articles."

Since the greige fabric you are exporting is unfinished and the printing that will be performed in Italy is a continuation of the manufacturing operation to finish the fabric and make it suitable for its intended purpose, partial duty exemption under 9802.00.50, HTS, is precluded.

It should be noted that since 9802.00.50, HTS, does not apply to your contemplated transaction, the cost of the greige goods is part of the dutiable value of the printed fabric that will be imported from Italy. If the cost of the greige goods is not included in the invoice price, it must be added to that price for duty assessment purposes.

The applicable subheading for the printed cotton woven fabric will be 5208.59.8090, Harmonized Tariff Schedule of the United States (HTS), which provides for woven fabrics of cotton, containing 85 percent or more by weight of cotton, weighing not more than 200 g/m2, printed, other fabrics, other, of number 69 or higher number, other. The rate of duty will be 14.7 percent ad valorem.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

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