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HQ 556171


December 2, 1991

CLA-2 CO:R:C:S 556171 DSN

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Herbert Lictenberg
President, S. Lictenberg & Co., Inc.
261 Fifth Avenue
New York, New York 10016

RE: Curtains; assembly; cutting; embroidery; further fabrication; Bayliss, C.S.D. 90-28; 19 CFR 10.14(a); 19 CFR 10.16(a); 19 CFR 10.16(c)(2)

Dear Mr. Lictenberg:

This is in response to your letter of April 3, 1991, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to window curtains to be produced in Mexico from U.S.- origin fabric. You were advised of the tariff classification and country of origin of the curtains by letter of August 5, 1991.

FACTS:

According to your submission, bolt fabric of U.S.-origin will be sent to Mexico to be assembled into window curtain panels. You state that in Mexico the fabric will be cut to length. The fabric will be machine embroidered in specific patterns. The top of the fabric will be folded and sewn to create a pocket through which a curtain rod is inserted, and the bottom is folded and sewn before the curtains are packaged and returned to the U.S.

ISSUE:

Whether the curtains qualify for the partial duty exemption available 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 this tariff provision is subject to duty upon the full value of the imported assembled article, less the cost or value of such U.S. components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states in part that:

[t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components. Materials ... which are cut into specific shapes or patterns abroad are not considered fabricated components.

Section 10.16(a), Customs Regulation (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 operations. However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to the component. See, 19 CFR 10.16(c).

In the present case, we are of the opinion that the U.S.- origin fabric embroidered with specific patterns will not be eligible for the duty allowance available under subheading 9802.00.80, HTSUS. The nature of embroidery as a form of sewing was discussed in Baylis Brothers, Inc. v. United States, 60 Cust. Ct. 336, C.D. 3383, 282 F. Supp. 791 (1968), aff'd, 56 CCPA 115, C.A.D. 964, 416 F.2d 1383 (1969), wherein the court stated that, in common meaning, to embroider an object means to ornament it with needlework and that the operative feature of embroidery was the ornamental characteristic of the stitching. If thread used to embroider serves merely to ornament and not to join multiple layers of fabric, we have held that such an operation is an unacceptable assembly of components. See C.S.D. 90-28, 24 Cust. Bull. 18. In this case, it appears that the embroidery is performed on a single layer of fabric and the yarn used in the operation does not serve as a joining agent. Therefore, the embroidering is not considered an acceptable assembly operation. Moreover, in view of the extensive nature of the embroidery, it is clearly the most significant operation performed abroad. Therefore, we believe that it constitutes a fabrication of the curtain panels, thereby precluding 9802.00.80, HTSUS, treatment for the curtains.

HOLDING:

From the information provided, it is our opinion that the imported curtain panels assembled in Mexico from U.S.-origin bolt fabric are ineligible for the partial duty exemption available under subheading 9802.00.80, HTSUS, and therefore, are dutiable on their full value.

Sincerely,

John Durant, Director
Commercial Rulings Division

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