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HQ 950514

December 30, 1991

CLA-2 CO:R:C:M 950514 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9801.00.10; 9020.00.60

Ms. Holly E. Hanson
Expeditors International of Washington, Inc. 2612 E. 81st Street
Bloomington, MN 55425

RE: "Photo Chemical WHMIS Station"; T.D. 97-1; GRI 3(b); Revocation of NY 866501, HQ 554935, HQ 085967

Dear Ms. Hanson:

We have been asked to review NY 866501, dated September 17, 1991, which classified a "Photo Chemical WHMIS Station" under the Harmonized Tariff Schedule of the United States (HTSUS). The merchandise was classified under subheading 9801.00.10, HTSUS, which provides for: "[p]roducts of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad."

FACTS:

The "Photo Chemical WHMIS Station" is a protective kit for use in photo chemical laboratories. It is assembled in Canada from articles produced in various countries. The following is a list of the articles including their country of origin:

1. Respirator and cartridges United States 2. Respirator wipes United States
3. Splash goggles United States
4. Neoprene coated nylon apron China
5. First aid kit Canada
6. Nitrile gloves Canada
7. Carrying case Taiwan

The respirator consists of a vinyl mask for the nose and mouth with a cartridge receptacle on each side. There are two ammonia gas cartridges for use when handling bleach, bleach-fix and fix. Also, there are two acid gas and organic vapor cartridges for use when handling color developers.

The articles do not undergo any manufacturing process in Canada but are merely packaged in the carrying case. The kit is suitable for sale directly to users without repacking.

ISSUE:

When a set contains U.S. components entitled to duty free treatment and also contains foreign components, are the foreign components also entitled to duty free treatment?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

In NY 866501, as noted, the merchandise was classified under subheading 9801.00.10, HTSUS. This ruling was based upon the reasoning in HQ 554935, dated April 10, 1989, and in HQ 085967, dated March 2, 1990. Both rulings stand for the proposition that, when a United States-origin item qualifying for subheading 9801.00.10, HTSUS, treatment imparts the essential character of a set, in such a case that duty-free treatment should be accorded not only to the United States-origin item but to the foreign- origin items in the set as well.

Note 1 to chapter 98, HTSUS, provides that:

[t]he 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.

In T.D. 97-1, dated January 8, 1991, it was stated that "[t]he '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."

In NY 866501 it was decided that, under GRI 3(b), the kit was indeed a set and that the essential character of the set was the respirator with the cartridges, all produced in the United States. Therefore, because the essential character of the set consisted of United States-origin products, the "Photo Chemical WHMIS Station" was classified under subheading 9801.00.10, HTSUS, with a free rate of duty applicable to the entire set.

However, T.D. 97-1 reconsidered the reasoning in HQ 554935 and HQ 085967, and it was "determined that [the reasoning] not only is inconsistent with U.S. Note 1, Chapter 98, HTSUS, but leads to results not intended by GRI 3(b) or 3(c)." Based upon the principles established in T.D. 97-1, only United States- origin products will be entitled to subheading 9801.00.10, HTSUS, treatment. If a United States-origin product, such as the respirator with cartridges, imparts the essential character of a set, then the foreign-origin products will take the chapter 1-97, HTSUS, rate of duty applicable to the respirator with cartridges, as if those articles were ineligible for subheading 9801.00.10, HTSUS, treatment. They will not be subject to 9801.00.10, HTSUS, treatment as previously ruled.

HOLDING:

The respirator with cartridges, the respirator wipes, and the splash goggles are classifiable under subheading 9801.00.10, HTSUS. Because the respirator with cartridges imparts the essential character of the kit, under T.D. 97-1, the remainder of the articles are classifiable under the chapter 1-97, HTSUS, rate of duty applicable to the respirator with cartridges. That rate is found under subheading 9020.00.60, HTSUS, which provides for: "[o]ther breathing appliances and gas masks." The general, column one rate of duty is 3.7 percent ad valorem.

Because of the principles established in T.D. 97-1, NY 866501, HQ 554935, and HQ 085967 are revoked. This revocation is issued under Section 177.9(d), Customs Regulations [19 CFR 177.9(d)]. It is not to be applied retroactively to NY 866501, HQ 554935, or HQ 085967 [19 CFR 177.9(d)(2)], and will not, therefore, affect past transactions for the importation of your merchandise under those rulings. However, for the purposes of future transactions in merchandise of this type, the above cited rulings will not be valid precedent. We recognize that pending transactions may be adversely affected by this revocation, in that current contracts for importations arriving at a port subsequent to this decision will be classified pursuant to them. If such a situation arises, you may, at your discretion notify this office and apply for relief from the binding effects of this decision as may be warranted by the circumstances.

Sincerely,

John Durant, Director
Commercial Rulings Division

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