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HQ 950738


February 28, 1992

CLA-2 CO:R:C:T 950738 CMR

CATEGORY: CLASSIFICATION

TARIFF NO.: 6217.90.0075, 9802.00.8060

Ms. Maria Casero
Casero's & Associates
1425 Whitlock, Suite 108
Carrollton, Texas 75006

RE: Classification of smocked fabric; embroidered fabric or parts of garments; 5810, HTSUSA, or 6217, HTSUSA; U.S. fabric smocked in Mexico or Ecuador; 9802, HTSUSA

Dear Ms. Casero:

This ruling is in response to your submission of October 24, 1991, requesting the proper classification and category for U.S. fabric smocked in Ecuador or Mexico.

FACTS:

Flat woven fabric manufactured in the United States is cut into squares or rectangles and then exported to Ecuador or Mexico where a portion of it is smocked/embroidered with either Ecuadorian thread or Mexican thread. The woven fabric is usually 100 percent cotton, but sometimes is a 70 percent cotton/30 percent polyester blend. The smocked fabric pieces are then returned to the United States where they will be used to make girls dresses.

The fabric pieces will not be stencilled to show where the thread should be sewn for the smocking operation. After smocking, the fabric may be incorporated directly into dress or romper fronts without further cutting.

ISSUE:

Does the smocking operation in Ecuador or Mexico qualify the smocked fabric pieces for a duty allowance under subheading 9802.00.80, HTSUSA?

Are the smocked fabric pieces classifiable as embroidered fabric of heading 5810, HTSUSA, or as parts of garments of heading 6217, HTSUSA?

LAW AND ANALYSIS:

The smocking operation in Ecuador or Mexico involves two components, i.e., the woven fabric and the thread. The customs courts have recognized thread as a separate component of assembly, if used as a binding agent, in Baylis Brothers Co. v. United States, 64 Cust.Ct. 256, C.D. 3987 (1970), aff'd, 59 CCPA 9, C.A.D. 1026, 451 F.2d 643 (1971), modified, 474 F.2d 1026 (1973), and L'Eggs Products, Inc., v. United States, 13 CIT 40, 704 F. Supp. 1127 (1989). In fact, the proposed smocking operation is much like the smocking operation at issue in Baylis Brothers.

The issue in Baylis Brothers was whether certain smocked dress fronts qualified for special duty treatment under item 807.00, Tariff Schedules of the United States Annotated [now subheading 9802.00.80, HTSUSA]. In that case, U.S. fabric pieces and thread were exported to Barbados where the fabric was smocked and then returned to the United States. Dots were stencilled on the fabric prior to exportation to Barbados. The smocking operation entailed sewing the thread through the stencilled dots. The Customs Court held the operation was an assembly within the meaning of item 807.00, TSUSA, and the Court of Customs and Patent Appeals affirmed the decision upon appeal. This case differs from Baylis Brothers only in the lack of a stencilling step prior to the smocking of the fabric pieces.

Subheading 9802.00.80 provides for:

Articles 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.

In view of the similarity of the facts of this case with the facts of the Baylis Brothers, Customs views Baylis as controlling and believes that the smocking of the fabric pieces in Ecuador and/or Mexico qualifies the smocked fabric for special duty treatment upon importation into the United States under the provisions of subheading 9802.00.80, HTSUSA.

As to the proper classification of the smocked fabric pieces upon importation into the United States, Customs views the smocked fabric pieces as dedicated to use as dress fronts for children's dresses. Therefore, the smocked fabric pieces are classifiable as parts of garments.

HOLDING:

The smocked fabric pieces are classifiable as parts of garments, other, of cotton in subheading 6217.90.0075, HTSUSA, textile category 359, dutiable at 15.5 percent ad valorem.

The goods qualify for a duty allowance under subheading 9802.00.8060, HTSUSA, assuming compliance with the documentation requirements of section 10.24 of the Customs Regulations (19 CFR 10.24). The provision provides that the duty will be assessed upon the full value of the imported article less the cost or value of the U. S. components incorporated in the finished article.

Products of Mexico which are subject to quota category 359/659 are not eligible for the special access or special regime programs. Ecuador is not part of these special programs, however, there is no quota for this merchandise from Ecuador.

The designated textile and apparel category may be subdivided into parts. If so, the visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service which is updated weekly and is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director
Commercial Rulings Division

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