HQ 0222951 - Embroidery of wearing apparel; 19 U.S.C. 1313(a); 19 U.S.C. - United States International Trade Commision Rulings

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HQ 222951

August 12, 1991

DRA-4-CO:R:C:E 222951 JR

CATEGORY: DRAWBACK

Mr. Stephen L. Bresler
W.J. Byrnes & Co.
P.O. Box 20623
Phoenix, Arizona 85036

RE: Embroidery of wearing apparel; 19 U.S.C. 1313(a); 19 U.S.C.

Dear Mr. Bresler:

This is in response to your ruling request dated January 11, 1991, on behalf of your client, Antiqua Sportswear, Incorporated, an importer of wearing apparel. Your samples of two knit shirts one with and one without an embroidered logo are returned with this ruling.

FACTS:

An importer of foreign made wearing apparel, i.e., knit shirts, sweaters, pants, and other wearing apparel, would like to embroider logos on these types of imported garments for overseas colleges and golf pro shops, export them, and claim a refund of duties on the original importation.

ISSUE:

Whether imported knit shirts and other wearing apparel, on which logos are embroidered on the garments in the United States, qualify for either manufacturing or direct identication same condition drawback under 19 U.S.C. 1313(a) or 19 U.S.C.

LAW AND ANALYSIS:

A manufacture or production under 19 U.S.C. 1313(a) or (b) requires that there must be a change or a transformation of an article; a new and different article must emerge "having a distinctive name, character or use." See Anheuser-Busch Brewing Association v. United States, 207 U.S. 556 (1907). In Rolland Freres, Inc. v. United States, T.D. 47763 (CCPA 1935), a case involving the embroidering of plain imported dresses, the court affirmed Customs' finding precluding drawback under 19 U.S.C. 1313(a) and held that, on the facts presented, no manufacture or production occurred because the embroidering of the dresses did not transform them within the letter and spirit of the drawback statute; the dresses were still dresses. The finished articles were not appreciably different from the imported articles.

From the samples you have submitted, the embroidery of the shirt does not transform the shirt into a new article, nor has a new and different article emerged with a distinctive name, character or use. The shirts remain shirts. Your client, therefore, would not be entitled to manufacturing drawback under 19 U.S.C. 1313(a) despite the fact that the shirts have been altered by the embroidery of a logo.

Under 19 U.S.C. 1313(j)(1), known as direct identification same condition drawback, a refund of duty paid on the imported merchandise is allowed if that merchandise is exported within certain time limitations without being used or changed in condition before exportation. The performance of an incidental operation on the articles such as (but not limited to) testing, cleaning, repacking, or inspecting is not considered to be a use under this provision. The act of embroidery is, however, more than an incidental operation in this case because it changes the condition of the imported article from being a plain shirt to one having a logo and, as such, renders it ineligible for same condition drawback.

The process of embroidering wearing apparel in this instance does not comply with either manufacturing (19 U.S.C. 1313(a)) or same condition (19 U.S.C. 1313(j)(1)) drawback. An operation which fails to qualify under manufacturing does not, by operation of such failure, qualify under same condition drawback as both provisions of the drawback law are not complementary. See C.S.D. 91-18.

HOLDING:

Imported knit shirts and other wearing apparel, on which logos are embroidered on the garments in the United States, neither qualify for manufacturing nor direct identification same condition drawback under 19 U.S.C. 1313(a) or (j).

Sincerely,

John A. Durant

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