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HQ 223640


March 2, 1992

CON-9-04-CO:R:C:E 223640 CB

CATEGORY: ENTRY

TARIFF NO.: 5408.22.00

Mr. Eric Jones
Eric Jones Customs Brokerage
5777 W. Century Boulevard
Suite 380
Los Angeles, CA 90045

RE: Temporary Importation under Bond; HTS 9813.00.05; Fabric Imported and Processed

Dear Mr. Jones:

This is in response to your request for a binding ruling dated December 2, 1991 on behalf of Embroidertex West Ltd. (Embroidertex) which you addressed to the Customs Information Exchange in New York. Your request was forwarded to our office for a reply.

FACTS:

Embroidertex intends to import woven fabric into the United States from India. After importation the fabric will be processed by using a Schiffli embroidery machine to embroider a design. By using an elasticized yarn as a bobbin yarn, the fabric puckers and a unique fabric construction is produced.

You have described the imported fabric as a rayon printed georgette. However, our analysis indicates that it is composed of 100% filament acetate which has been dyed a single uniform color and has been woven with a satin weave.

ISSUE:

Whether the imported product and the processing it undergoes in the United States qualify for temporary importation under HTS 9813.00.05?

LAW AND ANALSYIS:

All merchandise imported into the United States is subject to duty unless specifically exempted therefrom. Subheading 9813.00.05, HTSUS, provides for duty-free entry, under bond, for merchandise imported into the United States for a temporary period for the purpose of repair, alteration, or processing. The latter may include processing that transforms an article into one -2-
that is considered manufactured or produced in the United States. The provision requires that the imported merchandise be exported or destroyed within one year of the date of importation. This period may be extended for one or more periods which, when added to the initial one year, do not exceed a total of three years. In order to qualify for this duty-free treatment, merchandise cannot be imported for the purpose of sale (or sale on approval).

Textiles are permitted duty-free treatment under subheading 9813.00.05, HTSUS, if they are not subject to quota and visa restrictions. Entry under this provision would not be precluded if the textiles are subject to a quota and the quota is not filled. However, the merchandise would be charged against the quota, since TIB entries are considered consumption entries for purposes of administering quotas.

You state that the woven fabric is imported with a textile visa from India. Once the product is in the United States it is processed by using a Schiffli embroidery machine to embroider an elasticized design. From the description of the operation given, all indications are that a process takes place. Thus, the embroidery procedure falls within subheading 9813.00.05, HTSUS. It is our opinion that the embroidery creates a new and different article of commerce resulting in an article produced or manufactured in the United States. Therefore, you must meet all of the accountability requirements under the U.S. Notes of Subchapter XIII, HTSUS. In particular, subheading 9813.00.05, HTS, U.S. Note 2(b) states that if any processing of such merchandise results in an article manufactured or produced in the United States: (i) a complete accounting will be made to the Customs Service for all articles, wastes and irrecoverable losses resulting from such processing; and (ii) all articles and valuable wastes resulting from such processing will be exported or destroyed under Customs supervision within the bonded period; except that in lieu of the exportation or destruction of valuable wastes, duties may be tendered on such wastes at rates of duties in effect for such wastes at the time of importation.

The applicable Customs regulations may be found at 19 CFR 10.31 through 10.40. Section 10.31(f) states that a bond shall be given on Customs Form 301 in an amount equal to double the duties which it is estimated would accrue (or such larger amount as the district director shall state in writing to the entrant is necessary to protect the revenue) had all the articles covered by the entry been entered under an ordinary consumption entry. The basis for the computation of the amount of a temporary importation bond is estimated duties determined in accordance with sections 141.90 and 141.103 of the Customs Regulations (19 CFR 141.90 and 19 CFR 141.103). To this amount is added any -3-
other duties that the district director ascertains may become due on the articles so entered and, as well, estimated expenses of reimbursable supervision such as may arise, for instance, when the articles are not properly marked.

The Chief, National Import Specialist Branch 3, at the New York Seaport has indicated that the fabric is classifiable in subheading 5408.22.00, HTSUS, which provides for woven fabrics of artificial filament yarn, including woven fabrics obtained from the materials of heading 5405, other woven fabrics, containing 85 percent or more by weight of artificial filament or strip or the like, dyed. The textile category for this subheading is 618.

HOLDING:

Entry is permitted in this case under a temporary importation under bond as a process under subheading 9813.00.05, HTSUS. The importer must meet all of the accountability requirements under the U.S. Notes of Subchapter XIII to the satisfaction of the District Director.

The subject merchandise is classifiable in subheading 5408.22.00 HTSUS, which provides for woven fabrics of artificial filament yarn, including woven fabrics obtained from the materials of heading 5405, other woven fabrics, containing 85 percent or more by weight of artificial filament or strip or the like, dyed. The rate of duty is 17% ad valorem and the textile category is 618.

Sincerely,

John A. Durant, Director

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