United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1993 HQ Rulings > HQ 0951308 - HQ 0951384 > HQ 0951319

Previous Ruling Next Ruling


HQ 951319


May 13, 1992

CLA-2 CO:R:C:T 951319 CAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 6307.90.9480; 9802.00.80; 9801.00.10

Mr. Bernard R. Nottling
Rudolph Miles & Sons, Inc.
4950 Gateway East
P.O. Box 144
El Paso, Texas 79942

RE: Classification of Index Tabs; Assembly; Incidental Operation; Cutting to Length; Cutting to Shape; Packaging

Dear Mr. Nottling:

This letter is in response to your inquiry of January 22, 1992, requesting a tariff classification regarding index tabs, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The tabs in question will be assembled in Mexico from an impregnated woven cotton fabric tape approximately 1.75 inches wide (44 cm) and a paperboard strip approximately 7/16 inches wide (11 cm) by 0.5 cm thick. The fabric tape is composed of 49 percent cotton, by weight, with the remainder being starch, pigments, and a water soluble glue inner surface. The starch provides a shiny surface and when the inner glue surface is moistened, it becomes the adhesive for attaching the tab to the divider or page, and also captures the paper strip.

The paper strip is a 15 pound manila paper. The paper strip is inserted between the moistened folded fabric tape and when glued in place becomes a stiffener to the tab.

The impregnated woven cotton fabric in a finished tab is approximately 63 percent of the weight of the tab with the remaining 47 percent being the paper strip. This percentage varies with the type and style of the tab.

In Mexico, the tabs are produced using high speed semi- automatic assembly equipment. The fabric tape is moistened and folded. The paper strip is then inserted between the fold, closed, and cut to length or trimmed as specified. The tabs can be purchased in varying lengths (samples 59-105 and 59-118). Some tabs are trimmed to a circular shape (sample 59-112). Other tabs are ink stamped with an alphabet letter (sample 59-110).

After assembly the tabs are counted and packaged for retail sale and shipment. The tabs are packaged and purchased in boxes of approximately 12 to 27 tabs each. The individual retail packaging box will be marked with the country of origin (Mexico). The sample boxes provided are of U.S. origin.

The inquirer contends that the tabs "will be entered under HTSUSA 9802.00.80 for the value of the fabric tape and the paper strip." He argues that cutting to length, trimming to shape, and ink stamping are operations incidental to the assembly process. These operations are all performed on the same equipment during the assembly process and are "concomitant" with the assembly process.

ISSUES:

I. Whether the fabric tape and paper strips are classifiable in Heading 6307, HTSUSA?

II. Whether U.S. origin fabric tape and paper strips which are exported to Mexico where they are moistened, folded, ink stamped, cut to specification, and then assembled into index tabs are entitled to a duty allowance under subheading 9802.00.80, HTSUSA, upon importation into the United States?

LAW AND ANALYSIS:

I. Tariff Classification

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative Section or Chapter notes, taken in order.

The Explanatory Notes (EN) to the HTSUSA constitute the official interpretation of the tariff at the international level. The EN to Heading 6307 provides for other made up articles of any textile material which are not included more specifically in other headings of Section IX or elsewhere in the Nomenclature.

In this instance, the index tabs are made up articles of textile material that are not more specifically included elsewhere in the tariff. Therefore, classification is appropriate under Heading 6307, HTSUSA.

II. Applicability of Subheading 9802.00.80

All articles imported into the U.S. are subject to duty unless specifically exempted therefrom under the HTSUSA.

Subheading 9802.00.80, HTSUSA, 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, HTSUSA, 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 cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, 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.

Section 10.16(a), Customs Regulations (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, lamination, 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, HTSUSA, to that component. See, 19 CFR 10.16(c).

Section 10.14(a), Customs Regulations (19 CFR 10.14), provides that components will not lose their entitlement to the exemption under subheading 9802.00.80, HTSUSA, by being subjected to operations incidental to assembly either before, during, or after the assembly process. Although the cutting to length of products exported in continuous lengths is considered an operation incidental to the assembly process (see 19 CFR 10.16(b)(6)), cutting materials into specific shapes or patterns renders the materials ineligible for the exemption (see 19 CFR

In Headquarters Ruling Letter (HRL) 555201 dated April 11, 1990 (which is similar to the instant case and was submitted by the same inquirer), rolls of polyester plastic and rolls of pressure sensitive paper tape were exported to Mexico to make index tabs. In that case, the plastic and paper tape were placed on a machine which glued the paper tape to the plastic. The plastic was then bent, beaded and cut to a profile shape. We held that there was no allowance in duty under subheading 9802.00.80, HTSUSA, for the value of the plastic as it was cut to a profile shape abroad. However, we held that the pressure sensitive tape which was merely cut to length before being glued to the plastic index tab was accorded an allowance in duty under that subheading. In the instant case, gluing the fabric tape to the paper is an acceptable assembly operation set forth in 19 CFR 10.16(a). Additionally, the cutting to length of the fabric tape and paper strips is an incidental operation to the assembly of the index tabs. See, 19 CFR 10.16b(6); HRL 555201, supra.

Based on the foregoing, we find that the requirements of subheading 9802.00.80, HTSUSA, are satisfied with regard to the fabric tape and paper strip utilized to create tab numbers 59- 105 and 59-118. Those materials are exported in condition ready for assembly without further fabrication. They have not lost their identity by change in shape, form or otherwise, and have not been advanced in value or improved in condition in Mexico except by being assembled and except by operations incidental to the assembly process (i.e. moistening, gluing and cutting to length). Therefore, a partial duty allowance under subheading 9802.00.80, HTSUSA, may be allowed for the value of the fabric tape and paper strips assembled into index tab numbers 59-105 and 59-118. However, the fabric tape and paper strips which are cut to a circular shape (number 59-112) will not receive a partial duty allowance because they are not exported in condition ready for assembly without further fabrication. See, 19 CFR 10.14(a); HRL 555201, supra.

With regard to the ink stamping operation, we believe that this is an operation incidental to assembly pursuant to 19 CFR 10.16(b)(7) (marking of assembled articles is incidental to assembly). Thus, a duty allowance under subheading 9802.00.80, HTSUSA, may be afforded to the fabric tape and paper strips assembled into index tab number 59-110.

We have held that U.S.-origin packaging materials which are not advanced in value or improved in condition while abroad are separately entitled to duty-free treatment under subheading 9801.00.10, HTSUSA. The act of being filled with their contents is not considered to be an advancement in the condition of the container or materials. See, HRL 731806 dated November 18, 1988. Thus, since the packaging materials in the instant case are of U.S. origin, they are entitled to duty-free treatment under subheading 9801.00.10, HTSUSA, upon compliance with the documentation requirements of 19 CFR 10.1.

HOLDING:

The instant merchandise is classifiable in subheading 6307.90.9480, HTSUSA, which provides for other made up articles...other: other, other.

A partial duty allowance under subheading 9802.00.80, HTSUSA, may be allowed for the value of the fabric tape and paper strips which are moistened, folded, glued, ink stamped with an alphabet letter and cut to length in Mexico to create index tab numbers 59-105, 59-118, and 59-110. These operations are acceptable assembly operations or operations incidental thereto. However, a partial duty allowance under that subheading is not allowed for the fabric tape and paper strips which are assembled into index tabs that are cut to a circular shape (number 59-112) as cutting material to shape renders the material ineligible for the exemption. Packaging material of U.S. origin which is exported to Mexico to be filled with its contents is entitled to duty-free treatment under subheading 9801.00.10, HTSUSA, when returned to the United States, upon compliance with the documentation requirements of 19 CFR 10.1.

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

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of the international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that 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 available for inspection at your local Customs office.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: