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HQ 557394




October 6, 1993

CLA-2 CO:R:C:S 557394 WAW

CATEGORY: CLASSIFICATION

Ms. Pamela Dunn
Advance Tool, Inc.
1590 99th Lane N.E.
Blaine Industrial Square
Blaine, MN 55449

RE: Applicability of the partial duty exemption under subheading 9802.00.80, HTSUS, or subheading 9810.00.10, HTSUS, for plastic injection molds; assembly; bolting; testing

Dear Ms. Dunn:

This is in response to your letter dated May 28, 1993, requesting a ruling on the applicability of the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) or, in the alternative, subheading 9801.00.10, HTSUS, to plastic injection molds from Taiwan. You have provided a blueprint of the Drop Tube Base, as an example of one of the molds that you plan to import into the U.S., for our review.

FACTS:

You state that Advance Tool purchases manufactured cylinders and heating manifolds of U.S.-origin and then, separately exports the components necessary to produce a certain type of mold to Taiwan. In Taiwan, the mold manufacturer assembles the individual components into the finished mold. You claim that the cylinders and heating manifolds are sent to Taiwan for testing purposes only. You also state that the U.S.-origin cylinder and heating manifold are not re-worked or changed through the assembly and testing process in any way. These components are sent to Taiwan for the purpose of testing the mold and checking the parts for any defects.

You have asked us to address whether an allowance in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. components assembled. with the mold, or in the alternative, if, after the testing is completed, the U.S. components are disassembled from the molds and shipped into the U.S., whether these components are eligible for a duty exemption under subheading 9801.00.10, HTSUS.

ISSUES:

(1) Whether the foreign assembly operations constitute acceptable assembly operations or operations incidental to the assembly process, so as to qualify the U.S.-origin components for a duty allowance under subheading 9802.00.80, HTSUS, when returned to the U.S. incorporated into molds.

(2) Assuming that the U.S.-origin components do not qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, if the cylinders and heating manifolds are disassembled from the mold abroad and returned to the U.S., whether they will qualify for the duty exemption available under subheading 9801.00.10, HTSUS.

LAW AND ANALYSIS:

HTSUS subheading 9802.00.80 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, lubrication, and painting. . .

All three requirements of HTSUS subheading 9802.00.80 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 value of the imported assembled article, less the cost or value of such U.S. components, 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, laminating, 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 HTSUS subheading 9802.00.80 to that component. See 19 CFR 10.16(c).

The operation which consists of securely joining the cylinders and heating manifolds to the mold by means of bolting the components together is considered an acceptable assembly operation. See 19 CFR 10.16(a). Conducting a testing operation to ensure that the sample parts in the mold are correct is considered an acceptable incidental operation pursuant to 19 CFR 10.16(b)(7), which states that final calibration and testing are considered operations incidental to assembly. Therefore, as the U.S. components used in the assembly process will be exported in condition ready for assembly without further fabrication, will not lose their physical identity in the assembled article, and will not be advanced in value or improved in condition except by assembly operations, the returned mold will be eligible for an allowance in duty under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin cylinders and heating manifolds. Since our response to the first issue is in the affirmative, you have stated that it is not necessary for us to address the alternative issue of whether the U.S. components which are disassembled from the mold will qualify for the duty exemption available under subheading 9801.00.10, HTSUS.

HOLDING:

On the basis of the information and diagrams submitted, we conclude that the U.S. components incorporated in the molds do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition except by assembly operations and operations incidental thereto. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. fabricated components incorporated into the molds, when imported into the U.S., provided the documentary requirements of 19 CFR 10.24 are satisfied.

Sincerely,

John Durant, Director
Commercial Rulings Division


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