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HQ 560648




October 27, 1997

CLA-02 RR:CR:SM 560648 RSD

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Bernard R. Nottling
Account Manager
Rudolf Miles and Sons
4950 Gateway East
P.O. Box 11057
El Paso, Texas 79983

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to roll up awnings used in motor homes and travel trailers; cutting to length; sewing; trimming; cutting to a pattern

Dear Mr. Nottling:

This is in response to your letter dated September 19, 1996, on behalf of Dometic Corporation, which requests a ruling concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to certain roll up awnings imported from Mexico. Several fabric samples, photographs depicting steps in the assembly process, and a brochure on the awnings have been enclosed for our examination.

FACTS:

We are informed that Dometic Corporation (hereinafter, "Dometic") plans to import roll up awnings, designed for use with motor homes and travel trailers, from Mexico. The awnings are made of a l00 percent woven polyester fabric. All components used in the assembly of the awnings are of U.S. origin. This includes the U.S. formed polyester awning fabric, bias tape, roller, etc. The components are to be exported into Mexico, where they will be assembled. After assembly and packaging, the awnings will be imported through the port of El Paso, Texas by Dometic and will be sold to recreational vehicle dealers and distributors. You claim that the awnings are classifiable in subheading 6306.12.0000, HTSUS.

The procedures used to assemble the awnings in Mexico are as follows:

1. A fabric roll 15 inches wide is cut to length. The length to which the fabric is cut will vary depending on the model of the awning being made. The lengths generally range from 8 inches to 25 inches depending on the customer order.

2. A second 98 inch wide fabric roll is cut to the same length as the 15 inch roll of fabric.

3. One of the long edges of both the 15 inch wide and 98 inch wide fabric panels are sewn to together. The two (right and left) outside edges of the rectangular shaped awning are hemmed.

4. One long edge of the sewn awning is "trimmed" in order to form a decorative edge while concurrently a bias tape is folded over the cut edge. The bias tape is sewn over the decorative cut edge of the awning.

The function of sewing the bias tape onto the awning is to prevent the awning edge from fraying due to weather conditions. The "trimming", folding of the bias tape, and the sewing of the bias tape of the trimmed edge of the panel is performed simultaneously on a single trimming and sewing machine. You state that even if the decorative "trimming" operation were not performed, it still would be necessary to sew the bias tape onto the awning to prevent the edge from fraying, as a decorative edge cannot be hemmed.

5. The fabric is then assembled onto seven interlocking aluminum slats, rollers, and a return spring to make a complete RV awning. The awning is packaged and imported into the United States by Dometic.

ISSUE:

Whether the fabric used in making the awnings will qualify for the partial duty exemption available under 9802.00.80, HTSUS when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUS, 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, HTSUS, 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 C.F.R. ?10.24).

Section 10.14(a), Customs Regulations {19 C.F.R. ?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 C.F.R. ?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. Section 19 CFR 10.16(b) , Customs Regulations {19 CFR ?10.16(b)} provides examples of operations which are incidental to the assembly process. Trimming, filing, or cutting off small amounts of excess materials are among the examples cited of operations which would be incidental to the assembly process. See 19 CFR 10.16(b)(4).

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, HTSUS, to that component . See 19 CFR 10.16(c). In this regard, the cutting of garment parts according to a pattern is not considered an operation incidental to assembly. {19 CFR 10.16(c)(2)}. Rather, such an operation is considered a further fabrication of the exported garment. (See also 19 CFR 10.14(a), Example 4, exported uncut textile fabrics not considered fabricated components when cut according to a pattern to form garment parts; Headquarters Ruling Letter (HRL) 556099 dated July 31, 1991, involving the cutting and shaping of fabric to form a belt, which was not an acceptable assembly operation or operation incidental to assembly; HRL 557503 dated November 24, 1993, involving the "downsizing" of fabric components, an operation in which the garment components were cut to pattern and shape.)

In this case, the so called "trimming" involves more than a simple removal of a tiny amount of excess fabric from the awning. Based on the sample of the fabric provided, photographs of the operations and displays shown in the Dometic brochure, we believe that this "trimming" operation which creates a decorative edge on the awning fabric is more akin to cutting to a specific pattern. This is demonstrated by the photographs which show that a line is drawn on the fabric for the operator to follow when "trimming" the fabric. This indicates that there is a specific pattern that must be followed in order to create the desired design on the decorative edge of the fabric. The "trimming" of the fabric to create the decorative edge clearly changes the shape and the appearance of the fabric. It also appears that there are several different types of decorative edges which can be created by the "trimming" operation. Although the "trimming" operation is performed at the same time as the sewing of the bias tape, we do not consider it to be an operation incidental to the assembly process, but rather a further fabrication of the affected components because the fabric component is not exported in condition ready for assembly. Accordingly, upon importation, only the fabric panel of the awning on which the "trimming" operation is performed will not be eligible for the duty allowance under subheading 9802.00.80, HTSUS. However, the other components in the awning such as the 15 inch fabric wide panel, bias tape, aluminum slats, rollers, return spring, etc. may still be eligible for the duty allowance under subheading 9802.00.80 provided the documentation requirements set forth in Section 10.24, Customs Regulations, are met to the satisfaction of the port director.

HOLDING:

The "trimming" of the fabric to create a decorative edge is not an operation incidental to assembly, but rather constitutes a further fabrication of the exported fabric components of the awning. Therefore, fabric in the awning, which is "trimmed", will not be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS upon return to the U.S. Provided the documentation requirements of 19 CFR 10.24 are met, the other exported fabric components not subjected to the "trimming" operation may be eligible for a partial duty allowance under subheading 9802.00.80, HTSUS.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director

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