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NY B83541




April 21, 1997

CLA-2-98:RR:NC:347 B83541

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.8065

Ms. Eleanore Kelly-Kobayashi
Rode & Qualey
Attorneys At Law
295 Madison Avenue
New York, NY 10017

RE: U.S. articles assembled abroad.

Dear Ms. Kelly-Kobayashi:

In your letter dated March 24, 1997, you requested a ruling on behalf of your client, Pagoda Trading Company, regarding the applicability of subheading 9802.00.8065, Harmonized Tariff Schedule of the United States (HTS), to U.S. heels assembled and imported in Brazilian footwear.

You state that the United States origin component parts for the "energyheel", which was designed and patented by a U.S. company, are exported to Brazil where they are assembled and combined with other foreign components to create footwear. The "energyheel" works by absorbing forces to the heel when walking, thereby reducing fatigue to the wearer. The heel is simple in construction and has the desirable feature of permitting replacement of the worn lift portion without the need for discarding the entire heel construction. The United States fabricated components which are sent to a factory in Brazil are retainer, end cap, elastomer, spacer, nylon washer, plunger, plunger sleeve and guide pin retainer.

You describe the sequence of operations in the assembly of the "energyheel" as follows:

(1) the heel is molded with the plunger sleeve inserted into high impact polystyrene;

(2) the alignment of the plunger sleeve and hole in the bottom of the heel is checked;

(3) the guide pin retainer is inserted into the bottom of the heel;

(4) the alignment of the guide pin retainer and plunger sleeve is checked;

(5) the plunger is assembled with the elastomer;

(6) the plunger and elastomer are inserted into the plunger sleeve in the bottom of the heel;

(7) the spacer is inserted into the top of the heel;

(8) the end cap is inserted on top of the spacer;

(9) the retainer is inserted on top of the end cap;

(10) the spacer, end cap and retainer are pressed into the top of the heel by machine;

(11) the excess length of the plunger is trimmed to a preset standard;

(12) the height of the plunger is measured against the standard;

(13) the heels are then packed and sent for manufacture into footwear.

At another factory, adhesive is applied to the underside of the top lift and the top lift is attached to the heel with a press machine. You state that the top lift is received by the factory from the United States for attachment to the heel. In addition, Brazilian heel covers are glued to the heel and a polyurethane finish is applied to the heel. The heel is then combined with the upper and other components to create the finished footwear which is exported to the United States.

It is your contention that the processes performed in Brazil constitute an assembly process and the value of the United States fabricated components used in the assembly of the "energyheel" is deductible from the value of the footwear under subheading 9802.00.8065.

Subheading 9802.00.80 (HTS), provides that articles, except goods of heading 9802.00.90, 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 are subject to a duty upon the full value of the imported article, less the cost or value of such products of the United States.

We agree with your contention that the United States fabricated components incorporated into the finished Brazilian footwear are exported in a condition ready for assembly without further fabrication. They have not lost their physical identity by change in form, shape or otherwise. The procedures performed in Brazil consist of joining and fitting various components together and are therefore considered assembly operations for purposes of subheading 9802.00.80.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding this ruling, contact National Import Specialist, Richard Foley at (212) 466-5890.

Sincerely,

Paul K. Schwartz
Chief, Textiles & Apparel Branch

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