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HQ 228747

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July 31, 2001

CON-9-04
RR:CR:DR 228747 IDL

CATEGORY: ENTRY TEMPORARY IMPORTATION BOND

Wendt & Temples, LLC
Attn: Lynne W. Wendt
The Candler Building
Suite 1303
127 Peachtree St., NE
Atlanta, GA 30303-1800

RE: 9813.00.05 HTSUS; TIB; process; wool fabric cut to pattern

Dear Ms. Wendt:

The merchandise at issue is 100% wool fabric made in Italy, India or Taiwan. Zeeman Manufacturing Co. ("Zeeman") intends to import the woven fabric into the U.S. from Italy, India or Taiwan. After importation, Zeeman will process and cut to pattern the fabric in the U.S. for use in manufacturing men's suits. Zeeman plans to export the cut work to its related factory in Costa Rica for assembly, and return the items to the U.S. The suits would be entered under subheading 9802.00.80, HTSUS, and the corresponding men's suits classification corresponding to the composition of the fabric.

ISSUES:

(1) Whether fabric imported into the U.S. and cut to pattern for men's suits qualifies as a process eligible to enter under a Temporary Importation Bond under subheading 9813.00.05, HTSUS?

(2) Whether importer can claim 9802.00.80 on the fabric when entered into the U.S. for a second time?

Issue (1)
A Temporary Importation Bond, under certain conditions, allows merchandise to be entered into the U.S. temporarily free of duty. The classes of goods entitled to temporary free entry are set forth in the special classification provision of the HTSUS, Chapter 98, Subchapter XIII, Articles Admitted Temporarily Free of Duty under Bond. Subheading 9813.00.05 provides for duty-free importation under bond for merchandise to be... processed in the United States, provided it is not imported for sale or sale on approval and that it is exported or destroyed within one year of the date of importation. (See U.S. Note 1(a) of Subchapter XIII, Chapter 98, Section XXII, HTSUS, and 19 CFR 10.37). The processing can be a relatively minor procedure or extensive enough to be considered a manufacture or production. HQ 224661.

When an importer processes permissible merchandise, which results in an article being manufactured or produced in the U.S., importer shall furnish the Customs Service with a complete accounting for all articles, wastes, and irrecoverable losses resulting from the processing. In addition, importer shall, within the bond period, export or destroy under Customs supervision all such articles and valuable wastes; except that in lieu of exportation or destruction of valuable waste, importer may tender duties on such waste at the rate of duty in effect for such waste at the time of importation. See U.S. Note 2(b) of Subchapter XIII, Chapter 98, Section XXII, HTSUS.

Textiles are permitted duty-free treatment under subheading 9813.00.05, HTSUS, if they are not subject to quota and visa restrictions. Nevertheless, 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. HQ 223640; HQ 555648; 19 CFR 10.31(a) and 132.1.

Customs has allowed entry under subheading 9813.00.05 HTSUS under the following situations: imported rolled aluminum foil processed by cutting, folding, filling, and sealing" (HQ 227976); woven fabric imported from India, processed using an embroidery machine. (HQ 223640); lithograph metal displaying labels imported into the U.S., sheets cut to the size of 9v battery jackets and applied to the individual 9v batteries. (HQ 224246); imported fabric used for cutting and sewing in airline seat covers. (HQ 222106).

In the instant case, 100% wool fabric imported into the U.S. and cut to pattern for men's suits results in a process which qualifies such articles to enter under TIB, subheading 9813.00.05, HTSUS.

Issue (2)
The importer had indicated that it intended to enter the fabric under 9802.00.80, HTSUS upon entry into the U.S. for a second time. Entry under 9802.00.80 addresses assembly abroad of U.S. components, including conditions pertaining to exportation. Importer has since renounced its intention to enter under the "American Goods Returned" subheading. During a telephone conversation with the Office of Regulations and Rulings, counsel for Zeeman acknowledged that importer may not enter the fabric under 9802.00.80 upon entry for a second time, and that its request for ruling should be limited to the applicability of 9813.00.05 on the initial importation.

Based upon counsel's retraction, we will not further address this issue.

HOLDING:

Cutting to pattern of the fabric for men's suits qualifies as a process eligible to enter under a Temporary Importation Bond under subheading 9813.00.05. The issue of whether importer can claim 9802.00.80 on the fabric when entered into the U.S. for a second time is moot.

Sincerely,

John A. Durant, Director
Commercial Rulings Division

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See also:

• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9813.00.05 - Articles to be repaired, altered or processed (including processes which result in articles manufactured or produced in the United States)