RR:CR:DR
228825 RND
Mr. Darrell J. Sekin, Jr.
DJS International Services, Inc.
P.O. Box 612785
DFW Airport, Texas 75261
8411 Sterling
Suite 101
Irving, Texas 75063
RE: Subheading 9813.00.05, HTSUS
Dear Mr. Sekin:
This is in response to your letter dated April 20, 2000, requesting a ruling on the eligibility for entry, under a Temporary Importation Bond, in subheading 9813.00.05.20, HTSUS, as articles to be repaired, altered or processed for certain cotton greige goods. Our ruling follows.
FACTS:
Haber Fabrics, Incorporated proposes to import cotton woven greige fabric from both India and Pakistan. The thread count of the fabric is 106 x 54 with 16’s and 12’s denier. The greige is 64 inches and the weight is 8 ounces per square yard. After importation the greige fabric will be sent to conversion factories in Georgia and Massachusetts, where the following operations will be performed on the cotton greige. This fabric will be:
seamed
de-sized, i.e. filler is boiled out
scoured, i.e. washed with chemicals
bleached
dyed
heat set (stabilizes the fabric’s width)
finished (made stiffer or softer to specifications
dark colored fabric will also be cauterized.
Each factory will have a working loss due to shrinkage of the fabric during washing. The heat set process re-stretches the fabric but does not restore it to original size. There is no waste.
ISSUE:
Whether the above-described procedures constitute repair, alteration or processing (including processes which result in articles manufactured or produced in the United States) for purposes of duty-free Temporary Importation Under Bond treatment under subheading 9813.00.05, HTSUS?
LAW AND ANALYSIS:
General Note 1, Harmonized Tariff Schedule of the United States (“HTSUS”), dictates that all merchandise imported into the United States is subject to duty unless specifically exempted therefrom. Subheading 9813.00.05, HTSUS, provides for duty-free entry, under bond, for merchandise imported into the United States, for a temporary period, for repair, alteration, or processing.
Pursuant to U.S. Notes 1(a) and (c) of Subchapter XIII of Chapter 98, HTSUS, which contains subheading 9813.00.05, articles to be repaired, altered or processed, including processes which result in articles manufactured or produced in the United States, may enter into the United States temporarily free of duty under a Temporary Importation Under Bond (TIB) for exportation within one year from the date of importation. This one year period may be extended for one or more additional periods, which when added to the initial period may not exceed three years. See 19 CFR 10.37. The imported merchandise may not be imported for the purpose of a sale or sale on approval.
Based on prior Rulings the procedures described herein do not constitute repair or alteration. Therefore, it is necessary to determine if such actions are processes. Webster’s Third New International Dictionary (unabridged, 1966) defines the verb “process,” in pertinent part, as follows:
process ... to subject to a particular method, system, or technique of preparation, handling, or other treatment designed to effect a particular result: put through a special process: (1): to prepare for market, manufacture, or other commercial use by subjecting to some process ... (2) to make usable by special treatment .…
It is our opinion that the seaming, de-sizing, scouring, bleaching, dyeing, heat setting, finishing and cauterizing of the cotton greige goods as described above falls within the definition of “process” stated above.
In Ruling 224661, dated January 11, 1994, which pertained to subheading 9813.00.05, we stated that “[t]he processing can be a relatively minor procedure or extensive enough to be considered a manufacture or production.” In other rulings involving subheading 9813.00.05, we have held the following to be a “processing:” a melting procedure (HQ citing DB 200149 where we held a freezing procedure to be a processing); cutting and sewing of airline seat covers (HQ 222106); embroidering using an elasticized yarn (HQ 223640); trimming of steel coils to reduce their width and the cutting of edges to certain tolerances (HQ 224283); and sizing and dyeing of hat bodies (HQ 226858).
Based upon the above authorities, we determine that the above-described procedures, as performed on the cotton greige goods, constitute processing within the meaning of subheading 9813.00.05.
As stated, processing may include procedures that transform an article into one that is considered manufactured or produced in the United States. If an article is considered manufactured or produced in the United States, the imported merchandise must be exported or destroyed within one year of the date of importation. This period may also be extended for one or more periods which, when added to the initial one year, do not exceed a total of three years. See 19 CFR 10.37. Further, the merchandise cannot be imported for the purpose of sale (or sale on approval).
Therefore, we must note, however, any processing of the cotton greige goods which amounts to a manufacture or production of articles in the United States must include a complete accounting to the Customs Service for all articles, wastes, or irrecoverable losses resulting from the processing, and all articles and valuable wastes resulting from such processing must be exported or destroyed under Customs supervision within the bonded period. See U.S. Note 2(b) of Subchapter XIII, Chapter 98, HTSUS. Exportation of the articles and valuable wastes must take place within the bond period under Customs supervision.
Moreover, please note that if the cotton greige goods are not exported, they are not eligible for treatment under subheading 9813.00.05. See U.S. Note 1(a) of Subchapter XIII of Chapter 98, HTSUS. In this regard, we note that the letter of April 20, 2000 from Darrell J. Sekin, Jr., of International Services, Inc. does not state that the goods will be exported after processing.
Finally, textiles are permitted duty-free treatment under subheading 9813.00.05, HTSUS, if they are not subject to quota and visa restrictions. 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. The cotton greige fabric may also require a visa for importation.
HOLDING:
Based on the information provided, the procedures described above to which the cotton greige goods will be subjected qualify as a process under subheading 9813.00.05, HTSUS, for temporary admission into the United States, under bond, without the payment of duty.
Sincerely,
John Durant, Director
Commercial Rulings Division