CLA-2-CO:R:C 544161 RA
TARIFF NO: 9802.00.80, HTSUS
S. Richard Shostak, Esq.
Stein Shostak Shostak & O'Hara
3580 Wilshire Blvd., Suite 1240
Los Angeles, California 90010-2597
RE: Applicability of subheading 9802.00.80, HTSUS, to certain
assembled diskettes from Mexico
Dear Mr. Shostak:
This is in response to your letters of February 25, 1988,
July 30, 1988, and April 4, 1989, on behalf of Permabyte
Magnetics, requesting a ruling concerning the applicability of
item 807.00, Tariff Schedules of the United States (TSUS) (now
subheading 9802.00.80, Harmonized Tariff Schedule of the United
States (HTSUS)), to certain diskettes assembled in Mexico. You
also request confirmation that these articles are classifiable
in subheading 8523.20.00, HTSUS, and that they may properly be
marked "Assembled in Mexico, Media made in Japan." We regret
the delay in responding to your request.
FACTS:
Components made in the U.S. consisting of flat vinyl
diskette jackets with certain cut or punched out circles, oval-
shaped openings, and holes, plastic hub rings, and printed paper
labels, are exported to Mexico for assembly with a magnetic
floppy disc of Japanese origin. The assembly operations include
folding and gluing the vinyl jackets to form a holder for the
diskettes, burnishing the foreign-made floppy disc, stuffing the
disc into the jacket, closing and sealing the jacket flap,
affixing the hub ring to the disc, labeling by attaching a paper
label, and packing the finished diskettes in a box and applying
shrink wrap.
ISSUE:
Whether the assembled domestic components of the imported
diskettes qualify for tariff treatment under subheading
9802.00.80, HTSUS.
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LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, applies to articles assembled
abroad in whole or in part of fabricated components, the product
of the U.S., with no operations performed thereon except the
attachment of the components to form the imported merchandise and
operations incidental thereto. An article classfied in this
tariff provision is subject to duty upon the full appraised value
of the imported article, less the cost or value of such products
of the U.S.
Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
provides that the assembly operations performed abroad may
consist of any method used to join or fit together solid
components such as force fitting, gluing, etc. In this case, the
jacket is an integral part of the imported article and the
folding and gluing performed on it are qualified incidental
operations within the purview of the statute and section
10.16(a), Customs Regulations (19 CFR 10.16(a)). The permanent
joining of the jacket with the disc and hub ring is considered to
constitute an acceptable assembly operation in view of the
decision in Mattel Inc. v. the United States, C.A.D. 1248, 67
CCPA 74 (1980). In that case the packaging of domestic
phonograph records in envelopes was held to be a qualified
assembly under item 807.00, TSUS.
As we stated in a letter to you dated July 25, 1988
(544092), the burnishing of the Japanese-made media or floppy
disc would not affect the eligibility of the U.S. components for
treatment under subheading 9802.00.80, HTSUS, since the exemption
provided for in this tariff provision applies only to U.S.-made
fabricated components.
The imported diskettes are properly classifiable in
subheading 8523.20.00, HTSUS, which provides for a duty rate of
4.2%.
HOLDING:
On the basis of information and samples submitted, we agree
that the steps taken in assembling the diskettes abroad
constitute a qualified assembly or operations incidental thereto
within the scope of subheading 9802.00.80, HTSUS. Accordingly,
an allowance in duties may be accorded for the value of the
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U.S.-made fabricated components, upon compliance with sections
10.11 through 10.24, Customs Regulations (19 CFR 10.11-10.24).
The imported diskettes are classifiable in subheading 8523.20.00,
HTSUS, and may be marked "Assembled in Mexico, Media made in
Japan."
Sincerely,
John Durant, Director
Commercial Rulings Division