CLA-2 CO:R:C:V 554959 A
Mr. Rodolfo Vela
International Assemblers
324 Candlewood
Laredo, Texas 78041
RE: Applicability of reduced duty treatment for the value of
U.S. components of imported drapes assembled in Mexico.
Dear Mr. Vela:
Your letter of March 1, 1988, requests a ruling concerning
the applicability of item 807.00, Tariff Schedules of the United
States (TSUS), to certain drapes to be assembled in Mexico and
imported into the United States. A sample was submitted for
examination.
FACTS:
You state that components manufactured in the United States,
consisting of pre-cut fabric pieces, 4" wide rolls of crinoline,
spools of thread, metal pins, color tags, metal hangers and paper
sleeves, will be exported to Mexico, where they will be assembled
into drapes to be used in the home, business or otherwise, for
window coverings.
The process of assembly involves folding and sewing a 1 1/4"
hem at each edge of a piece of fabric and a 4" hem at the bottom
of the fabric; crinoline is cut to size (length) and sewn to the
top of the piece of fabric, which is folded to form a hem. Next,
the fabric and crinoline are folded and sewn forming pleats; a
color tag is sewn in one of the pleats, and metal pins are
inserted by piercing through the fabric and crinoline. After the
drape is finished, it is inspected, folded, hung on a metal
hanger, and a paper sleeve is wrapped around the drapes and a
color tag stapled to the hanger to identify the product.
ISSUE:
Whether the drapes described above will be eligible for the
reduced duty treatment provided for in item 807.00, TSUS
(9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS)), when imported into the United States.
- 2 -
LAW AND ANALYSIS:
Item 807.00, TSUS (19 U.S.C. 1202), applies to articles
assembled abroad in whole or in part of fabricated components,
the product of the United States, with no operations performed
thereon except the attachment of the components to form the
imported merchandise, and operations incidental thereto. An
article classified under item 807.00, TSUS, is subject to the
duty upon the full appraised value of the imported article, less
the cost or value of such products of the United States.
Sections 10.11-10.24, Customs Regulations (19 CFR 10.11-
10.24), set forth definitive and interpretative regulations
pertaining to the construction of item 807.00, TSUS, and related
provisions of law. 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, (including sewing, or the use of fasteners), and may
be preceded, accompanied, or followed by operations incidental to
the assembly as illustrated in paragraph (b) of that section.
The 1 1/4" hem sewn at the edges of the fabric and the 4"
hem sewn at the bottom do not constitute assembly operations
because the fabric is joined to itself rather than another
component. The necessity for such hemming demonstrates that the
curtain fabric was not in condition ready for assembly with other
components at the time of exportation, as the statute requires,
nor is the hemming considered incidental to any subsequent
assembly.
While the joining of the stiffening crinoline strip to the
top of the fabric would, by itself, be an acceptable assembly
operation (the top hem being created incidental to that
operation), the subsequent pleat-making operation is a completely
separate process and constitutes a non-incidental, non-assembly
manufacture/fabrication which advances in value both the curtain
fabric and crinoline (which are then an assembled unit).
Consequently, the otherwise valid assembly of the crinoline to
the curtain fabric is thereby invalidated for 807.00 purposes.
The pleating, addition of pins and color tags are neither
assembly operations nor incidental to an assembly. U.S. v. Mast
Industries, Inc., 668 F. 2d 501 (1981), 69 CCPA 47.
- 3 -
HOLDING:
On the basis of the samples and information submitted, no
allowance in duty may be made under item 807.00, TSUS, for the
cost or value of the described U.S. fabricated components that
are exported to Mexico and assembled into the imported drapes.
Sincerely,
John Durant, Director
Commercial Rulings Division
1cc: CO:R:C:V:JATWOOD:LDC:8/02/88
Mr. Rodolfo Vela
International Assemblies
324 Candlewood
Laredo, TX 78041