CLA-2 CO:R:C:V 555238 DBI
Mr. Jack Ryan
3M Center
P.O. Box 33250
St. Paul, Minnesota 55133-3250
RE: Applicability of subheading 9802.00.80, HTSUS, to certain
diskettes imported from Italy, Japan and Taiwan
Dear Mr. Ryan:
This is in response to your letter dated January 6, 1989,
in which you request a ruling concerning the applicability of
subheading 9802.00.80, Harmonized Tariff Schedules of the United
(HTSUS), to certain diskettes imported from Italy, Japan and
Taiwan.
FACTS:
You advise that your company purchases computer diskettes,
3.5 inches, 5.25 inches and 8 inches, from vendors in Italy,
Japan and Taiwan. The diskettes are made with magnetic media
"cookies" which are manufactured in the U.S. The cookies are
sent to the vendors ready to be inserted into their shells or
envelopes. Before the cookies can be inserted, your company
requires that the cookies undergo a burnishing process which
polishes them and insures that the magnetic coating is smooth and
free of any high spots.
After burnishing, a hub of either metal or plastic is glued
to the center perimeter of the cookie and the cookie is inserted
into its shell or envelope.
It is your position that the burnishing process is
incidental to the assembly process.
ISSUE:
Whether the diskettes, when returned to the U.S., are
eligible for the partial duty exemption in subheading 9802.00.80,
Harmonized Tariff Schedule of the United States (HTSUS).
-2-
LAW AND ANALYSIS:
As you are probably aware, the HTSUS replaced the Tariff
Schedules of the United States (TSUS), on January 1, 1989. Item
807.00, TSUS, was carried over into the HTSUS without change as
subheading 9802.00.80. This provision 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
classified under subheading 9802.00.80, HTSUS, 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(b),
Customs Regulations (19 CFR 10.16(b)), provides that operations
incidental to the assembly process whether performed before,
during, or after assembly, do not constitute further fabrication,
and shall not preclude the application of the exemption.
Section 10.16(c), Customs Regulations (19 CFR 10.16(c)),
provides that any significant process, operation, or treatment
other than assembly whose primary purpose is the fabrication,
completion, physical or chemical improvement of a component, or
which is not related to the assembly process, whether or not it
effects a substantial transformation of the article, shall not be
regarded as incidental to the assembly and shall preclude the
application of the exemption to such article. Section 10.16(c)(5)
specifically lists burnishing as one of the operations,
treatments or processes which imparts significant new
characteristics or qualities to the article affected. Thus, it
is not considered incidental to assembly.
HOLDING:
On the basis of the information submitted, it is our
opinion that the burnishing of the cookies is not an operation
incidental to assembly, and, therefore, no allowances in duty may
be made under subheading 9802.00.80, HTSUS, for the cost or value
of the magnetic media cookie.
Sincerely,
John Durant
Director, Commercial
Rulings Division