CLA-2 CO:R:C:V 555296 DBI
Mr. William J. LeClair
Trans-Border Customs Services
One Trans-Border Drive
P.O. Box 800
Champlain, New York 12919
RE: Applicability of subheadings 9801.00.10 and 9802.00.50,
HTSUS, to certain twine dispensers imported from Canada
Dear Mr. LeClair:
This is in response to your letter dated January 24, 1989,
to the Customs office in Champlain, New York, in which you
request a ruling concerning the applicability of item 800.00,
Tariff Schedules of the United States (TSUS), to certain twine
shipped to Canada to be rewound, inserted into plastic dispensers
and returned. Your letter has been referred to this office for a
response.
FACTS:
You advise that your client, Stanbel Limited, will ship
U.S.-origin twine in bulk on large cones to Canada where it will
be cut to shorter lengths, rewound onto small cardboard tubes,
and inserted into Canadian-made plastic dispensers. The
dispenser comes with a built-in knife blade to cut the twine.
The dispenser with twine is then placed into a cardboard box.
The instructions on the box do not describe the dispenser as
being reusable and it does not appear to be reusable since it
would be difficult to pry open, rewind with twine and reclose.
ISSUE:
Whether the described twine, when returned to the U.S.,
will be eligible for the exemption from duty in subheading
9801.00.00, Harmonized Tariff Schedule of the United States
(HTSUS) (formerly item 800.00, TSUS), or the partial exemption
from duty in subheading 9802.00.50, HTSUS (formerly 806.20,
TSUS).
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LAW AND ANALYSIS:
As you know, the HTSUS replaced the TSUS, on January 1,
1989. Item 800.00, TSUS, was carried over into the HTSUS as
subheading 9801.00.10, and item 806.20, TSUS, was carried over as
subheading 9802.00.50.
Subheading 9801.00.10, HTSUS, provides for the free entry
of articles of U.S. origin which are exported and returned
without having been advanced in value or improved in condition
while abroad.
Subheading 9802.00.50, HTSUS, provides for the assessment
of duty on the value of repairs or alterations performed on
articles returned to the U.S. after having been exported for that
purpose. However, the application of this tariff provision is
precluded in circumstances where the operations performed abroad
destroy the identity of the articles or create new or
commercially different articles. See A.F. Burstrom v. United
States, 44 CCPA 27, C.A.D. 631 (1957); Guardian Industries
Corporation v. United States, 3 CIT 9 (1982).
We have previously held in a ruling dated September 10,
1986 (HQ 554179), that U.S.-origin ribbon that was exported to
Mexico to be cut to length, rewound onto spools and wrapped in
plastic packaging was not eligible for item 800.00, TSUS,
treatment as the cutting to shorter lengths improved the
condition of the ribbon by making it ready for sale upon return
to the U.S. However, we held that since ribbon was exported and
ribbon returned, the foreign processing may be considered an
alteration under item 806.20, TSUS. The imported ribbon was
classified under item 806.20, TSUS, rather than 800.00, TSUS.
The facts in the present case are similar to those in
ruling 554179. The twine is wound onto tubes and packaged in a
dispenser. The foreign processing operations performed abroad do
not destroy the identity of the twine or create new or
commercially different articles. The twine that is returned is
the same as that which is exported to Canada.
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HOLDING:
On the basis of the information submitted, it is our
opinion that the foreign processing may be considered an
alteration as that term is used in subheading 9802.00.50, HTSUS.
Therefore, the returned twine packaged in dispensers is eligible
for the partial duty exemption provided for in that tariff
provision, upon compliance with section 10.8, Customs Regulations
(19 CFR 10.8). The cost or value of the alteration would include
the value of the Canadian-made plastic dispensers pursuant to 19
CFR 10.8(l).
Sincerely,
John Durant
Director, Commercial
Rulings Division