CLA-2 CO:R:C:V 555394 GRV
Jeffrey A. Meeks, Esq.
Adduci, Mastriani, Meeks & Schill
551 Fifth Avenue
New York, New York 10176
RE: Applicability of partial duty exemption under HTSUS subhead-
ing 9802.00.80 to certain non-woven fabric vanes to be
imported from Taiwan or Thailand.Mast Industries, Inc.
(1981);554920;L'Eggs Products, Inc., (1989).
Dear Mr. Meeks:
This is in response to your letters of May 12 and July 28,
1989, on behalf of Window Concepts, Inc., requesting a ruling on
the applicability of subheading 9802.00.80, Harmonized Tariff
Schedule of the United States (HTSUS), to certain non-woven
fabric vanes to be imported from Taiwan or Thailand for use as
part of vertical window and door blind systems A sample of a
finished vane to be imported was submitted for examination.
FACTS:
You state that U.S.-made, non-woven fabric vanes, measuring
3 1/2 inches in width, will be exported in rolls of various
lengths to Taiwan or Thailand for processing operations consist-
ing of:
(1) measuring and cutting the rolled fabric to the length
required for the particular window blind system;
(2) creating pockets at both ends of the cut vane, by fold-
ing the ends of the fabric material over and sewing a
3/4 inch hem at the top and a 2 1/8 inch hem at the
bottom. (In this regard, you state that the upper
pocket produced is for the insertion, by the assembler,
of a plastic hanger card with a hole in it correspond-
ing to a hole to be subsequently punched in the pocket,
whereas the lower pocket produced is for the insertion,
by the consumer, of stabilizing weights.);
(3) punching a 1/2 inch hole in the upper pocket for receipt
of a plastic hanger insert which also has a hole punched
in it; and,
(4) upon inserting the plastic card and aligning the hole in
the insert card with the 1/2 inch hole punched in the
upper pocket, the relative position of the plastic
insert card is fixed by gluing each end of the pocket
to ensure that the card insert will remain properly
aligned in the pocket.
The fabric vanes are then packaged with an aluminum head-
rail and a nylon cord weight to complete the window blind system
and returned to the U.S.
You maintain that the hole-punching step satisfies the
criteria set forth in United States v. Mast Industries, Inc., 1
CIT 188, 515 F.Supp. 43 (1981), aff'd, 69 CCPA 47, 668 F.2d 501
(1981), for determining whether an operation is incidental to the
assembly process. In this regard, you state that this step:
(1) takes only a fraction of a second, and costs very little in
relation to the cost of the overall assembly operation; (2) is
necessary for the assembly of the PVC hanger card with the vane,
as without corresponding holes in the vane and card, the vanes
could not be attached to the aluminum headrail; and (3) is so
related to the assembly operation that it can only be logically
performed after the sewing step, but prior to the assembly of the
PVC hanger card with the vane, so that the holes in both can be
aligned.
ISSUE:
Whether the returned fabric vanes are entitled to the
partial duty exemption under HTSUS subheading 9802.00.80.
LAW AND ANALYSIS:
HTSUS subheading 9802.00.80 provides a partial duty exemp-
tion for:
[a]rticles assembled abroad in whole or in part of fab-
ricated components, the product of the United States,
which (a) were exported in condition ready for assembly
without further fabrication, (b) have not lost their
physical identity in such articles by change in form,
shape, or otherwise, and (c) have not been advanced in
value or improved in condition abroad except by being
assembled and except by operations incidental to the
assembly process such as cleaning, lubricating, and
painting.
All three requirements of HTSUS subheading 9802.00.80 must be
satisfied before a component may receive a duty allowance. An
article entered under this tariff provision is subject to a duty
upon the full value of the imported assembled article, less the
cost or value of the U.S. components assembled therein, provided
there has been compliance with the documentation requirements of
section 10.24, Customs Regulations (19 CFR 10.24).
Assembly operations for purposes of HTSUS subheading
9802.00.80 are interpreted at section 10.16(a), Customs
Regulations (19 CFR 10.16(a)), which specifically emunerates
sewing and gluing as acceptable means of assembly. Further, this
section provides that assembly operations may be preceded,
accompanied, or followed by operations incidental to the
assembly.
Operations incidental to the assembly process are not
considered further fabrication, as they are of a minor nature and
cannot always be provided for in advance of the assembly
operation. Examples of operations considered incidental to the
assembly process are delineated at section 10.16(b), Customs
Regulations (19 CFR 10.16(b)), which specifically emunerates
cutting to length of finished components exported in continuous
lengths. When a particular operation is employed that is not
specifically enumerated in the regulation, application of the
criteria specified by the court in United States v. Mast
Industries, Inc., 668 F.2d at 506, is appropriate.
In the Mast case, the court considered the legislative
history of the phrase "incidental to the assembly process," and
found that Congress intended a balancing of all relevant factors
to ascertain whether an operation of a "minor nature" was inci-
dental to the assembly process. The court stated that relevant
factors included:
(1) whether the relative cost of the operation and time
required by the operator were such that the operation
may be considered "minor;"
(2) whether the operation is necessary to the assembly
process;
(3) whether the operation is so related to assembly that it
is logically performed during assembly; and,
(4) whether economic or other practical considerations
dictate that the operations be performed concurrently
with assembly.
In Headquarter Ruling Letter (HRL) 554920 (January 3, 1989),
a vertical blinds case involving similar facts, we stated that
because the plastic hanger to be inserted into the hemmed end of
the fabric would not be permanently fixed by the assembly
process, but would be removable, no allowance could be made for
the value of the plastic hanger under HTSUS subheading
9802.00.80, as no assembly operation occurred. Further, as this
aspect of the foreign operation did not constitute an assembly
operation, the hole-punching at that end of the fabric was
clearly not an operation incidental to assembly and no allowance
in duty could be made for the value of the fabric when returned
to the U.S.
The instant case differs from the above-referenced ruling in
that the position of the plastic hanger in this case is
permanently fixed in relation to the upper pocket of the fabric
by gluing each end of the pocket to ensure that the plastic
insert card remains properly aligned with the hole punched in the
top pocket. Thus, a valid assembly operation is performed and
this may render the hole-punching in this case an operation inci-
dental to the assembly process, if it is found to be a minor
operation as determined by application of the Mast criteria.
In the instant case, the description of the foreign
operation shows that the fabric vanes to be imported will be
eligible for the partial duty exemption available under HTSUS
subheading 9802.00.80. The non-woven fabric vanes are the
product of the U.S. which are exported in rolls of continuous
length. Once abroad, the fabric is cut to length--an acceptable
incidental operation under section 10.16(b)(6)--and hemmed at
both ends by sewing--an acceptable means of assembly under
section 10.16(a). The joining of fabric to itself by sewing has
been held to be an acceptable assembly operation for purposes of
TSUS item 807.00. See, L'Eggs Products, Inc., v. United States,
13 CIT ___, 704 F.Supp. 1127 (1989). Applying the Mast criteria
to the information provided, we believe the hole-punching in
this case is a minor operation which falls within the meaning of
an incidental operation. As stated above, permanently enclosing
the plastic insert card in the top pocket of the fabric vane by
gluing both ends of the pocket closed is an acceptable assembly.
Further, an examination of the sample submitted shows that the
non-woven fabric does not lose its physical identity in the
assembly operation, and that it is not otherwise advanced in
value or improved in condition except by assembly operations and
operations incidental thereto. Cf., HRL 554920 (January 3,
1989).
HOLDING:
On the basis of the described foreign operation and after
examining the sample submitted, the non-woven fabric vanes will
be eligible for the partial duty exemption under HTSUS subheading
9802.00.80 when returned to the U.S., upon compliance with the
documentary requirements of 19 CFR 10.24.
Sincerely,
John Durant, Director
Commercial Rulings Division