HQ 555592
October 18. 1990
CLA-2 CO:R:C:V 555592 KCC
Mr. Alex Romero, Jr.
A.F. Romero & Co., Inc.
477 Railroad Blvd.
P.O. Box 989
Calexico, California 92231-0989
RE: Applicability of duty exemption in subheading 9801.00.10,
HTSUS, to "Successful Gardening Kit" to be imported from
Mexico.Set; packaging; Superscope; 554935
Dear Mr. Romero:
This is in response to your letter dated October 20, 1989,
requesting a ruling on the applicability of subheading
9801.00.10, Harmonized Tariff Schedule of the United States
(HTSUS), to the "Successful Gardening Kit" to be imported from
Mexico. We regret the delay in responding.
FACTS:
The "Successful Gardening Kit" consists of the following
items:
(1) an unfilled ring binder of Chinese origin having a
paperboard cover;
(2) four sets of shrink-wrapped pages of U.S. origin
(printed with pictures and text about plant and
flower growth); and
(3) scissors of Taiwanese origin.
All three items will merely be packaged together in Mexico in a
printed, corrugated paperboard mailing carton, after which the
packaged kit will be imported into the U.S.
In Headquarters Ruling Letter (HRL) 085205 dated September
27, 1989, we held that the "Successful Gardening Kit" qualifies
as a set under General Rule of Interpretation (GRI) 3(b), HTSUS,
and, therefore, is classifiable under the HTSUS heading
applicable to the item of the set which gives the set its
essential character. As we determined that the essential
character of the set is imparted by the U.S. printed pages, we
concluded that the set is classified under subheading 4901.99.00,
HTSUS (printed books, printed matter; other).
Considering that the item in the set imparting its essential
character is of U.S. origin, you ask whether the entire set
should be entitled to HTSUS subheading 9801.00.10 treatment,
rather than just the printed pages.
ISSUE:
Whether the "Successful Gardening Kit", or any part thereof,
will qualify for the duty exemption available under HTSUS
subheading 9801.00.10 when returned to the U.S.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUS, provides for the free entry of
U.S. products that are exported and returned without having been
advanced in value or improved in condition by any means while
abroad, provided the documentary requirements of section 10.1,
Customs Regulations (19 CFR 10.1), are met. In Superscope, Inc.
v. United States, 13 CIT , 727 F.Supp. 629 (CIT 1989), the
court found that glass panels of U.S. manufacture that were
exported, packaged with other components to make unassembled
stereo cabinets, and then imported into the U.S. as an entirety
were not advanced in value or improved in condition while abroad,
but were merely repackaged. Therefore, the court held that the
glass panels were entitled to duty free entry under item 800.00,
Tariff Schedules of the United States (TSUS) (the precursor
provision to subheading 9801.00.10, HTSUS).
You contend that the "Successful Gardening Kit" should enter
the U.S. duty free under subheading 9801.00.10, HTSUS, as the kit
is a set with the essential character imparted by the U.S.
printed pages. Your contention is based on HRL 554935 dated
April 10, 1989, in which we found that a dialysis kit containing
foreign and U.S. items and classified as a set according to GRI
3(b), HTSUS, would be entitled to duty-free entry if the item
which gives the set its essential character is entitled to free
entry under subheading 9801.00.10, HTSUS. However, we stated
that if the item imparting the essential character is not
entitled to classification under subheading 9801.00.10, HTSUS,
then free entry under this provision for the set or any other
part is precluded.
U.S. Note 1, Chapter 98, HTSUS (the chapter encompassing
special classification provisions, including subheading
9801.00.10, HTSUS), provides as follows:
The provisions of this chapter are not subject to the rule
of relative specificity in general rule of interpretation
3(a). Any article which is described in any provision in
this chapter is classifiable in said provision if the
conditions and requirements thereof and any applicable
regulations are met. (Emphasis added).
The "conditions and requirements" of subheading 9801.00.10,
HTSUS, are (1) that the article be a product of the U.S.; and (2)
that it not be advanced in value or improved in condition by any
means while abroad. Granting duty-free treatment under this
provision to items in a set (e.g., foreign-made items) which do
not meet these "conditions and requirements" would clearly
contravene the plain meaning and intent of the referenced U.S.
Note. We believe there is no question that the application of
GRI 3(b) was never intended to result in granting American goods
returned status to foreign-made materials or components in a set
or mixed or composite goods. Therefore, HRL 554935 is modified
accordingly.
With respect to the "Successful Gardening Kit" containing
the U.S. printed pages, the operations performed abroad consist
merely of repackaging the U.S. product with the foreign items.
As the packaging of the U.S. item with the other items does not
advance in value or improve in condition the U.S. printed pages,
the portion of the "Successful Gardening Kit" consisting of the
U.S. product will be eligible for the duty exemption under
subheading 9801.00.10, HTSUS. Therefore, the "Successful
Gardening Kit" will be dutiable on its full value at the rate
found in subheading 4901.99.00, HTSUS, with a classification
allowance for the cost or value of the U.S. printed pages. This
assumes that the documentation requirements of 19 CFR 10.1 are
met and that the district director of Customs at the port of
entry is satisfied of the U.S. origin of each product claimed to
be entitled to this duty exemption.
HOLDING:
On the basis of the information provided, as the U.S.
printed pages, returned as a part of the "Successful Gardening
Kit", will not be advanced in value or improved in condition
while abroad as a result of the packaging operations, the U.S.
printed pages will qualify for the duty exemption under
subheading 9801.00.10, HTSUS, upon compliance with the
documentary requirements of 19 CFR 10.1.
Sincerely,
John Durant, Director
Commercial Rulings Division