CLA-2 CO:R:C:V 555624 DSN
Mr. L. Klestadt
Vice President
Trans-World Shipping Corp.
53 Park Place
New York, New York 10007
RE: Applicability of subheading 9801.00.10, HTSUSA, to sample
fragrance pouches
Dear Mr. Klestadt:
This is in reference to your letter of March 27, 1990, on
behalf of Aredien Corp., requesting a ruling on the applicability
of subheading 9801.00.10, Harmonized Tariff Schedule of the
United States Annotated (HTSUSA), to certain sample fragrance
pouches imported from France. Samples were submitted for
examination.
FACTS:
Your client will ship U.S.-produced perfumes, toilet water
and lotion in bulk to France, whereupon they will be separately
repackaged into sample pouches of foreign origin. The filled
pouches will be exported to the U.S. where they will be
distributed to potential buyers for advertising purposes.
The pouches are composed of either polyethelene sheets
laminated to aluminum foil, or paper and polyethelene sheets
laminated to aluminum foil. You state that the value of the
fragrances exceed the value of the packing.
You specifically ask whether the contents of the sample
fragrance pouches are eligible for subheading 9801.00.10,
HTSUSA, treatment. In addition, you ask whether the sample
pouches are considered ordinary containers, entitled to duty-free
treatment along with their contents.
ISSUE:
Whether the sample fragrances will qualify for treatment
under subheading 9801.00.10, HTSUSA, when returned to the U.S.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUSA, 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 United
States v. John V. Carr & Sons, Inc., 69 Cust. Ct. 78, C.D. 4377,
347 F. Supp. 1390 (1972), 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225
(1974), the court stated that absent some alteration or change in
the item itself, the mere repackaging of the item, even for the
purpose of resale to the ultimate consumer, is not sufficient to
preclude the merchandise from being classified under item 800.00,
Tariff Schedules of the United States (TSUS) (the precursor to
subheading 9801.00.10, HTSUSA).
Therefore, the U.S. perfumes, toilet water, and lotion,
which are exported to France and merely packaged in sample
pouches are not considered to have been advanced in value or
improved in condition for purposes of subheading 9801.00.10,
HTSUSA. As a result, these articles will be exempt from duty
under this tariff provision when they are returned to the U.S.,
provided the documentation requirements of 19 CFR 10.1 are
satisfied.
With respect to whether the sample pouches themselves will
be subject to duty, General Rule of Interpretation 5(b), HTSUSA,
provides that:
...packing materials and packing containers entered with
the goods therein shall be classified with the goods if
they are of a kind normally used for packing such goods.
However, this provision does not apply when such packing
materials or packing containers are clearly suitable for
repetititve use.
Therefore, the value of a non-reusable container normally used
for packing such goods is considered a part of the value of its
contents and is dutiable at the rate of its contents.
In this case, since the pouches are of the kind normally
used for packaging fragrance samples, and these pouches are not
suitable for reuse, the value of the pouches is considered a
part of the value of its contents and is dutiable at the rate of
its contents (a free rate).
HOLDING:
The bulk fragrances that are exported and merely packaged
into sample pouches will receive duty-free treatment under
subheading 9801.00.10, HTSUSA, upon their return to the U.S.,
assuming compliance with the documentation requirements of 19 CFR
10.1. The foreign-made pouches also will be free of duty under
this tariff provision.
Sincerely,
Jerry Laderberg
Acting Director
Commercial Ruling Division