CLA-02 RR:CR:SM 560648 RSD
Mr. Bernard R. Nottling
Account Manager
Rudolf Miles and Sons
4950 Gateway East
P.O. Box 11057
El Paso, Texas 79983
RE: Applicability of partial duty exemption under HTSUS
subheading 9802.00.80 to roll up awnings used in motor homes
and travel trailers; cutting to length; sewing; trimming; cutting to a pattern
Dear Mr. Nottling:
This is in response to your letter dated September 19, 1996,
on behalf of Dometic Corporation, which requests a ruling
concerning the applicability of subheading 9802.00.80, Harmonized
Tariff Schedule of the United States (HTSUS), to certain roll up
awnings imported from Mexico. Several fabric samples,
photographs depicting steps in the assembly process, and a
brochure on the awnings have been enclosed for our examination.
FACTS:
We are informed that Dometic Corporation (hereinafter,
"Dometic") plans to import roll up awnings, designed for use with
motor homes and travel trailers, from Mexico. The awnings are
made of a l00 percent woven polyester fabric. All components
used in the assembly of the awnings are of U.S. origin. This
includes the U.S. formed polyester awning fabric, bias tape,
roller, etc. The components are to be exported into Mexico,
where they will be assembled. After assembly and packaging, the
awnings will be imported through the port of El Paso, Texas by
Dometic and will be sold to recreational vehicle dealers and
distributors. You claim that the awnings are classifiable in
subheading 6306.12.0000, HTSUS.
The procedures used to assemble the awnings in Mexico are as
follows:
1. A fabric roll 15 inches wide is cut to length. The
length to which the fabric is cut will vary
depending on the model of the awning being made. The
lengths generally range from 8 inches to 25
inches depending on the customer order.
2. A second 98 inch wide fabric roll is cut to the same
length as the 15 inch roll of fabric.
3. One of the long edges of both the 15 inch wide and
98 inch wide fabric panels are sewn to
together. The two (right and left) outside edges of
the rectangular shaped awning are hemmed.
4. One long edge of the sewn awning is "trimmed" in order to
form a decorative edge while
concurrently a bias tape is folded over the cut edge. The bias
tape is sewn over the decorative cut
edge of the awning.
The function of sewing the bias tape onto the awning is to
prevent the awning edge from fraying due to weather conditions.
The "trimming", folding of the bias tape, and the sewing of the
bias tape of the trimmed edge of the panel is performed
simultaneously on a single trimming and sewing machine. You
state that even if the decorative "trimming" operation were not
performed, it still would be necessary to sew the bias tape onto
the awning to prevent the edge from fraying, as a decorative edge
cannot be hemmed.
5. The fabric is then assembled onto seven interlocking
aluminum slats, rollers, and a return
spring to make a complete RV awning. The awning is
packaged and imported into the United States
by Dometic.
ISSUE:
Whether the fabric used in making the awnings will qualify
for the partial duty exemption available under 9802.00.80, HTSUS
when returned to the U.S.
LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, provides a partial duty
exemption for:
[a]rticles assembled abroad in whole or in part of
fabricated 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 subheading 9802.00.80, HTSUS, must
be satisfied before a component may receive a duty allowance. An
article entered under this tariff provision is subject to duty
upon the full cost or value of the imported assembled article,
less the cost or value of the U.S. components assembled therein,
upon compliance with the documentary requirements of section
10.24, Customs Regulations (19 C.F.R. 10.24).
Section 10.14(a), Customs Regulations {19 C.F.R. 10.14(a)},
states in part that:
[t]he components must be in condition ready for
assembly without further fabrication at the time of
their exportation from the United States to qualify for
the exemption. Components will not lose their
entitlement to the exemption by being subjected to
operations incidental to the assembly either before,
during, or after their assembly with other components.
Section 10.16(a), Customs Regulations {19 C.F.R. 10.16(a)},
provides that the assembly operation performed abroad may consist
of any method used to join or fit together solid components, such
as welding, soldering, riveting, force fitting, gluing,
lamination, sewing, or the use of fasteners.
Operations incidental to the assembly process are not
considered further fabrication operations, as they are of a minor
nature and cannot always be provided for in advance of the
assembly operations. Section 19 CFR 10.16(b) , Customs
Regulations {19 CFR 10.16(b)} provides examples of operations
which are incidental to the assembly process. Trimming, filing,
or cutting off small amounts of excess materials are among the
examples cited of operations which would be incidental to the
assembly process. See 19 CFR 10.16(b)(4).
However, any significant process, operation or treatment
whose primary purpose is the fabrication, completion physical or
chemical improvement of a component precludes the application of
the exemption under subheading 9802.00.80, HTSUS, to that
component . See 19 CFR 10.16(c). In this regard, the cutting of
garment parts according to a pattern is not considered an
operation incidental to assembly. {19 CFR 10.16(c)(2)}. Rather,
such an operation is considered a further fabrication of the
exported garment. (See also 19 CFR 10.14(a), Example 4, exported
uncut textile fabrics not considered fabricated components when
cut according to a pattern to form garment parts; Headquarters
Ruling Letter (HRL) 556099 dated July 31, 1991, involving the
cutting and shaping of fabric to form a belt, which was not an
acceptable assembly operation or operation incidental to
assembly; HRL 557503 dated November 24, 1993, involving the
"downsizing" of fabric components, an operation in which the
garment components were cut to pattern and shape.)
In this case, the so called "trimming" involves more than a
simple removal of a tiny amount of excess fabric from the awning.
Based on the sample of the fabric provided, photographs of the
operations and displays shown in the Dometic brochure, we believe
that this "trimming" operation which creates a decorative edge on
the awning fabric is more akin to cutting to a specific pattern.
This is demonstrated by the photographs which show that a line is
drawn on the fabric for the operator to follow when "trimming"
the fabric. This indicates that there is a specific pattern that
must be followed in order to create the desired design on the
decorative edge of the fabric. The "trimming" of the fabric to
create the decorative edge clearly changes the shape and the
appearance of the fabric. It also appears that there are several
different types of decorative edges which can be created by the
"trimming" operation. Although the "trimming" operation is
performed at the same time as the sewing of the bias tape, we do
not consider it to be an operation incidental to the assembly
process, but rather a further fabrication of the affected
components because the fabric component is not exported in
condition ready for assembly. Accordingly, upon importation,
only the fabric panel of the awning on which the "trimming"
operation is performed will not be eligible for the duty
allowance under subheading 9802.00.80, HTSUS. However, the other
components in the awning such as the 15 inch fabric wide panel,
bias tape, aluminum slats, rollers, return spring, etc. may still
be eligible for the duty allowance under subheading 9802.00.80
provided the documentation requirements set forth in Section
10.24, Customs Regulations, are met to the satisfaction of the
port director.
HOLDING:
The "trimming" of the fabric to create a decorative edge is
not an operation incidental to assembly, but rather constitutes a
further fabrication of the exported fabric components of the
awning. Therefore, fabric in the awning, which is "trimmed",
will not be eligible for the partial duty exemption under
subheading 9802.00.80, HTSUS upon return to the U.S. Provided
the documentation requirements of 19 CFR 10.24 are met, the other
exported fabric components not subjected to the "trimming"
operation may be eligible for a partial duty allowance under
subheading 9802.00.80, HTSUS.
A copy of this ruling letter should be attached to the entry
documents filed at the time the goods are entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division