DRA-4-CO:R:C:E 222951 JR
Mr. Stephen L. Bresler
W.J. Byrnes & Co.
P.O. Box 20623
Phoenix, Arizona 85036
RE: Embroidery of wearing apparel; 19 U.S.C. 1313(a); 19 U.S.C.
1313(j)(1).
Dear Mr. Bresler:
This is in response to your ruling request dated January 11,
1991, on behalf of your client, Antiqua Sportswear, Incorporated,
an importer of wearing apparel. Your samples of two knit shirts
one with and one without an embroidered logo are returned with
this ruling.
FACTS:
An importer of foreign made wearing apparel, i.e., knit
shirts, sweaters, pants, and other wearing apparel, would like to
embroider logos on these types of imported garments for overseas
colleges and golf pro shops, export them, and claim a refund of
duties on the original importation.
ISSUE:
Whether imported knit shirts and other wearing apparel, on
which logos are embroidered on the garments in the United States,
qualify for either manufacturing or direct identication same
condition drawback under 19 U.S.C. 1313(a) or 19 U.S.C.
1313(j)(1).
LAW AND ANALYSIS:
A manufacture or production under 19 U.S.C. 1313(a) or (b)
requires that there must be a change or a transformation of an
article; a new and different article must emerge "having a
distinctive name, character or use." See Anheuser-Busch Brewing
Association v. United States, 207 U.S. 556 (1907). In Rolland
Freres, Inc. v. United States, T.D. 47763 (CCPA 1935), a case
involving the embroidering of plain imported dresses, the court
affirmed Customs' finding precluding drawback under 19 U.S.C.
1313(a) and held that, on the facts presented, no manufacture or
production occurred because the embroidering of the dresses did
not transform them within the letter and spirit of the drawback
statute; the dresses were still dresses. The finished articles
were not appreciably different from the imported articles.
From the samples you have submitted, the embroidery of the
shirt does not transform the shirt into a new article, nor has a
new and different article emerged with a distinctive name,
character or use. The shirts remain shirts. Your client,
therefore, would not be entitled to manufacturing drawback under
19 U.S.C. 1313(a) despite the fact that the shirts have been
altered by the embroidery of a logo.
Under 19 U.S.C. 1313(j)(1), known as direct identification
same condition drawback, a refund of duty paid on the imported
merchandise is allowed if that merchandise is exported within
certain time limitations without being used or changed in
condition before exportation. The performance of an incidental
operation on the articles such as (but not limited to) testing,
cleaning, repacking, or inspecting is not considered to be a use
under this provision. The act of embroidery is, however, more
than an incidental operation in this case because it changes the
condition of the imported article from being a plain shirt to one
having a logo and, as such, renders it ineligible for same
condition drawback.
The process of embroidering wearing apparel in this instance
does not comply with either manufacturing (19 U.S.C. 1313(a)) or
same condition (19 U.S.C. 1313(j)(1)) drawback. An operation
which fails to qualify under manufacturing does not, by operation
of such failure, qualify under same condition drawback as both
provisions of the drawback law are not complementary. See C.S.D.
91-18.
HOLDING:
Imported knit shirts and other wearing apparel, on which
logos are embroidered on the garments in the United States,
neither qualify for manufacturing nor direct identification same
condition drawback under 19 U.S.C. 1313(a) or (j).
Sincerely,
John A. Durant
Director, Commercial
Rulings Division