CLA-2 CO:R:C:V 555399 GRV
Alan G. Lebowitz, Esq.
Grunfeld, Desiderio, Lebowitz & Silverman
12 East 49th Street
New York, New York 10017
RE: Applicability of partial duty exemption under HTSUS subhead-
ing 9802.00.80 to appliqued and/or embroidered slipper vamps
imported as parts of finished slippers
Dear Mr. Lebowitz:
This is in response to your letter of May 19, 1989, on
behalf of R.G. Barry Corporation, requesting a ruling on the
applicability of subheading 9802.00.80, Harmonized Tariff Sched-
ule of the United States (HTSUS) (formerly item 807.00, Tariff
Schedules of the United States (TSUS)), to the sub-assembly of
appliques and/or embroideries on slipper vamps which will be
imported from Mexico as part of finished slippers. Samples of
the slipper vamps showing the various stages of an applique
assembly operation were submitted for examination.
FACTS:
It is proposed that cut-to-shape appliques (generally of
satin fabric) and laminated slipper vamps, thread, and other
slipper components (bottom sole, mid-sole, etc.), all products of
the U.S., will be exported to Mexico where they will be assembled
into finished slippers. You specifically request that we
consider the applicability of HTSUS subheading 9802.00.80 to a
slipper vamp sub-assembly, which is created by sewing appliques
onto the slipper vamps with an embroidery stitch.
Regarding the slipper vamps, you state that they are
composed of three U.S. components: (1) a terrycloth top; (2) a
polyester foam center; and (3) a terrycloth backing. In most
instances, the vamps are assembled in the U.S. by laminating only
two of the components--the terrycloth top and the foam center
materials--with a spray adhesive, and cutting the vamps to shape
in the U.S. The backing material will be separately cut-to-shape
in the U.S. and exported to Mexico for assembly with the other
components. In other instances, all three components are either
laminated or sewn together and cut-to-shape in the U.S.
In Mexico, an outline of the particular applique will be
straight stitched through the various layers of the laminated
vamp component to ensure the proper placement of the applique.
The top surface of the vamp will then be sprayed with an adhesive
to hold the applique in place. The applique will then be posi-
tioned on the vamp and subsequently joined to it by an embroidery
stitch which will penetrate all of the layers of the laminated
vamp component. You state that this type of needlework is util-
ized to prevent the ends of the applique from unraveling and to
enhance the attractiveness of the vamp. Once the slipper vamp
sub-assembly is completed, the other components are assembled to
make the completed slippers which will be imported into the U.S.
You advised a member of my staff by telephone that some of
the slipper vamps will not have appliques attached to them, but
will still be subjected to the embroidery stitching operation.
You ask that we also address the acceptability of this operation
in our ruling. (In this regard, we presume that only those
slipper vamps to which an applique will be attached will be
subjected to the straight stitch outline and spray adhesive
steps.)
You reference prior Customs rulings which hold that embroi-
dery is not an acceptable means of assembly (Headquarters Ruling
Letters 063098 (June 7, 1979) and 071031 (November 12, 1982)),
but submit that the present assembly by embroidery is
distinguishable from those rulings, in that here the embroidery
is more than decorative and, in fact, joins two or more other
components with thread. In any event, you state that these
rulings are no longer valid in view of the recent decision in
L'Eggs Products, Inc., v. United States, Slip Op. 89-5, 13 CIT
____, 704 F.Supp. 1127 (1989). Thus, you argue that merely
embroidering the vamp constitutes an acceptable assembly.
ISSUE:
Whether embroidering the slipper vamps either with or with-
out appliques constitutes an acceptable "assembly" operation for
purposes of HTSUS subheading 9802.00.80.
LAW & 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 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 documentary requirements of
19 CFR 10.24.
The legislative purpose of HTSUS subheading 9802.00.80 is
to encourage the foreign assembly of U.S.-made components. See,
Data General Corporation v. United States, 4 CIT 182 (1982). For
purposes of this tariff provision, the term "assembly" means the
fitting or joining together of fabricated components. C.J.
Tower & Sons of Buffalo, Inc. v. United States, 62 Cust.Ct. 643,
C.D. 3840, 304 F.Supp. 1187 (1969). Examples of acceptable
methods of assembly are delineated at 19 CFR 10.16(a), which
specifically enumerates sewing as a means of assembly.
Sewing is defined in Webster's Third International
Dictionary (1971) as:
...the action or method of one by hand or machine to sew,
which unites, attaches, or fastens by stitches made with a
flexible thread or filament.
The nature of embroidery as a form of sewing was discussed
in Baylis Brothers, Inc. v. United States, 60 Cust.Ct. 336, C.D.
3383, 282 F.Supp. 791 (1968), aff'd, 56 CCPA 115, C.A.D. 964, 416
F.2d 1383 (1969), wherein the court stated that, in common mean-
ing, to embroider an object means to ornament it with needlework
and that the operative feature of embroidery was the ornamental
characteristic of the stitching. Thus, thread used to embroider
is used to ornament and not necessarily to join or fit together
solid components, as required by HTSUS subheading 9802.00.80.
For this reason, we have consistently held that the mere embroi-
dering of fabric does not constitute an acceptable assembly of
components within the meaning of this tariff provision. T.D.
56535(5), 100 Treas.Dec. 803 (1965).
In United States v. Baylis Brothers Company, 64 Cust.Ct.
256, C.D. 3987, 400 F.Supp. 940 (1970), aff'd, 59 CCPA 9, C.A.D.
1026, 451 F.2d 643 (1971), modified, per curiam, 59 CCPA 12, 474
F.2d 1026 (1973), dress fronts with a pattern stencilled on them
were smocked with thread, which gathered the fabric to itself,
thus, creating shirrs. Although smocking did not involve sewing
the precut dress fronts onto other pieces of fabric, the court
found the smocking operation was well within the common meaning
of the term "assembly," since the operation merely consisted in
joining two components (thread and fabric) together according to
a stencilled design.
In the referenced L'Eggs decision, the open tube end por-
tions of pantyhose were sewn closed with thread. In deciding
that the leg blank portions of the pantyhose were entitled to the
duty allowance under TSUS item 807.00, the court explained the
significance of the Baylis decision in the following way:
[t]he thread in Baylis was the joining agent which joined
the fabric of the dress front to itself at predetermined
points. In the present case, the thread joins the tube to
itself by sewing the tube ends closed. As in Baylis, the
thread is a component which serves as the joining agent.
Since the tube closing operation joined two components
together, namely thread and fabric, it is an "assembly" as
the term was applied in Baylis.
In each case, the court held that the foreign operation
constituted an assembly within the meaning of TSUS item 807.00
because the thread served as a joining agent. Thus, whether
thread serves as a joining agent is an important consideration in
determining whether its use in a particular case qualifies as an
acceptable assembly under this tariff provision.
In the present case, although the samples show that the
embroidery is ornamental, in that it serves to decorate the
slipper vamps, we note that the thread used in this manner also
acts as a binding agent, in that it penetrates the two or three
layers of the vamp and serves to keep the center of the vamp from
puckering. Therefore, we agree with you that this constitutes an
important distinction between the facts of this case and those in
previous rulings where we held that embroidering a single layer
of fabric does not qualify as an acceptable assembly operation
for purposes of HTSUS subheading 9802.00.80. Accordingly, we
find that the slipper vamps, either with or without appliques
attached thereto by embroidery, will be eligible for the duty
exemption available under HTSUS subheading 9802.00.80 because the
thread used in the embroidery operation serves to join the
applique to the slipper vamp and, where no applique is attached,
to join the multiple layers of the vamp together at the center.
Similarly, straight-stitching an outline of the applique through
the layers of the vamps also constitutes an acceptable assembly.
HOLDING:
On the basis of the described foreign operation and after
viewing the samples submitted, the slipper vamp components of
the finished slippers, either with or without appliques embroi-
dered on them, are found to be "assembled" abroad, within the
meaning of HTSUS subheading 9802.00.80, as the thread used in the
operation serves as a joining agent. Accordingly, the U.S.
components assembled into the slipper vamp sub-assembly (the
vamp, applique and thread) will be eligible for the duty
exemption under this tariff provision when the slippers are
imported into the U.S., upon compliance with 19 CFR 10.24.
Sincerely,
John Durant, Director
Commercial Rulings Division