CLA-2 CO:R:C:V 555559 KAC
Leonard L. Rosenberg, Esq.
Sandler, Travis & Rosenberg, P.A.
Rivergate Plaza
444 Brickell Avenue
Miami, Florida 33131-2470
RE: Applicability of duty exemption under HTSUS subheading
9801.00.10 to contraceptive tablets to be imported from the
Dominican Republic
Dear Mr. Rosenberg:
This is in response to your letter of January 2, 1990, on
behalf of Ayerst-Wyeth Pharmaceutical Caribe, Inc., requesting a
ruling on the applicability of subheading 9801.00.10, Harmonized
Tariff Schedule of the United States (HTSUS), to contraceptive
tablets to be imported from the Dominican Republic. Samples of
the contraceptive tablets and packaging materials were submitted.
FACTS:
Ayerst-Wyeth will be shipping U.S. blister-packaged
contraceptive tablets in 21 or 28 tablet quantities and all of
the necessary packaging materials to the Dominican Republic for
foreign operations. There will be four different variations to
the foreign packaging operations performed on both the 21 and 28
tablet blister packs. The four types of packages are described
as the three compact carton, six envelope refill carton, five
compact dispenser carton, and clinic use pilpack dispenser
carton. A description of the foreign operations performed in
regard to the three compact carton, which is representative of
all of the packaging operations, is as follows:
(1) inspecting the blister-packed contraceptive tablets
for broken or missing tablets, legible print, and
proper regime;
(2) opening the plastic compact and inserting the blister
package;
(3) inserting three different informational pamphlets into
the compact and then closing it;
(4) forming the printed cartons that hold the compacts;
(5) inserting three full compacts along with the Doctor's
instruction pamphlet and then closing the printed
carton;
(6) inspecting the printed carton for correct, legible
print and embossing;
(7) forming the carton packer (plain white box without
printing);
(8) inserting the printed carton into a carton packer;
(9) forming the shipping carton; and
(10) packaging the carton packers into the shipping carton.
After the foreign packaging operations are completed the
contraceptive tablets will be imported into the U.S.
ISSUE:
Whether the contraceptive tablets and packaging materials
will qualify for the duty exemption available under HTSUS
subheading 9801.00.10 when returned to the U.S.
LAW AND ANALYSIS:
HTSUS subheading 9801.00.10 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, HTSUS).
In the instant case, we believe that the foreign operations
performed in the Dominican Republic are simple packaging
operations that do not advance in value or improve in condition
the U.S. contraceptive tablets. Prior to export to the Dominican
Republic, the blister packaged contraceptive tablets are fully
prepared products. In the Dominican Republic, the contraceptive
tablets are merely inserted into compacts or envelopes, various
quantities of which are then placed into printed cartons, which,
in turn, are placed into carton packers and shipping cartons for
shipment to the U.S. Accordingly, as no aspect of the foreign
packaging operations effects an alteration or change in the
contraceptive tablets, they will be eligible for the duty
exemption under HTSUS subheading 9801.00.10.
With respect to the dutiability of the U.S. packaging
materials, General Rule of Interpretation 5(b), HTSUS, 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
repetitive use.
Thus, as the envelopes and various types of cartons in which the
contraceptive tablets are packed are of a kind normally used for
packing such goods and are unsuitable for repetitive use, they
are subject to the same duty rate as their contents, which in
this case is a free rate under HTSUS subheading 9801.00.10.
Because we understand that the U.S. plastic compacts are designed
for repetitive use, they are separately classifiable from their
contents. However, the compacts also are entitled to free entry
under HTSUS subheading 9801.00.10 since they are U.S. products
which are returned without having been advanced in value or
improved in condition while abroad. See Headquarters Ruling
Letter 731806 dated November 18, 1988.
HOLDING:
On the basis of the information and samples submitted, as
the U.S. contraceptive tablets, compacts and other packaging
materials will not be advanced in value or improved in condition
abroad as a result of the foreign operations, they will qualify
for the duty exemption under HTSUS subheading 9801.00.10, upon
compliance with the documentary requirements of 19 CFR 10.1.
Sincerely,
Jerry Laderberg
Acting Director
Commercial Rulings Division