CLA-2 CO:R:C:S 557322 MLR
Mr. Lewis Stein
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, N.J. 08933-7002
RE: Applicability of duty exemption under HTSUS subheading
9801.00.10 to dental floss packaged in the Dominican
Republic; blister packaging
Dear Mr. Stein:
This is in reference to your letter of April 30, 1993,
requesting a ruling on the applicability of subheading
9801.00.10, Harmonized Tariff Schedule of the United States
(HTSUS), to dental floss packaged in the Dominican Republic.
FACTS:
In your letter, reference is made to Headquarters Ruling
Letter (HRL) 555183 dated February 15, 1989, where we held that
dental floss on plastic cores in prescribed yardages, plastic
dispensers, and other packaging material, all of U.S. origin,
sent to the Dominican Republic by Johnson & Johnson, were
entitled to duty-free treatment under subheading 9801.00.10,
HTSUS, upon their return to the U.S. After importation into the
U.S., Johnson & Johnson would send the dispenser packs to Puerto
Rico, where they were placed into blister packs which were marked
with the name of the company and its U.S. address.
Johnson & Johnson now plans to move the blister packaging
operation from Puerto Rico to the Dominican Republic. Therefore,
the operations conducted in the Dominican Republic would include
those mentioned in HRL 555183, and the blister packaging
operation.
ISSUE:
Whether the U.S. products (dental floss and packaging
materials) exported to the Dominican Republic, will qualify for
the duty exemption available under subheading 9801.00.10, HTSUS,
when returned to the U.S.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUS, provides for the free entry of
products of the U.S. that have been exported and returned without
having been advanced in value or improved in condition by any
process of manufacture or other means while abroad, provided the
documentary requirements of section 10.1, Customs Regulations (19
CFR 10.1), are met. Some change in the condition of the product
while it is abroad is permissible. However, operations which
either advance the value or improve the condition of the exported
product render it ineligible for duty-free entry upon return to
the United States. Border Brokerage Company, Inc. v. United
States, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165
(1970). In Upjohn Co. v. United States, 623 F. Supp. 1281 (CIT
1985), the U.S. Court of International Trade stated that whether
merchandise is classifiable under item 800.00, Tariff Schedules
of the United States (TSUS) (now subheading 9801.00.10, HTSUS)
depends upon whether the product was advanced in value or
improved in condition while abroad.
It is alleged that the blister packaging operation does not
preclude the duty-free treatment of the items sent to the
Dominican Republic under subheading 9801.00.10, HTSUS. You cite
HRL 555610 dated February 1, 1991, where we held that "lite
stiks" manufactured and foil wrapped in the U.S., exported to
Hong Kong for blister packaging with foreign articles, and
returned to the U.S., qualified for duty-free treatment under
subheading 9801.00.10, HTSUS, because the repackaging operation
did not advance them in value nor improve their condition. This
decision was based on Superscope, Inc. v. United States, 727 F.
Supp. 629 (CIT 1989), where the court found that glass panels of
U.S. origin that were exported, packaged with other foreign
components to make unassembled stereo cabinets, and then imported
into the U.S. as an entirety were not advanced in value or
improved in condition while abroad, but were merely repackaged.
Therefore, the court held that the glass panels were entitled to
duty free entry under item 800.00., TSUS. Although the
Superscope case concerned the TSUS, not the HTSUS, the decision
is believed to be equally applicable to similar situations
arising under the HTSUS, since item 800.00, TSUS, and relevant
Schedule 8, TSUS, headnotes were carried over virtually unchanged
into the HTSUS.
You also cite HRL 555520 dated October 29, 1990, where we
held that U.S.-origin articles included in medical prep kits were
not advanced in value or improved in condition by blister
packaging operations conducted in Mexico. In HRL 555708 dated
September 21, 1990, we also considered U.S.-origin thread and
yarn sent to Taiwan, which were despooled from tubes and rewound
onto small plastic spools. The spools were then packaged in a
blister pack which was marked as a sewing thread assortment. It
was held that only the materials of U.S.-origin used in packaging
the thread and yarn were entitled to free entry under subheading
9801.00.10, HTSUS, because the thread and yarn, by being rewound
onto spools, were advanced in value.
Returning to the case at issue, we have a situation where
the dental floss is packaged in a plastic dispenser which is
placed into a blister pack. As determined in HRL 555183, the
dental floss is not advanced in value or improved in condition by
being inserted into the plastic dispenser. Neither do we find,
based on the cases above, that the dental floss or dispenser is
advanced in value or improved in condition by being placed in a
blister pack. As we stated in HRL 731806 dated November 18,
1988, duty-free treatment provided by subheading 9801.00.10,
HTSUS, extends to an American-made container which is exported
and then reimported with its contents, provided that it meets all
of the criteria for classification within that subheading.
Consequently, we find that the dental floss, plastic dispenser,
and blister packaging are entitled to duty-free treatment under
subheading 9801.00.10, HTSUS. Furthermore, we have held that
foreign stamping or printing of a product to identify the
manufacturer and describe the product does not advance its value
or improve its condition so as to preclude entry under
9801.00.10, HTSUS. See HRL 071449 dated October 17, 1983, and
HRL 555071 dated April 2, 1993. Therefore, the printing of the
company name and its U.S. address will not preclude the blister
packaging from receiving duty-free treatment under this tariff
provision.
HOLDING:
On the basis of the information submitted, as the U.S.
dental floss, plastic dispenser, and blister packaging will not
be advanced in value or improved in condition abroad as a result
of the packaging operation, these items will qualify for the duty
exemption under subheading 9801.00.10, HTSUS, when returned to
the U.S., provided the documentation requirements of 19 CFR 10.1
are satisfied.
Sincerely,
John Durant, Director