CLA-2 CO:R:C:S 557394 WAW
Ms. Pamela Dunn
Advance Tool, Inc.
1590 99th Lane N.E.
Blaine Industrial Square
Blaine, MN 55449
RE: Applicability of the partial duty exemption under subheading
9802.00.80, HTSUS, or subheading 9810.00.10, HTSUS, for
plastic injection molds; assembly; bolting; testing
Dear Ms. Dunn:
This is in response to your letter dated May 28, 1993,
requesting a ruling on the applicability of the partial duty
exemption under subheading 9802.00.80, Harmonized Tariff Schedule
of the United States (HTSUS) or, in the alternative, subheading
9801.00.10, HTSUS, to plastic injection molds from Taiwan. You
have provided a blueprint of the Drop Tube Base, as an example of
one of the molds that you plan to import into the U.S., for our
review.
FACTS:
You state that Advance Tool purchases manufactured cylinders
and heating manifolds of U.S.-origin and then, separately exports
the components necessary to produce a certain type of mold to
Taiwan. In Taiwan, the mold manufacturer assembles the individual
components into the finished mold. You claim that the cylinders
and heating manifolds are sent to Taiwan for testing purposes
only. You also state that the U.S.-origin cylinder and heating
manifold are not re-worked or changed through the assembly and
testing process in any way. These components are sent to Taiwan
for the purpose of testing the mold and checking the parts for
any defects.
You have asked us to address whether an allowance in duty may
be made under subheading 9802.00.80, HTSUS, for the cost or value
of the U.S. components assembled. with the mold, or in the
alternative, if, after the testing is completed, the U.S.
components are disassembled from the molds and shipped into the
U.S., whether these components are eligible for a duty exemption
under subheading 9801.00.10, HTSUS.
ISSUES:
(1) Whether the foreign assembly operations constitute
acceptable assembly operations or operations incidental to the
assembly process, so as to qualify the U.S.-origin components for
a duty allowance under subheading 9802.00.80, HTSUS, when
returned to the U.S. incorporated into molds.
(2) Assuming that the U.S.-origin components do not qualify
for the partial duty exemption under subheading 9802.00.80,
HTSUS, if the cylinders and heating manifolds are disassembled
from the mold abroad and returned to the U.S., whether they will
qualify for the duty exemption available under subheading
9801.00.10, HTSUS.
LAW AND ANALYSIS:
HTSUS subheading 9802.00.80 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, lubrication, 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 such U.S. components, upon compliance with the
documentary requirements of section 10.24, Customs Regulations
(19 CFR 10.24).
Section 10.14(a), Customs Regulations (19 CFR 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 CFR 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, laminating,
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. 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 HTSUS subheading 9802.00.80 to
that component. See 19 CFR 10.16(c).
The operation which consists of securely joining the cylinders
and heating manifolds to the mold by means of bolting the
components together is considered an acceptable assembly operation.
See 19 CFR 10.16(a). Conducting a testing operation to ensure that
the sample parts in the mold are correct is considered an
acceptable incidental operation pursuant to 19 CFR 10.16(b)(7),
which states that final calibration and testing are considered
operations incidental to assembly. Therefore, as the U.S.
components used in the assembly process will be exported in
condition ready for assembly without further fabrication, will not
lose their physical identity in the assembled article, and will not
be advanced in value or improved in condition except by assembly
operations, the returned mold will be eligible for an allowance in
duty under subheading 9802.00.80, HTSUS, for the cost or value of
the U.S.-origin cylinders and heating manifolds. Since our response
to the first issue is in the affirmative, you have stated that it
is not necessary for us to address the alternative issue of whether
the U.S. components which are disassembled from the mold will
qualify for the duty exemption available under subheading
9801.00.10, HTSUS.
HOLDING:
On the basis of the information and diagrams submitted, we
conclude that the U.S. components incorporated in the molds do not
lose their physical identity in the assembly operation, and are not
advanced in value or improved in condition except by assembly
operations and operations incidental thereto. Therefore, allowances
in duty may be made under subheading 9802.00.80, HTSUS, for the
cost or value of the U.S. fabricated components incorporated into
the molds, when imported into the U.S., provided the documentary
requirements of 19 CFR 10.24 are satisfied.
Sincerely,
John Durant, Director
Commercial Rulings Division