CLA-2 RR:TC:SM 559363 BLS
TARIFF NOS.: 4202.92.9015, 9802.00.90
Port Director
Box 3130
Laredo, Texas 78044-3130
RE: Eligibility of jewelry boxes for duty-free treatment under subheading
9802.00.90, HTSUS
Dear Sir:
This is in reference to a letter dated June 30, 1995, from Mr. Timothy Casey, of the Chippenhook Corporation, requesting a ruling that certain jewelry boxes imported from Mexico are eligible for duty-free treatment under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS). We understand that shipments are currently being made through your port.
FACTS:
Based on the information submitted by Chippenhook, all of the components used in the assembly of the jewelry box are of U.S.-origin, and the fabric components are cut and formed (woven) in the U.S. A sample of the completed jewelry box and individual components has been submitted. The assembly process in Mexico, as described in the submissions, is as follows:
1) Pads (die-cut foam on a plastic chip) are folded and punched in the pad machine and delivered to the assembly table.
2) The steel shells and fabric are turned through a “wrapper”, a machine which shapes the fabric to the shell, and heats it to activate the glue.
3) A metal hinge and wrapped top and bottom shells are put through a “wringer”, which is a machine which bends the prongs on the shells around the hinge,
making a complete box.
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4) A “puff” (chip back with fabric on the front) is placed in the top of the hinged
box, and the pad in the bottom of the box. The box is then closed and placed in a container.
ISSUE:
Whether the returned jewelry boxes are eligible for duty-free treatment under subheading 9802.00.90, HTSUS, upon return from Mexico.
LAW AND ANALYSIS:
Annex 300-B of the North American Free Trade Agreement (“NAFTA”) is applicable to textile and apparel goods. Appendix 2.4 of Annex 300-B provides that:
[o]n January 1, 1994, the U.S. shall eliminate
customs duties on textiles and apparel goods
that are assembled in Mexico from fabrics wholly
formed and cut in the United States and exported
from and reimported into the United States under:
(a) U.S. tariff item 9802.00.80.10; or
(b) Chapter 61, 62, or 63 if, after such assembly,
those goods that would have qualified for
treatment under 9802.00.80.10 have been subject
to bleaching, garment dyeing, stone-washing, acid-
washing or perma-pressing.
Thereafter, the U.S. shall not adopt or maintain any
customs duty on textile or apparel goods of Mexico
that satisfy the requirements of subparagraph (a) or
(b) or the requirements of any successor provision to
U.S. tariff item 9802.00.80.10.
Consequently, subheading 9802.00.90, HTSUS, was created to provide for the duty-free entry of:
Textile and apparel goods, assembled in Mexico in which
all fabric components were wholly formed and cut in the
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United States, provided that such fabric components, in
whole or in part, (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; provided that goods classifiable in
chapters 61, 62 or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or
perma-pressing after assembly as provided for herein.
The initial question we must address is whether the subject jewelry box is considered a “textile and apparel good” under subheading 9802.00.90, HTSUS.
In this regard, we find that the article is classified under subheading 4202.92.9015, HTSUS, which provides for trunks, suitcases, jewelry boxes and similar containers, with outer surface of textile materials, other, jewelry boxes of a kind normally sold at retail with their containers.
Section 102.21, Customs Regulations (19 CFR 102.21), controls (with certain exceptions not here pertinent) the determination of country of origin of imported textile and apparel products for Customs laws and the administration of quantitative restrictions. This regulation became effective July 1, 1996. Section 102.21(b)(5) (19 CFR 102.21(b)(5)) provides that a textile or apparel product is any good classified in Chapters 50 through 63, HTSUS, and any good classifiable under certain enumerated HTSUS headings or subheadings, including subheading 4202.92.90. Accordingly, the jewelry box is considered a “textile and apparel good” for purposes of determining whether it is eligible for duty-free treatment under subheading 9802.00.90, HTSUS.
Since subheading 9802.00.90, HTSUS, was intended as a successor provision to subheading 9802.00.80, HTSUS, with respect to certain textile and apparel goods assembled in Mexico, the regulations under subheading 9802.00.80, HTSUS, may be instructive in determining whether a good is eligible for the beneficial duty treatment accorded by subheading 9802.00.90, HTSUS. (In this regard, the new statute requires that all fabric components be formed and cut in the U.S., and that only such components (in whole or in part) need be exported from the U.S. in condition ready for assembly without further fabrication.)
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Under section 10.14(a), Customs Regulations (19 CFR 10.14(a)), components may be subject to operations incidental to assembly before, during, or after the assembly with other components. Pursuant to section 10.16(a) of the Customs Regulations (19 CFR 10.16(a)), the assembly operations 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, and may be preceded, accompanied, or followed by operations incidental to the assembly process. Examples of operations incidental to the assembly process are set forth under section 10.16(b), Customs Regulations (19 CFR 10.16(b)). The fifth example provides for adjustments in the shape or form of a component to the extent required by the assembly being performed abroad. See 19 CFR 10.16(b)(5).
As applied to the instant case, we find that folding, gluing, bending and similar processes used to produce the jewelry boxes from formed, die-cut components are acceptable assembly operations or operations incidental to assembly for purposes of determining eligibility of the articles for duty-free treatment under subheading 9802.00.90, HTSUS. Accordingly, the subject jewelry boxes will qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided all fabric components are wholly formed (woven or milled) and cut in the U.S.
HOLDING:
Jewelry boxes assembled in Mexico are classified under subheading 4202.92.9015, HTSUS, which provides for trunks, suitcases, jewelry boxes and similar containers, with outer surface of textile materials, other, jewelry boxes of a kind normally sold with their containers. An article classified under this provision is considered a textile or apparel product. Therefore, since the operations performed in Mexico are acceptable assembly operations or operations incidental to assembly, the imported jewelry boxes will qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided all fabric components are cut and formed in the U.S.
Please provide a copy of this decision to Mr. Timothy Casey, Vice-President, Operations, Chippenhook Corp., 3105 Justin Road, Lewisville, Texas, 75067-3196.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division