NY 852902
JUN 13 1990
CLA-2-52:S:N:N3H:352 852902
Mr. Robert G. Stoner
Springs Industries
Wamusutta/Pacific Home Products
P.O. Box 2000, Pacific Street
Lyman, South Carolina 29365
RE: The tariff classification of 100% cotton printed fabric
which has been woven in the United States and then printed
in Italy.
Dear Mr. Stoner:
In your letter dated May 21, 1990 you requested a tariff
classification ruling.
You indicate that you are contemplating exporting U. S.
manufactured greige 100% cotton woven fabric to Italy where it
will be printed. After printing, you intend to import the
finished fabric and use it in the manufacture of bedding
products. The printed fabric is composed of 100% cotton and has
been woven using a plain weave except that two filling picks are
woven as one. It contains 44.9 single yarns per centimeter in
the warp and 55.1 single yarns per centimeter in the filling. It
is constructed using 45/1 c.c. yarns in the warp and 50/1 c.c.
yarns in the filling. Weighing 139 g/m2, the fabric will be
imported in a variety of widths ranging between 119 and 300
centimeters. Based on the data that you have provided, the
average yarn number for this product has been calculated to be 71
in the metric system.
Your correspondence suggests that you believe that this
transaction may be eligible for partial duty exemption under
subheading 9802.00.50, Harmonized Tariff Schedules of the United
States (HTS). This is not the case. Subheading 9802.00.50, HTS,
provides for a partial duty exemption for articles returned after
having been exported for repairs or alterations. The meaning of
"alteration" for the purposes of this provision has been the
subject of considerable litigation.
United States v. The J. D. Richardson Company, 36 CCPA 15,
CAD 390 (1948) addressed the meaning of the term "alteration" in
paragraph 1615 (g), the predecessor of subheading 9802.00.50,
HTS. The Appeals Court ruled that:
"...it was not intended by the word
"alterations", contained in paragraph 1615
(g) to permit articles, such as in the
instant case, to be exported in an unfinished
condition...and so manufactured abroad that
upon their return would be properly dutiable
as parts of machines."
The concept that the provision for repairs and alterations does
not apply to a continuation of a manufacturing process was
further elucidated in Doliff & Company v. The United States, 78
CCPA 77, CAD 1225 (1979). In this case U.S. produced greige
fabric was exported to Canada where it was converted into
finished fabric by scouring, dyeing, and finishing. The Court
observed that:
"...repairs and alterations are made to
completed articles and do not include
intermediate processing operations which are
performed as a matter of course in the
preparation or the manufacture of finished
articles."
Since the greige fabric you are exporting is unfinished and the
printing that will be performed in Italy is a continuation of the
manufacturing operation to finish the fabric and make it suitable
for its intended purpose, partial duty exemption under
9802.00.50, HTS, is precluded.
It should be noted that since 9802.00.50, HTS, does not
apply to your contemplated transaction, the cost of the greige
goods is part of the dutiable value of the printed fabric that
will be imported from Italy. If the cost of the greige goods is
not included in the invoice price, it must be added to that price
for duty assessment purposes.
The applicable subheading for the printed cotton woven
fabric will be 5208.59.8090, Harmonized Tariff Schedule of the
United States (HTS), which provides for woven fabrics of cotton,
containing 85 percent or more by weight of cotton, weighing not
more than 200 g/m2, printed, other fabrics, other, of number 69
or higher number, other. The rate of duty will be 14.7 percent
ad valorem.
This ruling is being issued under the provisions of Section
177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport