HQ 554920

January 3, 1989

CLA-2 CO:R:C:V 554920 GRV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80; 807.00

Mr. R. B. McKenny

C. S. Emery & Company, Inc.

P.O. Box 307

Derby Line, Vermont 05830

RE: Applicability of partial duty exemption under HTSUS subhead-

ing 9802.00.80 to certain vertical blinds to be imported

from Canada.

Dear Mr. McKenny:

This is in response to your letter of February 11, 1988, on

behalf of Frontenac Fabrics, Inc., requesting a ruling on the ap-

plicability of subheading 9802.00.80, Harmonized Tariff Schedule

of the United States (HTSUS) (formerly item 807.00, Tariff Sched-

ules of the United States (TSUS)), to certain vertical blinds to

be imported from Canada. Samples of both the fabric rolls to be

exported and the vertical blinds to be imported were submitted

for examination.

FACTS:

You state that rolls of fabric of U.S. origin, measuring

three and half inches wide by approximately 100 yards, will be

exported to Canada for assembly operations consisting of:

\(1\) cutting the rolled fabric to length;

\(2\) punching a one-half inch hole near one end of the

fabric for receipt of a removable plastic hanger

insert;

\(3\) folding the punched end over and sewing a one inch

hem in it to receive the removable plastic hanger

insert; and

\(4\) folding the opposite end over and sewing a two and

a half inch hem in it, the resultant pocket either

containing an inserted metal weight or not.

The completed articles\--vertical blinds\--will then be returned to

the U.S.

ISSUE:

Whether the foreign operation constitutes an \"assembly,\"

thereby entitling the vertical blinds to the partial duty

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exemption under HTSUS subheading 9802.00.80 (item 807.00, TSUS)

when returned to the U.S.

LAW & ANALYSIS:

As you are probably aware, on January 1, 1989, the Harmo-

nized Tariff Schedule of the United States (HTSUS) superseded and

replaced the Tariff Schedules of the United States (TSUS). TSUS

item 807.00 was carried over into the HTSUS without change as

subheading 9802.00.80. This tariff provision provides a partial

duty exemption for articles:

\... 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 with-

out further fabrication, (b) have not lost their physi-

cal 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 assem-

bled and except by operations incidental to the assembly

process such as cleaning, lubricating, and painting.

Under this tariff provision, there is a duty upon the full value

of the imported assembled article less the cost or value of such

U.S. components, provided the documentation requirements of sec-

tion 10.24, Customs Regulations (19 CFR 10.24), are satisfied.

Of importance to the sample fabric material submitted is

the term \"assembled.\" Section 10.16(a), Customs Regulations (19

CFR 10.16(a)), provides that:

The assembly operations performed abroad may consist

of any method used to join or fit together solid com-

ponents, such as welding, soldering, riveting, force

fitting, gluing, laminating, sewing, or the use of

fasteners\....

Court decisions construing the term \"assembly\" have uni-

formly held that the term \"assembly,\" for purposes of TSUS item

807.00, involves the joining or coming together of solids. See,

for example, United States v. Baylis Brothers Co., 59 CCPA 9,

C.A.D. 1026, 451 F.2d 643 (1971). Implicit in this construction

of the term \"assembly\" is that multiple solid components are

joined together in a manner that permanently fixes their

respective positions.

One of the problems presented in the instant case is that

the process of sewing a one-inch hem to the end of the cut fabric

containing the punched hole results in merely joining the fabric

to itself. We have previously ruled that the joining of fabric

to itself rather than to another component is not an acceptable

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assembly operation or an operation incidental to assembly for

purposes of TSUS item 807.00. See Headquarters Ruling Letter

554959 (August 29, 1988). Punching the one-half inch hole in the

fabric also clearly is not an operation which is incidental to

assembly under the circumstances of this case. The operations of

punching the hole in the fabric and sewing the one-inch hem

advance the value and improve the condition of the fabric by

means other than assembly and demonstrate that the fabric was not

in condition ready for assembly with other components at the time

of exportation. As a result, no allowance in duty may be made

for the value of the fabric under HTSUS subheading 9802.00.80

upon importation of the vertical blinds.

Moreover, because the plastic hanger to be inserted into

the end of the fabric with the one-inch hem is not permanently

fixed by an assembly process, but is removable, no allowance may

be made for the value of the plastic hanger under this tariff

provision. However, the process of enclosing a metal weight in

the two and a half inch hem on the other end of the fabric strip

constitutes an acceptable assembly operation since the weight

will be permanently joined to the fabric by the sewing operation.

Therefore, with respect to those vertical blinds which will have

metal weights inserted therein, allowances in duty may be made

for the value of the weights under HTSUS subheading 9802.00.80,

provided the weights are of U.S. origin.

CONCLUSION:

On the basis of the information and samples submitted, no

exemption from duty may be given under HTSUS subheading

9802.00.80 for the value of the U.S. fabric to be exported or for

the value of the plastic hangers. However, in regard to those

vertical blinds to be imported containing metal weights,

allowances in duty may be made under this tariff provision for

the cost or value of the weights if they are of U.S. origin and

the documentation requirements set forth in 19 CFR 10.24 are

satisfied.

Sincerely,

John Durant, Director

Commercial Rulings Division

CO:R:C:V:VILDERS:GRV:10/21/88:12/16/88