HQ 555394

August 15, 1989

CLA-2 CO:R:C:V 555394 GRV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80, HTSUS

Jeffrey A. Meeks, Esq.

Adduci, Mastriani, Meeks & Schill

551 Fifth Avenue

New York, New York 10176

RE: Applicability of partial duty exemption under HTSUS subhead-

ing 9802.00.80 to certain non-woven fabric vanes to be

imported from Taiwan or Thailand.Mast Industries, Inc.

(1981);554920;L\'Eggs Products, Inc., (1989).

Dear Mr. Meeks:

This is in response to your letters of May 12 and July 28,

1989, on behalf of Window Concepts, Inc., requesting a ruling on

the applicability of subheading 9802.00.80, Harmonized Tariff

Schedule of the United States (HTSUS), to certain non-woven

fabric vanes to be imported from Taiwan or Thailand for use as

part of vertical window and door blind systems A sample of a

finished vane to be imported was submitted for examination.

FACTS:

You state that U.S.-made, non-woven fabric vanes, measuring

3 1/2 inches in width, will be exported in rolls of various

lengths to Taiwan or Thailand for processing operations consist-

ing of:

\(1\) measuring and cutting the rolled fabric to the length

required for the particular window blind system;

\(2\) creating pockets at both ends of the cut vane, by fold-

ing the ends of the fabric material over and sewing a

3/4 inch hem at the top and a 2 1/8 inch hem at the

bottom. (In this regard, you state that the upper

pocket produced is for the insertion, by the assembler,

of a plastic hanger card with a hole in it correspond-

ing to a hole to be subsequently punched in the pocket,

whereas the lower pocket produced is for the insertion,

by the consumer, of stabilizing weights.);

\(3\) punching a 1/2 inch hole in the upper pocket for receipt

of a plastic hanger insert which also has a hole punched

in it; and,

\(4\) upon inserting the plastic card and aligning the hole in

the insert card with the 1/2 inch hole punched in the

upper pocket, the relative position of the plastic

insert card is fixed by gluing each end of the pocket

to ensure that the card insert will remain properly

aligned in the pocket.

The fabric vanes are then packaged with an aluminum head-

rail and a nylon cord weight to complete the window blind system

and returned to the U.S.

You maintain that the hole-punching step satisfies the

criteria set forth in United States v. Mast Industries, Inc., 1

CIT 188, 515 F.Supp. 43 (1981), aff\'d, 69 CCPA 47, 668 F.2d 501

(1981), for determining whether an operation is incidental to the

assembly process. In this regard, you state that this step:

\(1\) takes only a fraction of a second, and costs very little in

relation to the cost of the overall assembly operation; (2) is

necessary for the assembly of the PVC hanger card with the vane,

as without corresponding holes in the vane and card, the vanes

could not be attached to the aluminum headrail; and (3) is so

related to the assembly operation that it can only be logically

performed after the sewing step, but prior to the assembly of the

PVC hanger card with the vane, so that the holes in both can be

aligned.

ISSUE:

Whether the returned fabric vanes are entitled to the

partial duty exemption under HTSUS subheading 9802.00.80.

LAW AND ANALYSIS:

HTSUS subheading 9802.00.80 provides a partial duty exemp-

tion for:

\[a\]rticles assembled abroad in whole or in part of fab-

ricated 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, lubricating, 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 a duty

upon the full value of the imported assembled article, less the

cost or value of the U.S. components assembled therein, provided

there has been compliance with the documentation requirements of

section 10.24, Customs Regulations (19 CFR 10.24).

Assembly operations for purposes of HTSUS subheading

9802.00.80 are interpreted at section 10.16(a), Customs

Regulations (19 CFR 10.16(a)), which specifically emunerates

sewing and gluing as acceptable means of assembly. Further, this

section provides that assembly operations may be preceded,

accompanied, or followed by operations incidental to the

assembly.

Operations incidental to the assembly process are not

considered further fabrication, as they are of a minor nature and

cannot always be provided for in advance of the assembly

operation. Examples of operations considered incidental to the

assembly process are delineated at section 10.16(b), Customs

Regulations (19 CFR 10.16(b)), which specifically emunerates

cutting to length of finished components exported in continuous

lengths. When a particular operation is employed that is not

specifically enumerated in the regulation, application of the

criteria specified by the court in United States v. Mast

Industries, Inc., 668 F.2d at 506, is appropriate.

In the Mast case, the court considered the legislative

history of the phrase \"incidental to the assembly process,\" and

found that Congress intended a balancing of all relevant factors

to ascertain whether an operation of a \"minor nature\" was inci-

dental to the assembly process. The court stated that relevant

factors included:

\(1\) whether the relative cost of the operation and time

required by the operator were such that the operation

may be considered \"minor;\"

\(2\) whether the operation is necessary to the assembly

process;

\(3\) whether the operation is so related to assembly that it

is logically performed during assembly; and,

\(4\) whether economic or other practical considerations

dictate that the operations be performed concurrently

with assembly.

In Headquarter Ruling Letter (HRL) 554920 (January 3, 1989),

a vertical blinds case involving similar facts, we stated that

because the plastic hanger to be inserted into the hemmed end of

the fabric would not be permanently fixed by the assembly

process, but would be removable, no allowance could be made for

the value of the plastic hanger under HTSUS subheading

9802.00.80, as no assembly operation occurred. Further, as this

aspect of the foreign operation did not constitute an assembly

operation, the hole-punching at that end of the fabric was

clearly not an operation incidental to assembly and no allowance

in duty could be made for the value of the fabric when returned

to the U.S.

The instant case differs from the above-referenced ruling in

that the position of the plastic hanger in this case is

permanently fixed in relation to the upper pocket of the fabric

by gluing each end of the pocket to ensure that the plastic

insert card remains properly aligned with the hole punched in the

top pocket. Thus, a valid assembly operation is performed and

this may render the hole-punching in this case an operation inci-

dental to the assembly process, if it is found to be a minor

operation as determined by application of the Mast criteria.

In the instant case, the description of the foreign

operation shows that the fabric vanes to be imported will be

eligible for the partial duty exemption available under HTSUS

subheading 9802.00.80. The non-woven fabric vanes are the

product of the U.S. which are exported in rolls of continuous

length. Once abroad, the fabric is cut to length\--an acceptable

incidental operation under section 10.16(b)(6)\--and hemmed at

both ends by sewing\--an acceptable means of assembly under

section 10.16(a). The joining of fabric to itself by sewing has

been held to be an acceptable assembly operation for purposes of

TSUS item 807.00. See, L\'Eggs Products, Inc., v. United States,

13 CIT \_\_\_, 704 F.Supp. 1127 (1989). Applying the Mast criteria

to the information provided, we believe the hole-punching in

this case is a minor operation which falls within the meaning of

an incidental operation. As stated above, permanently enclosing

the plastic insert card in the top pocket of the fabric vane by

gluing both ends of the pocket closed is an acceptable assembly.

Further, an examination of the sample submitted shows that the

non-woven fabric does not lose its physical identity in the

assembly operation, and that it is not otherwise advanced in

value or improved in condition except by assembly operations and

operations incidental thereto. Cf., HRL 554920 (January 3,

1989).

HOLDING:

On the basis of the described foreign operation and after

examining the sample submitted, the non-woven fabric vanes will

be eligible for the partial duty exemption under HTSUS subheading

9802.00.80 when returned to the U.S., upon compliance with the

documentary requirements of 19 CFR 10.24.

Sincerely,

John Durant, Director

Commercial Rulings Division