HQ 556672

February 25, 1993

CLA-2 CO:R:C:S 556672 CW

CATEGORY: Classification

TARIFF NO.: 9802.00.80

S. Richard Shostak, Esq.

Stein, Shostak, Shostak & O\'Hara

Suite 807

1620 L Street, N.W.

Washington, D.C. 20036-5605

RE: Applicability of partial duty exemption under subheading

9802.00.80, HTSUSA, to carpeting; HRL 555344

Dear Mr. Shostak:

This is in reference to your letter of April 15, 1992, on

behalf of Tuftex Industries, concerning the applicability of a

partial duty exemption under subheading 9802.00.80, Harmonized

Tariff Schedule of the United States Annotated (HTSUSA), to

carpeting created by \"tufting\".

FACTS:

Two carpet types are the subject of this ruling: loop pile

greige carpet, and cut pile greige carpeting. The carpets

consist of two primarily components, nylon yarn and woven backing

material, of U.S.-origin.

The loop pile greige carpeting consists of U.S. woven

backing material which is fed longitudinally into a tufting

(multineedle sewing) machine, where U.S. nylon yarn is then

inserted by a combination of a needle which holds the yarn, and a

looper, which temporarily grabs the yarn after the needle sews it

through the backing to form a loop. After the insertion, the

tufting the carpeting will be returned to the U.S. where it will

be dyed the desired color. After the dyeing process, a binding

agent is applied to the backing of the greige goods to secure the

loops and to facilitate the attachment of a secondary backing.

The manufacture of the cut pile greige carpeting is similar

to the loop pile greige carpeting, except that, following the

insertion of the U.S.-origin yarn into the backing to form the

loop, a knife cuts the top of the loop to form the cut pile. The

cut pile carpeting is returned to the U.S., where it will also be

dyed and a binding agent applied.

-2-

Each of the tufting machines used in the tufting operations

abroad has hundreds of needles, sufficient in gauge and number to

create various densities of greige goods. For each needle in the

machine, a cone of yarn is installed on a rack known as a creel.

The creel allows the cone to unwind freely to feed the tufting

machine in a continuous fashion. The yarn is fed through plastic

tubes that feed into a single needle.

ISSUE:

Whether tufting operations are an acceptable assembly

operation under subheading 9802.00.80, HTSUSA.

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUSA, 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 subheading 9802.00.80, HTSUSA, 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 cost or value of the imported assembled article,

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

upon compliance with the documentary requirements of section

10.24, Customs Regulations (19 CFR 10.24).

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 force fitting, sewing, or the use of fasteners.

In Headquarters Ruling Letter (HRL) 555344 dated May 19,

1989, it was determined that tufting operations similar to the

operations at issue were analogous to weaving operations, and

since weaving operations were considered an unacceptable assembly

operation pursuant to section 10.16(a), Customs Regulations (19

CFR 10.16(a)), a partial duty exemption under subheading

9802.00.80, HTSUSA, was not allowed.

-3-

It is your position that the tufting operations of the

carpeting is not analogous to weaving, rather it is analogous to

sewing. You provide a definition from the Man-made Fiber and

Textile Dictionary that notes that tufting is not a weaving

operation and, moreover, that it is described and recognized as a

sewing process. Specifically, the description of \"tufted carpet\"

provides as follows:

Carpet produced by a tufting machine instead of a loom. It

is an outgrowth of hand-tufted bedspreads. Today, broadloom

tufting machines produce over 90% of all domestic carpeting.

Tufting machines are essentially multineedle sewing machines

which push the pile yarns through a primary backing fabric

and hold them in place to form loops as the needles are

withdrawn\.... Formerly, all carpets were woven, either by

hand or machine\....

Furthermore, you cite E. Dillingham, Inc. v. U.S., 60

C.C.P.A. 40 (1970), in which the Court of Customs and Patent

Appeals held that a needling operation whereby massed fibers and

fabric were shipped to Canada where the fibers were oiled,

carded, and opened, and then needled into the fabric, was an

acceptable assembly operations under item 807.00, Tariff

Schedules of the United States (TSUS), the precursor tariff

provision to subheading 9802.00.80, HTSUSA.

It is Customs position that the tufting operations are more

analogous to sewing-type operations, and, therefore, pursuant to

section 10.16(a), Customs Regulations, would be an acceptable

assembly operations for purposes of subheading 9802.00.80,

HTSUSA. In addition, the holding of the E. Dillingham, case,

whereby a needling operations was an acceptable operation under

item 807.00, TSUS, further supports a finding that the tufting

operations of this case are an acceptable assembly operation

under this program.

Consequently, HRL 555344, pursuant to section 177.9, Customs

Regulations (19 CFR 177.9), shall be revoked as inconsistent with

Customs current position concerning tufting operations.

-4-

HOLDING:

Based on the information provided, it is Customs position

that the tufting operations performed in Mexico, constitute an

acceptable assembly operation pursuant to 19 CFR 10.16(a).

Therefore, a duty allowance may be claimed for the cost or value

of the U.S. materials under subheading 9802.00.80, HTSUSA,

provided that the documentation requirements of 19 CFR 10.24 are

satisfied.

Sincerely,

John Durant, Director