Applicability of partial duty exemption to certain saw blade blanks.

HQ 544108 June 20, 1988 CLA-2 CO:R:C:V 544108DBI CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Howard Soled Allway Tools, Inc. 1513 Olmstead Avenue Bronx, New York 10462 RE: Applicability of partial duty exemption to certain saw blade blanks. Dear Mr. Soled: In your letter of December 4, 1987, you requested a ruling on behalf of Allway Tools, Inc., concerning the applicability of item 807.00, Tariff Schedules of the United States (TSUS; 19 U.S.C. 1202), to certain saw blade blanks to be processed in England and imported by your company. A sample has been submitted for examination. FACTS: In your letter you state that saw blade blanks will be sent to England where a manufacturer will attach an abrasive grit and paint the blanks. The blades will then be imported by Allway Tools, Inc. In your telephone conversation on May 11, 1988, with a member of my staff, you indicated that the abrasive grit will be "welded to the blades with a flux" and that the blades would be painted "for appearance." ISSUE: Whether the described saw blade blanks will be eligible for the partial exemption from duty provided for in item 807.00, TSUS (9802.00.80, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), when imported into the U.S. LAW AND ANALYSIS: Item 807.00, TSUS, applies to articles assembled abroad in whole or in part of fabricated components, the product of the U.S., with no operations performed thereon except the attachment of the components to form the imported merchandise, and - 2 - operations incidental thereto. An article classified under item 807.00, TSUS, is subject to the duty upon the full appraised value of the imported article, less the cost or value of such products of the U.S. Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that assembly operations performed abroad may consist of any method used to join or fit together solid components, such as welding, and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in paragraph (b) of this section. Pursuant to section 10.16(a) the attachment of an abrasive grit by a welding process constitutes an acceptable assembly operation. Section 10.16(b), Customs Regulations (19 CFR 10.16(b)), provides that operations incidental to the assembly process whether performed before, during, or after assembly, do not constitute further fabrication, and shall not preclude the application of the exemption. Pursuant to section 10.16(b), operations which are incidental to the assembly process include the application of a preservative paint or coating, including a preservative metallic coating, lubricants, or protective encapsulation. Section 10.16(c), Customs Regulations (19 CFR 10.16(c)), provides that any significant process, operation, or treatment other than assembly whose primary purpose is the fabrication, completion, physical or chemical improvement of a component, or which is not related to the assembly process, whether or not it effects a substantial transformation of the article, shall not be regarded as incidental to the assembly and shall preclude the application of the exemption to such article. Section 10.16(c) specifically states that painting primarily intended to enhance the appearance of an article shall not be regarded as incidental to assembly. We have previously held in a ruling dated March 7, 1979 (HQ 058865), that allowances may be made for components that are painted for protection only, as against rust, and not to enhance appearance. Such protective painting was considered incidental to assembly. Painting of the saw blade blanks in question for the purpose of appearance is not considered incidental to assembly. - 3 - HOLDING: We are of the opinion that the joining or fitting together of the abrasive grit to the saw blade blanks by a welding operation is considered an acceptable assembly operation. On the basis of the information submitted, allowances in duty may be made under item 807.00, TSUS, for the cost or value for the exported saw blade blanks providing that they are not painted, upon compliance with the applicable Customs Regulations. Sincerely, John Durant, Director Commercial Rulings Division 1cc: CLA-2 CO:R:C:V:DIZZO:SDZ:5/18/88 Mr. Howard Soled Allway Tools, Inc. 1513 Olmstead Avenue Bronx, New York 10462