Classification of self adhesive index tabs assembled from U.S. origin materials

HQ 555201 April 11, 1990 CLA-2 CO:R:C 555201 RA CATEGORY: Classification TARIFF NOS: 9802.00.80, 3926.10.00, or 9801.00.10, HTSUS Richard G. Seley Rudolph Miles & Sons P.O. Box 144 El Paso, Texas 79942 RE: Classification of self adhesive index tabs assembled from U.S. origin materials Dear Sir: This is in response to your letter of November 25, 1988, on behalf of Avery International, relative to the tariff treatment applicable to certain index tabs to be assembled in Mexico from plastic and paper materials of U.S. origin. FACTS: Your client proposes sending rolls of polyester plastic 1 3/16 inch in width (to make the tab exterior), rolls of polyester plastic 1 inch in width (to make the retainer skirt), rolls of 1/4 inch in width pressure sensitive paper tape, and glue to Mexico for assembly into finished index tabs. Paper labels or inserts cut to exact shape and scored for easy separation are also sent to Mexico in the flat and will be only folded and packaged with the tabs. The foreign operations consist of placing the plastic strips and paper tape into a machine where the glue and paper tape would be applied to the 1 3/16 inch wide polyester plastic and the product would be bent, beaded, and cut to length to a profile shape. The plastic retainer skirt is shaped and applied under the tab to prevent the paper labels from falling out in use by the consumer. The finished plastic tabs and paper labels are counted and packed in a rectangular clear plastic hinged box and these units are packaged in cartons and shipping containers, all of U.S. origin. - 2 - ISSUE: Will the paper labels, plastic container, or plastic parts be eligible for free entry as American goods returned and can an allowance be made for the paper tape which is only cut to length before being glued to the tab? LAW AND ANALYSIS: Subheading 9801.00.10, Harmonized Tariff Schedule of the U.S. (HTSUS), provides that products of the U.S. when returned after having been exported may be admitted free of duty if they have not been advanced in value or improved in condition by any process of manufacture or other means while abroad. Based upon your description, the plastic components making up the tabs were manufactured abroad from exported domestic-made strips by means of cutting, beading, and forming and there has been a significant advancement in value and improvement in condition of the plastic raw material. Accordingly, free entry under subheading 9801.00.10, HTSUS, for these components is precluded. The paper labels are unassembled parts of the index tabs and cannot be constructively segregated to obtain separate tariff treatment. Ruling 554059, dated April 9, 1986, held U.S.-made glass shelves imported with a stereo cabinet assembled from foreign parts could not be segregated to obtain free entry as American goods returned. The pressure sensitive tape which before assembly is merely cut to length may be accorded an allowance in duty for its value under the provision of subheading 9802.00.80, HTSUS, for articles assembled abroad, upon compliance with sections 10.11-10.24, Customs Regulations (19 CFR 10.11- 10.24). This provision is applicable only to fabricated components assembled abroad without any processing other than assembly and operations incidental thereto. Accordingly, it would not apply to the plastic parts made by beading, bending, and cutting to shape before being assembled. The plastic container may be returned free of duty under the provisions of subheading 9801.00.10, HTSUS, as a usual container the product of the U.S. returned. The imported index tabs are classifiable under the provisions of subheading 3926.10.00 HTSUS, as other articles of plastics, office or school supplies, at the rate of 5.3 percent ad valorem. - 3 - HOLDING: As plastic imparts the essential character of the index tabs they are classifiable under the provision in subheading 3926.10.00, HTSUS, with an allowance for the value of the pressure sensitive tape under subheading 9802.00.80, HTSUS. The plastic container of U.S. origin is free of duty under subheading 9801.00.10, HTSUS. Sincerely, John Durant, Director Commercial Rulings Division