Free entry under subheading 9801.00.10, HTSUS, of parts bags containing U.S.-made components

HQ 555329 June 16, 1989 CLA-2-CO:R:C 555329 RA CATEGORY: Classification TARIFF NO.: 9801.00.10, HTSUS Mr. John W. Cain Cain Customs Brokers Inc. P.O. Box 150 Hildalgo, Texas 78557 RE: Free entry under subheading 9801.00.10, HTSUS, of parts bags containing U.S.-made components Dear Sir: This is in response to your letter of March 10, 1989, regarding the eligibility for free entry as American goods returned under the provisions of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), of certain air conditioner parts of U.S. manufacture packaged in plastic bags in Mexico. FACTS: The Whirlpool Corporation proposes to export U.S.-made parts for its air conditioners to Mexico where they will be placed in plastic bags, weighed, sealed, and labelled before return to the U.S. for sale with the air conditioners and for installation by the purchasers. The three parts bags involved will contain knobs only; screws, nuts, and washers; or knobs; a screw, a washer, and a plastic cup. Labels will be affixed to the bags with a dispenser. ISSUE: Will packaged U.S.-made parts for air conditioners qualify for free entry under the provisions of subheading 9801.00.10, HTSUS? LAW AND ANALYSIS: Subheading 9801.00.10, HTSUS, provides for the free entry of U.S. products exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. The courts have held that the repackaging of U.S.-made articles will not preclude classification as returned American products when there is no change in the value or condition of the articles themselves (apart from the container). U.S. v. John V. Carr & Son, Inc., 69 Cust. Ct. 78, C.D. 4377 (1972), aff'd 61 CCPA 52, - 2 - C.A.D. 1118 (1974), and Border Brokerage Company, Inc. v. U.S., 65 Cust. Ct. 50, C.D. 4052 (1970), appeal dismissed 58 CCPA 165 (1970). In Headquarters Ruling Letter of November 18, 1988, (731806), we held that U.S.-made containers of the kind normally used for packaging may receive the free entry treatment for American goods returned under subheading 9801.00.10, HTSUS, if they meet the criteria for classification under that subheading. Such treatment is not precluded by the process of filling them with their contents. HOLDING: Air conditioner parts made in the U.S. and exported to Mexico for packaging in plastic bags which are then weighed, sealed, and labelled are not considered to have been advanced in value or improved in condition and would be entitled to free entry under subheading 9801.00.10, HTSUS, upon compliance with the requirements of section 10.1, Customs Regulations (19 CFR 10.1). As the parts are of U.S. origin being returned, they may be excepted from country of origin marking requirements, if their immediate containers are properly marked, under section 134.32(m), Customs Regulations (19 CFR 134.32(m)). Sincerely, John Durant, Director Commercial Rulings Division