Applicability of partial duty exemption under HTSUSA subheading 9802.00.80 to disposable plastic medical equipment; pressing; screwing; heat sealing; sealing with solvent; gluing; taping

HQ 557044 March 31, 1993 CLA-2 CO:R:C:S 557044 MLR CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Philip Freeman Cain Customs Brokers Inc. Progreso International Bridge P.O. Box 10 Progreso, TX 78579 RE: Applicability of partial duty exemption under HTSUSA subheading 9802.00.80 to disposable plastic medical equipment; pressing; screwing; heat sealing; sealing with solvent; gluing; taping Dear Mr. Freeman: This is in reference to your letter of November 27, 1992, requesting a ruling on behalf of Hospitak, Inc. (located at 1144 Route 109, Lindenhurst, New York 11757), regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), to certain disposable plastic medical equipment. Samples were submitted with your request. FACTS: Hospitak, Inc. plans to import five types of medical equipment which will be assembled in Mexico: Name I. Mask Series: Oxygen mask, high concentration Oxygen mask, med. concentration Oxygen mask, non-rebreathing *Oxygen mask, modified non-rebreathing *Anesthesia mask, adult with valve Anesthesia mask, adult Anesthesia mask, large adult II. Cannula Series: *Oxygen nasal cannula, straight tip *Oxygen nasal cannula, curved tip Oxygen nasal cannula, curved tip III. Nebulizer Series: Medication nebulizer, side draft Medication nebulizer, side draft Medication nebulizer, side draft *Medication nebulizer with reservoir, side draft Medication nebulizer with reservoir, up draft IV. Drainage Bag Series: *Drainage bag for respirator circuit V. Tubing Series: *Oxygen tubing Oxygen tubing The items submitted with the ruling request are marked with an asterisk (*), and they are stated to be representative samples of each product family. Hospitak indicates that the other items in the product family have essentially the same characteristics and assembly process; they only differ in size (i.e., size of mask, length of tubing, etc.). All parts are manufactured in the United States, and the tubing will be cut-to-length in the United States, with the exception of some small trimming necessary in the assembly process. It is stated that tetrahydrofuran, a solvent, will be used to join the plastic parts together. The modified non-rebreathing oxygen mask consists of the following components: six-hole mask, nose clip, 1/4 inch braid, X-bushing, 80 inch oxygen tubing, oxygen "t" connector, rebreath bag, green tape, plain bag, insert label, valve seat, two large flappers, and a small flapper valve. The assembly is described as follows: (1) insert oxygen "t" into neck of bag, and tape edges; (2) press nose clip on mask and attach braid; (3) insert bag into mask; (4) dip one end of the tubing into solvent and insert into bushing; (5) dip other end of tubing into solvent, and put over spout of connector; (6) insert valve seat into connector of bag; (7) attach small flapper valve onto valve seat; (8) press large flappers over side nipples of mask; (9) wind tubing, and package one unit per bag. The anesthesia and respiratory mask consists of the following parts: large anesthesia mask, adult cushion, large collar, plug, stem, bag, insert label, check valve, 7/8 inch .250ID tube, and a 1/5 inch .188ID tube. The assembly is described as follows: (1) insert stem into mask, inflate cushion, glue mask to cushion with solvent, push collar over mask chimney; (2) cut 3/4 inch from stem leaving 1/2 inch; (3) use solvent to put 1/5 inch long piece of 188 tubing over existing stem; (4) insert check valve into tube by first inserting open end of check valve into top of press, then insert 250 tube into openings on bottom of press, pull lever on press down, pressing valve into tube; (5) dip end of 7/8 inch 250 tube into solvent and push over 188 tube; (6) inflate cushion again and plug; (7) package finished mask with label. The medication nebulizer consists of the following components: upmist body, medicine cup, gasket, bullet & jet, short stick, printed bag, X-bushing, 80 inch oxygen tubing, mouthpiece, insert label, upmist tee, 6 inch corrugated tube, and a fitsall connector. The assembly is described as follows: (1) insert bullet & jet and short stick into upmist body; (2) screw medicine cup onto body; (3) dip end of tubing into solvent, then into bushing; (4) dip other end of tubing into solvent, then into fitsall; (5) dip end of upmist tee into solvent, then insert into cuff of corrugated tube; (6) wind tubing and place in bag with upmist body; (7) package one mouthpiece and tee per bag. The nasal cannula consists of the following components: lariat tubing (2 pieces), hose adapter, green bead, nasal cannula, 80 inch oxygen tubing, fitsall connector, and a printed bag for packaging. The assembly is described as follows : (1) use solvent to connect lariat tubing to cannula nare; (2) slide green bead over tubes, and use solvent to connect hose adaptor onto tubing ends; (3) place adaptor end over test nozzle, force dried filtered compressed air through cannula while operator watches gauge; (4) use solvent to connect fitsall to one end of tubing; (5) use solvent to connect other end of tubing to end of cannula hose adaptor; (6) wind tubing and package one per bag. The drainage bag consists of the following components: fixed Y, beaded tie, locking tie, vinyl tape, bag valve, film (.03 lb.), bag for packing, and an insert label. The assembly is described as follows: (1) heat seal drainage bag separately using film and valve in a two step process; (2) insert cuffed neck of fixed Y into neck of drainage bag; (3) pinch film at neck to lessen excess film, and wrap tape around 1 1/2 times where film and Y meet; (4) wrap locking tie around tape with beaded tie threaded through it, tighten locking tie and cut excess off with tie gun; (5) package one per bag and insert label. The oxygen tubing consists of the following components: 80 inch oxygen tubing, X-bushing, printed bag, and a fitsall connector. The assembly is described as follows: (1) dip one end of tubing in solvent, and insert into bushing; (2) dip other end of tubing in solvent, and insert into fitsall; (3) wind tubing and package unit. ISSUE: Whether the disposable plastic medical equipment will qualify for the partial duty exemption under subheading 9802.00.80, HTSUSA, when imported into the United States. 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, lubricating 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 10.14(a), Customs Regulations {19 CFR 10.14(a)}, states in part that: [t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components. 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 welding, soldering, riveting, force fitting, gluing, lamination, sewing, or the use of fasteners. Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operations. See 19 CFR 10.16(a). However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUSA, to that component. See 19 CFR 10.16(c). The processes described above constitute acceptable assembly operations since they securely join solid components together by pressing, screwing, heat sealing, sealing with a solvent, taping, or gluing which are analogous to those operations described in 19 CFR 10.16(a). Trimming the excess material from the locking ties is considered an acceptable operation incidental to the assembly of the drainage bags pursuant to 19 CFR 10.16(b)(4), which states that trimming, filing, or cutting off of small amounts of excess materials is an acceptable incidental operation. Further, testing the nasal cannula is considered an acceptable incidental operation pursuant to 19 CFR 10.16(b)(7), which states that final calibration and testing are considered operations incidental to assembly. Headquarters Ruling Letter (HRL) 554885 dated February 23, 1990, held that joining components together, in part by solvent sealing, to create blood cuff sets constituted an acceptable method of assembly for purposes of HTSUSA subheading 9802.00.80; mechanical testing and visual inspection were also determined to be incidental to the assembly process. Headquarters Ruling Letter 036704 dated May 30, 1975, made allowances under item 807.00, Tariff Schedules of the United States (TSUS) (the precursor of 9802.00.80, HTSUSA), for the assembly of PVC flexible tubing, rubber components, metal cannulas, rubber needle nubs and flashball assembly components into intravenous administration sets and fenwall blood bags. Furthermore, HRL 058632 dated November 14, 1978, made allowances under item 807.00, TSUS, for certain anesthesia breathing circuits which were assembled from 39-inch corrugated soft rubber breathing tubes with swivel arm and T-shaped connectors, a 3-liter conductive bag with bushing, rubber bands, and elbow and "Y" connectors; packing materials (i.e., poly bags and labels) were also admitted free of duty in line with General Headnote 6(b)(i), TSUS, and trimming the ends of the corrugated tubes in order to obtain a leak-free connection with bushings and other connectors was considered incidental to the assembly operation. HOLDING: On the basis of the information and samples submitted, we conclude that the U.S. components in the disposable plastic medical equipment are exported in condition ready for assembly without further fabrication, do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition abroad except by assembly operations and operations incidental thereto. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUSA, for the cost or value of the U.S. fabricated components incorporated into the disposable plastic medical equipment upon their return to the United States, provided the documentary requirements of 19 CFR 10.24 are satisfied. In your letter you also requested that the samples of the plastic medical equipment be returned. As indicated to you in a telephone conversation on March 30, 1993, Customs normally retains samples unless arrangements are made for their return. See 19 CFR 177.2(b)(3). Therefore, as agreed, the samples will not be returned to you. Sincerely, John Durant, Director