Applicability of partial duty exemption under subheading 9802.00.80, HTSUS, to thermal beverage mugs

HQ 557300 August 10, 1993 CLA-2 CO:R:C:S 557300 BLS CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Philip Freeman Cain Customs Brokers Inc. Progreso International Bridge P.O. Box 10 Progreso, Texas 78579 RE: Applicability of partial duty exemption under subheading 9802.00.80, HTSUS, to thermal beverage mugs Dear Mr. Freeman: This is in reference to your letter dated April 23, 1993, on behalf of Zelco Industries, Inc., requesting a ruling that certain beverage mugs to be imported from Mexico qualify for the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS). FACTS: The products described are drinking mugs commonly used for coffee or other beverages, hot or cold. The mugs are made of ABS plastic and pieces of rubber trim on the handle, thumb button, and base (in the case of "Mug 1 + Base"). The mugs are insulated by a sealed airspace, and a spring closure seals the opening when the mug is not being used, to prevent spilling. Two models will be imported at this time: "Mug 1" which has rubber rings on the bottom, and "Mug 1 + Base", which includes a base for the mug to sit in, and which can be used in a car by attaching a bracket that slides under the back of the car seat. A piece of velcro is included in the package, and can be used to fasten the base down. Except for a small o-ring, all parts are made in the United States. The operations to be performed in Mexico are as follows: 1) Two small styrofoam pads are glued to projections on a valve arm. A rubber valve handle cushion is glued to a valve handle (thumb button). 2) The valve handle is put in a holding fixture. A spring is manually placed on the valve handle stem. The top cover piece is slid over the valve handle. An "o" ring is slid over the stem of - 2 - the valve handle. A valve handle piece is placed by hand over the cover piece and valve handle. A screw is driven through the hole in the end of the valve handle stem with an electric screw driver. This cover subassembly is placed in a holding fixture and a stamping press flares the two plastic nubs on the valve arm, holding it to the cover. The cover assembly is put into a ultrasonic welding machine. A plastic ring known as the gasket support is placed on the cover subassembly, and it is welded to the cover. A rubber cover gasket is then slid around the gasket support. This completes the cover assembly. 3) In the next step, the cup body is placed onto the ultrasonic welding fixture. A plastic base is placed over the cup body, and is welded to the body. A handle elbow is then welded over the cup's handle manually. A rubber bottom cushion ring is glued to the cup bottom using adhesive "Fusion 513". The cup body subassembly and the cover subassembly are then fitted together by hand. 4) Next, the rubber cup holder base is fitted over the plastic cup holder. A plastic piece called the velcro bracket has a piece of velcro attached to it. The mug, holder, bracket, velcro pieces, and cup holder arm are then packaged along with an instruction sheet for export. LAW AND ANALYSIS: Subheading 9802.00.80, HTSUS, 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, HTSUS, 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 value of the imported assembled article, less the cost or value of such U.S. components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24). - 3 - 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 operations performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners. We find that the various operations performed in Mexico to create the beverage mugs, which involves securely joining the components together by gluing, welding, and screwing, are considered acceptable assembly operations pursuant to section 10.16(a), Customs Regulations (19 CFR 10.16(a)). HOLDING: On the basis of the information presented, it is our opinion that the operations performed to create the thermal mugs are acceptable assembly operations within the meaning of subheading 9802.00.80, HTSUS. Therefore, the thermal mugs are eligible for the partial duty exemption under that provision, upon compliance with the documentary requirements of 19 CFR 10.24. No duty allowance may be allowed for the cost or value of the foreign origin o-ring. Sincerely, John Durant, Director Commercial Rulings Division