Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to AS-1 safety fuse plug

HQ 557744 December 22, 1993 CLA-2 CO:R:C:S 557744 MLR CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Robert B. Mankin President Paramount Die & Machine Products 400 3rd Avenue Brooklyn, New York 11215-0595 RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to AS-1 safety fuse plug Dear Mr. Mankin: This is in reference to your letter of December 22, 1993, requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to AS-1 safety fuse plugs. FACTS: Paramount Die & Machine Products ("Paramount") manufactures safety fuse plugs in the U.S. A major U.S. manufacturer of porcelain miniature lighted villages with facilities in the Far East is planning to purchase Paramount's fuse plugs because fuse protection on all decorative lighting has recently been mandated by Underwriters' Laboratories. In the Far East, the safety fuse plugs will be crimped to an 18 gauge cord which is connected to a light socket. ISSUE: Whether the safety fuse plugs will qualify for the partial duty exemption under HTSUS subheading 9802.00.80, when imported into the U.S. 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 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, HTSUS, to that component. See 19 CFR 10.16(c). The operation of crimping the fuse plugs to the cords is considered an acceptable assembly operation pursuant to 19 CFR 10.16(a) for purposes of subheading 9802.00.80, HTSUS. HOLDING: On the basis of the information submitted, we conclude that the safety fuse plugs do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition except by assembly operations. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the safety fuse plugs upon their return to the U.S., provided the documentary requirements of 19 CFR 10.24 (copy enclosed) are satisfied. Sincerely, John Durant, Director Commercial Rulings Division