Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to plasterboard; vinyl covered; cut- to-length; gluing

HQ 557842 March 25, 1994 CLA-2 CO:R:C:S 557842 MLR CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. William J. LeClair Trans-Border Customs Services, Inc. One Trans-Border Drive P.O. Box 800 Champlain, NY 12919 RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to plasterboard; vinyl covered; cut- to-length; gluing Dear Mr. LeClair: This is in response to your letter of March 14, 1994, requesting a ruling on behalf of Okaply Industries Ltd., regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to plasterboard that is covered with vinyl in Canada. FACTS: In Headquarters Ruling Letter (HRL) 557804 dated February 17, 1994, we held that U.S.-origin vinyl cover cut to length and width in Canada, before being glued to U.S.-origin plasterboard, was not an operation incidental to the assembly process. You now state that the plasterboard, measuring 4 feet by 8 feet, will be exported to Canada with the vinyl cover in roll form, measuring 51 inches wide and up to 300 meters in length, where the vinyl cover will only be cut to length and glued to one side of the plasterboard. The excess vinyl (1 1/2 inch on each edge of the 4 feet by 8 feet plasterboard) will be wrapped around the edge of the plasterboard sheet. No cutting or other processing will be done to the plasterboard. ISSUE: Whether the vinyl-covered plasterboard will qualify for the partial duty exemption available under subheading 9802.00.80, HTSUS, when returned to 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). In this case, gluing the U.S.-origin vinyl cover to the U.S.-origin plasterboard is specifically considered an acceptable assembly operation pursuant to 19 CFR 10.16(a). Furthermore, cutting the vinyl cover on the rolls to length in Canada is explicitly enumerated as an acceptable operation incidental to the assembly process under 19 CFR 10.16(b)(6). Consequently, the vinyl-covered plasterboard will be eligible for the duty allowance available under subheading 9802.00.80, HTSUS, when returned to the U.S. HOLDING: On the basis of the information submitted, it is our opinion that gluing the U.S.-origin vinyl cover to the U.S.-origin plasterboard is considered a proper assembly operation. Furthermore, cutting the vinyl cover to length in Canada is an acceptable operation incidental to the assembly process. Therefore, the vinyl-covered plasterboard may be entered under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S.-origin plasterboard and vinyl cover, provided the documentary requirements of 19 CFR 10.24 are satisfied. Sincerely, John Durant, Director