Venetian blinds; repairs or alterations

HQ 562686 May 21, 2003 MAR-2-05 RR:CR:SM 562686 KSG CATEGORY: Classification TARIFF No.: 9802.00.50 John M. Peterson, Esq. Neville Peterson LLP 80 Broad Street-34th Floor New York, NY 10004 RE: Venetian blinds; repairs or alterations Dear Mr. Peterson: This is in reference to your letter dated February 20, 2003, on behalf of Phase II/Furnimex concerning the applicability of subheading 9802.00.50 of the Harmonized Tariff Schedule of the United States ("HTSUS"), to certain venetian blinds. FACTS: Phase II/Furnimex will import certain venetian blinds from various Asian countries into the United States and pay the duties thereon. The blinds are imported into the United States in a standard size, measuring 72 inches in width. In their condition as imported, the blinds are fully functional and could be installed in a window measuring 72 inches in width. You state that few windows are of that exact width. The blinds will then be sent to Mexico to be cut to customized widths and/or lengths in order to satisfy specific dimensions sought by the customer. The customized blinds will then be re-imported into the United States. ISSUE: Whether the re-sized venetian blinds described above are eligible for a duty exemption under subheading 9802.00.50, HTSUS, upon re-importation into the United States. LAW AND ANALYSIS: Subheading 9802.00.50, HTSUS, provides a full or partial duty exemption for articles that are returned after having been exported to be advanced in value or improved in condition by means of repairs or alterations, provided that the documentary requirements of 19 CFR 181.64 (for articles returned from Canada or Mexico) or 19 CFR 10.8 (for articles returned from any other country) are met. Section 181.64(a), Customs Regulations, (19 CFR 181.64(a)), states that: 'Repairs or alterations' means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential character of, or create a new and commercially different good from, the good exported from the United States. In circumstances where the operations abroad destroy the identity of the exported article or create a new or commercially different article, entitlement to subheading 9802.00.50, HTSUS, is precluded. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff’d C.D. 1752, 36 Cust. Ct. 46 (1956); and Guardian Industries Corporation v. United States, 3 CIT 9 (1982). Additionally, entitlement to this tariff treatment is not available where the exported articles are incomplete for their intended purposes prior to their foreign processing and the foreign processing is a necessary step in the preparation or manufacture of the finished articles. Dolliff & Company, Inc. v. United States, 455 F. Supp. 618 (Cust. Ct. 1978), aff’d, 599 F.2d 1015 (CCPA 1979). Customs held in Headquarters Ruling Letter ("HRL") 557161, dated June 28, 1993, that interior wooden shutters sent to Mexico to be stained or painted and lightly sanded were eligible for a partial duty exemption under subheading 9802.00.50, HTSUS, upon re-importation into the United States. In contrast, Customs determined in HRL 555766, dated April 2, 1991, that fabric for venetian blinds sent to Canada to be coated with acrylic and/or cut into strips and returned to the U.S. were not eligible for a partial duty exemption under subheading 9802.00.50, HTSUS, upon re-importation into the United States. Customs reached this conclusion because the coating operation and the cutting into strips changed the characteristics and use of the fabric, creating a new or different article of commerce. We concur with counsel that this case is more similar to cases such as HRL 557161 because the venetian blinds are already finished before being exported to Mexico. As counsel states, the blinds are already suitable for use as window treatment; the blinds are "simply re-sized to fit their specific application." Accordingly, we find that the re-sized venetian blinds are eligible for a duty exemption under subheading 9802.00.50, HTSUS, upon re-importation into the United States. HOLDING: On the basis of the information submitted, cutting the venetian blinds in Mexico to smaller sizes constitutes an acceptable alteration within the meaning of subheading 9802.00.50, HTSUS. Therefore, upon re-importation into the United States, the venetian blinds are entitled to duty-free treatment under subheading 9802.00.50, HTSUS, provided the documentary requirements of 19 CFR 181.64 are satisfied. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Myles B. Harmon Director Commercial Rulings Division