Applicability of the partial duty exemptions under subheadings 9802.00.50 and 9802.00.80, HTS, to foamed polyethylene sheet.

NY 893655 January 14, 1994 CLA-2-39:S:N:N6:221 893655 CATEGORY: Classification TARIFF NO.: 9802.00.50; 9802.00.80 Mr. Farrel Barwin Pacific Packaging Inc. #307-20701 #10 Highway Langley, B.C., Canada V3A 5E8 RE: Applicability of the partial duty exemptions under subheadings 9802.00.50 and 9802.00.80, HTS, to foamed polyethylene sheet. Dear Mr. Barwin: In your letter dated December 22, 1993, you requested a tariff classification ruling. Your company imports sheets of foamed polyethylene, measuring 2 inches by 48 inches by 108 inches, which have been made in the United States. In Canada, the sheets are subjected to various operations. Some are cut into 48 strips, each measuring 2 inches by 1 inch by 108 inches. Others are die cut into specific shapes. In other cases, parts may be joined together using hot air. The finished articles are then exported to the United States. You request a ruling as to whether the duty will apply only to the value of the operations performed in Canada. Subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTS), provides a partial duty exemption for articles returned to the United States after having been exported to be advanced in value or improved in condition by means of repairs or alterations. However, the application of this provision is precluded in circumstances where the operations performed abroad result in new or commercially different articles with a set of new and different characteristics and uses, or where the foreign operations would constitute a part of a manufacturing process begun in the United States. The duty allowance for alterations applies only to finished articles. Alterations are made only to completed articles and do not include intermediate operations which are performed in the manufacture of finished articles. Slitting to width or cutting to shape produces such changes in characteristics and use as to exceed an alteration. Thus, the sheets which are cut into 48 narrow strips, or die cut into various shapes, are not eligible for reduced duty treatment in subheading 9802.00.50, HTS. Subheading 9802.00.80, HTS, provides a partial duty exemption for articles 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, lubrication, and painting. Your inquiry does not provide enough information for us to rule whether the parts which are joined together are eligible for the partial duty exemption in subheading 9802.00.80, HTS. Your request for a ruling should include a complete description of the parts as exported from the United States and of all materials used and operations performed on those parts in Canada. This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177). Sincerely, Jean F. Maguire Area Director New York Seaport