CBP Ruling H125795

HQ H125795 May 18, 2011 CLA-2 OT:RR:CTF:VS H125795 HkP CATEGORY: Classification Rachael Goding, Esq. International Automated Brokers, Inc. 1655 St. Andrews Cove San Diego, CA 92154 RE: Modification of NY N041522; Tariff Classification and Eligibility for a Partial Duty Exemption under subheading 9802.00.80, HTSUS, for certain Men's Knit Garments Dear Ms. Goding: This letter concerns New York Ruling Letter (NY) N041522, issued to you on November 14, 2008, on behalf of your client Aquasea, Inc., by the National Commodity Specialist Division, U.S. Customs and Border Protection (CBP). At issue in that ruling was the tariff classification of certain men's knit garments and their eligibility for a partial duty exemption under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS). We have reconsidered that ruling and found that it is incorrect as it relates to our finding that the men's garments were eligible for a partial duty exemption. Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification was published on April 13, 2011, in the Customs Bulletin, Volume 45, No. 16. No comments were received in response to the notice. FACTS: The merchandise was described in NY N041522, in relevant part, as follows: The submitted samples, identified as Styles AA1, IM1 and ID1, are men's knit garments that are similar to T-shirts. Styles AA1, IM1 and ID1 have a rib knit mitered V-neckline; short, hemmed sleeves; a screen print design on the right rear shoulder; a small woven fabric label sewn into the lower portion of the front panel; and a straight, hemmed bottom.... .... You state that foreign yarn will be knit into fabric in the United States and the fabric will be dyed and cut into component parts in the United States. The cut-to-shape component parts will then be shipped to Mexico where they will be sewn into garments and screen printed prior to return to the United States.... Considering the provisions of subheading 9802.00.90, HTSUS, CBP found that the application of the screen print design was not an operation incidental to the assembly process. Nonetheless, as the screen printing was only performed on a single component of the shirts, their back panel, CBP held that the printing operation would not preclude "the remainder of the garment" which otherwise satisfied the requirements of subheading 9802.00.90, HTSUS, from receiving a partial duty exemption under the provision. However, we now note that subheading 9802.00.90, HTSUS, only provides for full exemptions from customs duties. ISSUE: Whether the screen printed men's shirts imported from Mexico are eligible to be exempt from customs duty under subheading 9802.00.90, HTSUS. LAW AND ANALYSIS: Subheading 9802.00.90, HTSUS, provides a duty exemption for: Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, provided that such fabric components, in whole or in part, (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; provided that goods classifiable in chapters 61, 62 or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein. Because all the components of the shirts were wholly formed and cut in the U.S. and assembled in Mexico, they need not fully satisfy the requirements of subheading 9802.00.90, HTSUS, in order to gain a full duty exemption. Subheading 9802.00.90, HTSUS, requires only that the textile and apparel goods described in the subheading "in whole or in part" satisfy the requirements of parts (a), (b), and (c) of the tariff provision. Consequently, while the application of the screen print design to one component of the shirts is not an operation incidental to the assembly process, that operation will not preclude the shirts which otherwise satisfy the conditions of the subheading, from receiving the benefit of this tariff provision. See 19 C.F.R. 10.16(b), (c). See also HQ 560201 (May 14, 1998). HOLDING: The men's knit garments described in this ruling are eligible for a full duty exemption under subheading 9802.00.90, HTSUS, when returned to the United States. EFFECT OF OTHER RULINGS: NY N041522 is modified with respect to the eligibility of the shirts for a full duty exemption under subheading 9802.00.90, HTSUS. The tariff classification of the shirts is unchanged. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division 3