Eligibility of men’s knit shirts for partial duty exemption under subheading 9802.00.50, HTSUS

NY I87404 November 13, 2002 CLA-2-61:RR:NC:TA:N3:356 I87404 CATEGORY: Classification TARIFF NO.: 9802.00.50 Mr.Rodney Ralston UPS Freight Services. One Trans-Border Drive P.O. Box 800 Champlain, NY 12919 RE: Eligibility of men’s knit shirts for partial duty exemption under subheading 9802.00.50, HTSUS Dear Mr. Ralston: In your letter dated October 2, 2002, on behalf of Fersten Worldwide, you requested a tariff classification ruling. The submitted sample is men’s polo shirt constructed from 65 percent cotton, 35 percent polyester, pique knit fabric that measures 12 stitches per linear centimeter counted in the horizontal direction and 21 stitches per linear centimeter counted in the vertical direction. The garment features a rib knit spread collar; a partial front opening with a three button placket; short sleeves with rib knit cuffs; and a straight, hemmed bottom with side slits and a tail. You state that the shirts are manufactured in India and imported into the United States with the appropriate invoices and visas. The shirts are then exported to Canada where they will be embroidered on the left chest with company names or logos for specific clients. The shirts will then be re-imported into the United States.. You have provided samples of the shirts as they are imported from India and as they will be re-imported, after embroidery, into the United States. You request a determination regarding the eligibility of the shirts for partial duty exemption under subheading 9802.00.50, HTSUS. As requested, your samples will be returned. Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the U.S. after having been advanced in value or improved in condition by repairs or alterations, provided that documentary requirements of Section 181.64, Customs Regulations (19 C.F.R. 181.64), are satisfied. Section 181.64, which implements Article 307 of NAFTA, provides that goods returned after having been repaired or altered in Canada may qualify for complete or partial duty free treatment, provided that the requirements of this section are met. However, entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. In this instance, the embroidery operation creates a different article with unique, specialized appeal and constitutes a finishing step in the manufacture of the embroidered shirts. As such, the embroidery operation is considered more than an “alteration” within the meaning of subheading 9802.00.50, HTSUS. Consequently, the shirts are not entitled to the special tariff treatment under that provision. See HRL 555760 of November 16, 1990 and HRL 555249 of June 16, 1989. The country of origin of the merchandise remains India. The applicable subheading for the polo shirt will be 6105.10.0010, Harmonized Tariff Schedule of the United States, (HTS), which provides for: men’s or boys’ shirts, knitted or crocheted: of cotton: men's. The rate of duty will be 20 percent ad valorem. The shirts fall within textile category designation 338. Based upon international textile trade agreements, products of India are subject to visa requirements and quota restraints. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web site at www.customs.gov. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of this ruling letter or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding this ruling, contact National Import Specialist Mary Ryan at 646-733-3271. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division