The tariff classification of Loudspeakers from Mexico

NY J81129 February 27, 2003 CLA-2-85:RR:NC:MM:109 J81129 CATEGORY: Classification TARIFF NO.: 9802.00.50 Mr. Jorge Torres Director, Trade Compliance and Consulting Services Parker & Company 7801 South Jackson Road McAllen, TX 78577 RE: The tariff classification of Loudspeakers from Mexico Dear Mr. Torres: In your letter dated February 6, 2003, you requested a tariff classification ruling on behalf of Goodmans Loudspeakers Limited and Goodmans Loudspeakers de Mexico, S. De R.L. de C.V. Goodmans Loudspeakers Limited. The items subject to this ruling request are loudspeakers designed for automotive applications. As your request states, the loudspeakers are manufactured in the United Kingdom and Hungary. In your request, you explain that the loudspeakers will be imported into the United States, at which time applicable duty will be submitted. You state that the loudspeakers are ultimately exported to Mexico where the following process will be undertaken: 1 - Performance of a functionality test for damage or defects during transportation of the loudspeakers 2 - Placement of a label to the loudspeakers to identify that an inspection was made 3 - Repackaging of the loudspeakers in returnable containers and addition of shipping labels to the re-shipment boxes 4 - Return of the loudspeakers to the United States for consumption You inquire as to the applicability of the special classification provision Heading 9802 of the Harmonized Tariff Schedule of the United States (HTSUS) for these loudspeakers upon re-importation into the United States after undertaking the aforementioned process in Mexico. Chapter 98, Subchapter II, U.S. Note 3 (d) states: “For the purposes of subheadings 9802.00.40 and 9802.00.50, the rates of duty in the "Special" subcolumn of column 1 followed by the symbol "CA" or "MX" in parentheses shall apply to any goods which are returned to the United States after having been repaired or altered in Canada or in Mexico, respectively, whether or not such goods are goods of Canada or goods of Mexico under the terms of general note 12 to the tariff schedule.” The “Special” duty rate column for Subheading 9802.00.50, HTSUS, provides for a free rate of duty for articles that are returned after having been exported to Mexico to be advanced in value or improved in condition by means of repairs or alterations. On the basis of the information submitted, we find that the testing and labeling operations performed in Mexico are considered alterations. Therefore, the cost of the alterations of the re-imported loudspeakers are duty free under subheading 9802.00.50, upon compliance with the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8). This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling 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 the ruling, contact National Import Specialist Linda M. Hackett at 646-733-3015. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division