The eligibility of wearing apparel for partial duty exemption under subheading 9802.00.50, HTSUS.

N020074 December 18, 2007 CLA-2-98:OT:RR:NC:3:353 CATEGORY: Classification TARIFF NO.: 9802.00.50 Mr. Gerald B. Horn Sandler, Travis & Rosenberg, P.A. 551 Fifth Avenue New York, NY 10176 RE: The eligibility of wearing apparel for partial duty exemption under subheading 9802.00.50, HTSUS. Dear Mr. Horn: In your letter dated November 16, 2007, on behalf of SGS Sports Inc., you requested a ruling on whether wearing apparel was eligible for partial duty exemption under subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS). The imported merchandise consists of wearing apparel imported into the United States by SGS Sports Inc. (SGS), who will pay the appropriate duties upon entry. For purposes of this ruling we assume that you will supply required visas for any merchandise subject to quota. Following importation, SGS will send the wearing apparel to Montreal, Canada. The merchandise is being sent by SGS to Canada for the affixing of retail price tickets on the garments. The wearing apparel will then be returned to the United States for distribution by SGS to its customers in the U.S. You request a determination regarding the eligibility for treatment under subheading 9802.00.50, HTSUS. Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the United States after having been advanced in value or improved in condition by repairs or alterations, provided that the documentary requirements of Section 181.64, Customs Regulations (19 C.F.R. § 181.64), are satisfied Section 181.64, C.R., 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 garments are complete for their intended use as wearing apparel prior to being exported to Canada to undergo the addition of retail price tickets. The merchandise in its condition as exported from the United States and as returned from Canada can be marketed and sold to consumers for the same use. The operations performed in Canada do not result in the loss of the good’s identity nor create a new article with a different commercial use. Therefore, the addition of retail price tickets constitutes an acceptable alteration within the meaning of subheading 9802.00.50, HTSUS. The garments will qualify for the special tariff treatment of that provision, provided that the documentary requirements of 19 C.F.R. § 181.64 are met. Based on directives issued by the Committee for the Implementation of Textile Agreements (CITA), goods entered under subheading 9802.00.50 are exempt from quota/visa requirements. We assume that you will supply required visas for any merchandise subject to quota when the merchandise is initially entered into the United States. 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 Kenneth Reidlinger at 646-733-3053. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division