Applicability of subheading 9801.00.10,HTSUS, to packaged miniaturized consumer products used as samples; General Rule of Interpretation 5(b),HTSUS; HRL 555624

HQ W556783 October 13, 1992 CLA-2 CO:R:C:S W556783 LS CATEGORY: Classification TARIFF NO.: 9801.00.10 Mr. Myron Charness, President Axiom Marketing, Inc. 201 Moreland Road Suite 7 Hauppauge, New York 11788 RE: Applicability of subheading 9801.00.10, HTSUS, to packaged miniaturized consumer products used as samples; General Rule of Interpretation 5(b), HTSUS; HRL 555624 Dear Mr. Charness: This is in response to your letter of June 15, 1992, on behalf of a United Kingdom packaging company, requesting a ruling on the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to packaged miniaturized consumer products, such as coffee, shampoo, and facial cleansers, which are used as samples. Three of these products were submitted as samples for our examination. FACTS: The following facts are based upon your letter of June 15, 1992, and a telephone conversation with a member of my staff. Axiom Marketing, Inc. intends to export various U.S. manufactured consumer products in bulk form to the United Kingdom where they will be apportioned and placed in various types of plastic blister mini-packaging, with labels attached to that packaging. The blister packs are then inserted into printed packaging made of cardboard material, which makes them ready for use as samples. All of the packaging materials will be of foreign origin. ISSUE: Whether the packaged miniaturized consumer products will be entitled to duty-free treatment under subheading 9801.00.10, HTSUS, when they are imported into the U.S. LAW AND ANALYSIS: Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. that are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1) are met. While some change in the condition of the product while it is abroad is permissible, operations which either advance the value or improve the condition of the exported product render it ineligible for duty-free entry upon return to the U.S. See Border Brokerage Co. v. United States, 65 Cust. ct. 50, C.D. 4052, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970). In United States v. John v. Carr & Sons, Inc., 69 Cust. ct. 78, C.D. 4377, 347 F. Supp. 1390 (1972), 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), the court stated that absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified under item 800.00, Tariff Schedules of the United States (TSUS) (the precursor to subheading 9801.00.10, HTSUS). In the instant case, we find that the operations performed in the United Kingdom are simple packaging operations that do not result in an advancement in value or improvement in condition of the various U.S. manufactured bulk consumer products. Therefore, these products will be eligible for duty-free entry under subheading 9801.00.10, HTSUS, when they are returned to the U.S. in the miniaturized packaging, provided the documentation requirements of 19 CFR 10.1 are satisfied. We next address the question of whether the foreign packaging materials, consisting of blister packaging, labels, and cardboard packaging, will be subject to duty. General Rule of Interpretation S(b), HTSUS, provides, in pertinent part: [P]acking materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision does not apply when such packing materials or packing containers are clearly suitable for repetitive use. Since the foreign packaging materials are not suitable for repetitive use, they are properly classifiable with the consumer products enclosed therein for tariff purposes. It follows, therefore, that because the bulk consumer products, such as coffee and shampoo, are subject to duty-free entry under subheading 9801.00.10, HTSUS, the packaging materials in which  they are enclosed are also entitled to duty-free treatment. See Headquarters Ruling Letter (HRL) 555624 dated May 1, 1990 (bulk fragrances of U.S. origin which were exported to France and merely packaged into sample pouches of foreign origin were entitled to duty-free treatment under subheading 9801.00.10, HTSUS, upon their return to the U.S.; the pouches were also entitled to duty-free treatment under this provision). HOLDING: The bulk consumer products, such as coffee and shampoo, will be entitled to duty-free treatment under subheading 9801.00.10, HTSUS, upon their return to the U.S., assuming compliance with the documentation requirements of 19 CFR 10.1. Applying General Rule of Interpretation 5(b), HTSUS, the various packaging materials of foreign origin will also be eligible for duty-free entry under the same tariff provision. Sincerely, John Durant, Director Commercial Rulings Division