CLA-2 CO:R:C:V 555205 GRV

Mr. John W. Cain
Cain Customs Brokers, Inc.
421 Texano
P.O. Box 150
Hidalgo, Texas 78557

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to spark plug wire assemblies created by cutting spooled wire to length, stripping the ends, crimping a terminal on one end of the wire and force fitting nipples over the other ends with the aid of a lubricant.Incidental operations; General Instrument (1974).

Dear Mr. Cain:

This is in response to your letter of November 14, 1988, on behalf of Wells Mfg. Co., requesting a ruling on the applicabili- ty of item 807.00, Tariff Schedules of the United States (TSUS) (now subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS)), to spark plug wire assemblies to be imported from Mexico. Photographs of the assembly process were submitted. We regret the delay in responding to your request.

FACTS:

You state that U.S.-made wire (8 mm in diameter), die- stamped terminals (one set is stamped at a 90 degree angle and the other set is stamped at a 180 degree angle) and rubber nipples will be exported to Mexico for assembly into spark plug wire assemblies. The wire and terminal sets will be exported on spools and the nipples will be exported in bulk. The foreign assembly operation consists of two steps:

(1) a spool of wire and one spool each of the terminals are fed through a wire stripper machine, which cuts the wire to length, strips both ends, and crimps a 90 degree terminal onto one end and a 180 degree terminal onto the other end. The operator then places the wire on an overhead conveyor that moves the sub-assembly to a booting station. (2) At the booting station, the operator force fits the 90 degree terminal into a distributor nipple and the 180 degree terminal into a spark plug nipple. To aid the operator in force fitting the nipples over the ends of the spark plug wire, a lubricant is applied.

The spark plug wire assemblies are then packaged and shipped to the U.S.

ISSUE:

Whether the returned spark plug wire assemblies are entitled to the partial duty exemption under HTSUS subheading 9802.00.80.

LAW AND ANALYSIS:

HTSUS subheading 9802.00.80 provides a partial duty exemp- tion for:

[a]rticles assembled abroad in whole or in part of fabri- cated components, the product of the United States, which (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 such as cleaning, lubricating, and painting.

All three requirements of HTSUS subheading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to a duty upon the full value of the imported assembled article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentation requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Assembly operations for purposes of HTSUS subheading 9802.00.80 are interpreted at section 10.16(a), Customs Regula- tions (19 CFR 10.16(a)), which specifically enumerates force fitting as an acceptable means of assembly. Further, this section provides that assembly operations may be preceded, accompanied, or followed by operations incidental to the assembly.

Operations incidental to the assembly process are not con- sidered further fabrication, as they are of a minor nature and cannot always be provided for in advance of the assembly opera- tion. Examples of operations considered incidental to the assem- bly process are delineated at section 10.16(b), Customs Regula- tions (19 CFR 10.16(b)), which specifically enumerates cutting to length of finished components exported in continuous lengths. In the instant case, the description of the foreign opera- tion shows that the spark plug wire assemblies to be imported will be eligible for the partial duty exemption available under HTSUS subheading 9802.00.80. The wire, terminals and nipples components are products of the U.S. which are exported on spools or in bulk. Once abroad, the wire is cut to length and both ends are striped of insulation--acceptable incidental operations under 19 CFR 10.16(b)(6), as the ends cannot be stripped until the wire is cut to length (see also, General Instrument Corporation v. United States, 61 CCPA 86, C.A.D. 1128, 499 F.2d 1318 (1974), rev'g, 70 Cust.Ct. 151, C.D. 4421, 359 F.Supp. 1390 (1973)--and a terminal is crimped onto each end. The crimping operation con- stitutes an acceptable joining of two solids within the meaning of 19 CFR 10.16(a). The nipples are then force fitted onto each end of the spark plug wire with the aid of a lubricant. This also is an acceptable assembly operation. As the U.S. components do not lose their physical identities in the assembly operation, and are not otherwise advanced in value or improved in condition except by assembly operations and operations incidental thereto, the returned spark plug wire assemblies will be eligible for the partial duty exemption under HTSUS subheading 9802.00.80.

HOLDING:

On the basis of the described foreign operation and after viewing the photographs submitted, the spark plug wire assemblies will be eligible for the partial duty exemption under HTSUS subheading 9802.00.80 when returned to the U.S., upon compliance with the documentary requirements of 19 CFR 10.24.

Sincerely,

John Durant, Director
Commercial Rulings Division