CLA-2 CO:R:C:S 557322 MLR

Mr. Lewis Stein
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, N.J. 08933-7002

RE: Applicability of duty exemption under HTSUS subheading 9801.00.10 to dental floss packaged in the Dominican Republic; blister packaging

Dear Mr. Stein:

This is in reference to your letter of April 30, 1993, requesting a ruling on the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to dental floss packaged in the Dominican Republic.

FACTS:

In your letter, reference is made to Headquarters Ruling Letter (HRL) 555183 dated February 15, 1989, where we held that dental floss on plastic cores in prescribed yardages, plastic dispensers, and other packaging material, all of U.S. origin, sent to the Dominican Republic by Johnson & Johnson, were entitled to duty-free treatment under subheading 9801.00.10, HTSUS, upon their return to the U.S. After importation into the U.S., Johnson & Johnson would send the dispenser packs to Puerto Rico, where they were placed into blister packs which were marked with the name of the company and its U.S. address.

Johnson & Johnson now plans to move the blister packaging operation from Puerto Rico to the Dominican Republic. Therefore, the operations conducted in the Dominican Republic would include those mentioned in HRL 555183, and the blister packaging operation.

ISSUE:

Whether the U.S. products (dental floss and packaging materials) exported to the Dominican Republic, will qualify for the duty exemption available under subheading 9801.00.10, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. that have been 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. Some change in the condition of the product while it is abroad is permissible. However, 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 United States. Border Brokerage Company, Inc. v. United States, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970). In Upjohn Co. v. United States, 623 F. Supp. 1281 (CIT 1985), the U.S. Court of International Trade stated that whether merchandise is classifiable under item 800.00, Tariff Schedules of the United States (TSUS) (now subheading 9801.00.10, HTSUS) depends upon whether the product was advanced in value or improved in condition while abroad.

It is alleged that the blister packaging operation does not preclude the duty-free treatment of the items sent to the Dominican Republic under subheading 9801.00.10, HTSUS. You cite HRL 555610 dated February 1, 1991, where we held that "lite stiks" manufactured and foil wrapped in the U.S., exported to Hong Kong for blister packaging with foreign articles, and returned to the U.S., qualified for duty-free treatment under subheading 9801.00.10, HTSUS, because the repackaging operation did not advance them in value nor improve their condition. This decision was based on Superscope, Inc. v. United States, 727 F. Supp. 629 (CIT 1989), where the court found that glass panels of U.S. origin that were exported, packaged with other foreign components to make unassembled stereo cabinets, and then imported into the U.S. as an entirety were not advanced in value or improved in condition while abroad, but were merely repackaged. Therefore, the court held that the glass panels were entitled to duty free entry under item 800.00., TSUS. Although the Superscope case concerned the TSUS, not the HTSUS, the decision is believed to be equally applicable to similar situations arising under the HTSUS, since item 800.00, TSUS, and relevant Schedule 8, TSUS, headnotes were carried over virtually unchanged into the HTSUS.

You also cite HRL 555520 dated October 29, 1990, where we held that U.S.-origin articles included in medical prep kits were not advanced in value or improved in condition by blister packaging operations conducted in Mexico. In HRL 555708 dated September 21, 1990, we also considered U.S.-origin thread and yarn sent to Taiwan, which were despooled from tubes and rewound onto small plastic spools. The spools were then packaged in a blister pack which was marked as a sewing thread assortment. It was held that only the materials of U.S.-origin used in packaging the thread and yarn were entitled to free entry under subheading 9801.00.10, HTSUS, because the thread and yarn, by being rewound onto spools, were advanced in value.

Returning to the case at issue, we have a situation where the dental floss is packaged in a plastic dispenser which is placed into a blister pack. As determined in HRL 555183, the dental floss is not advanced in value or improved in condition by being inserted into the plastic dispenser. Neither do we find, based on the cases above, that the dental floss or dispenser is advanced in value or improved in condition by being placed in a blister pack. As we stated in HRL 731806 dated November 18, 1988, duty-free treatment provided by subheading 9801.00.10, HTSUS, extends to an American-made container which is exported and then reimported with its contents, provided that it meets all of the criteria for classification within that subheading. Consequently, we find that the dental floss, plastic dispenser, and blister packaging are entitled to duty-free treatment under subheading 9801.00.10, HTSUS. Furthermore, we have held that foreign stamping or printing of a product to identify the manufacturer and describe the product does not advance its value or improve its condition so as to preclude entry under 9801.00.10, HTSUS. See HRL 071449 dated October 17, 1983, and HRL 555071 dated April 2, 1993. Therefore, the printing of the company name and its U.S. address will not preclude the blister packaging from receiving duty-free treatment under this tariff provision.

HOLDING:

On the basis of the information submitted, as the U.S. dental floss, plastic dispenser, and blister packaging will not be advanced in value or improved in condition abroad as a result of the packaging operation, these items will qualify for the duty exemption under subheading 9801.00.10, HTSUS, when returned to the U.S., provided the documentation requirements of 19 CFR 10.1 are satisfied.

Sincerely,

John Durant, Director