CLA-2-98:OT:RR:NC:N4:441
John Mulvihill
UPS Supply Chain Solutions
One UPS Way
Champlain, NY 12919
RE: Eligibility of jewelry boxes for partial duty exemption under subheading 9802.00.50, HTSUS
Dear Mr. Mulvihill:
In your letter dated August 28, 2009, you requested a tariff classification ruling on behalf of Impenco Ltd. Your samples are being returned.
The submitted samples are jewelry boxes constructed with an outer surface of plastic sheeting material. In their original form the jewelry boxes are printed with the phrase “Genuine Amethyst” on the insert and “Sterling Silver” on the inside top lining. These foreign origin jewelry boxes are purchased by Impenco, Ltd. in this state from sources within the United States and exported to Canada for alterations. In Canada, two different methods of altering the boxes will be preformed. In the first method, the printed insert will be removed and replaced with a blank insert and the printed inside top lining will be replaced with an unprinted blank lining. In the second method, the printed insert will simply be removed and the printed top lining will be replaced with an unprinted blank lining. After these alterations, the generic boxes will be sold and exported directly to various parties in the United States.
The applicable subheading the jewelry boxes is 4202.92.9060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for jewelry boxes and similar containers, with outer surface of plastic sheeting material, other. The general rate of duty is 17.6% ad valorem.
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 the documentary requirements of section 181.64, Customs Regulations (19 C.F.R. §181.64), are satisfied. Section 181.64, which implements Article 307 of the North American Free Trade Agreement (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 jewelry boxes are complete for their intended use prior to being exported to Canada for the alternations described above. The operations performed in Canada do not result in the loss of the good’s identity or create a new article with a different commercial use. Changing the lining and insert or removing the insert constitutes an "alteration" within the meaning of subheading 9802.00.50, HTSUS. These jewelry boxes are entitled to the special tariff treatment under that provision, provided the documentation requirements of 19 CFR 181.64 are met.
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."
As noted in 19 C.F.R. § 181.64 (c)(2), the port director may require additional information as is deemed necessary to prove actual exportation of the goods from the United States and subsequent re-importation of the same goods after alteration. The documentation must clearly follow the jewelry boxes through exportation, alteration, and re-importation. For information as to the documentation that will satisfy Section 181.64, C.R., you should contact the port director at the anticipated U.S. port of entry.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
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 Vikki Lazaro at (646) 733-3041.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division