Internal Advice Request No. 38/89; applicability of subheading 9802.00.80, HTSUS, to plastic relay covers subjected to a slotting operation abroad.Rudolph Miles;incidental operations

HQ 555450 July 28, 1989 CLA-2 CO:R:C 555450 RA CATEGORY: Classification TARIFF NO.: 9802.00.80 District Director of Customs 3600 E. Paisano Bldg. B Room 134 Bridge of the Americas P.O. Box 9516 El Paso, Texas 79985 RE: Internal Advice Request No. 38/89; applicability of subheading 9802.00.80, HTSUS, to plastic relay covers subjected to a slotting operation abroad.Rudolph Miles;incidental operations Dear Sir: This is in response to your memorandum of June 20, 1989, forwarding a request for internal advice dated March 7, 1989, from Rudolph Miles & Sons on behalf of Potter & Brumfield. The request relates to the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to a plastic relay cover which is slotted in Mexico prior to its assembly with an electrical relay. FACTS: A plug-in electrical relay is assembled in Mexico and, as the final step, a plastic dust cover of U.S. origin is pierced to form a slot and the cover is positioned over, and assembled to, the relay. The importer claims that this operation is minor in nature and incidental to the overall assembly operation, as without the piercing of the slot, the final assembly of the cover onto the relay base cannot be completed. However, your office is of the opinion that the dust cover is not exported from the U.S. in condition ready for assembly, noting that the piercing could have been done in the U.S. before exportation to Mexico. ISSUE: Can the piercing of the slot in the relay dust cover be considered incidental to assembly so as to qualify the component for tariff treatment under subheading 9802.00.80, HTSUS? - 2 - LAW AND ANALYSIS: Subheading 9802.00.80, HTSUS, provides a partial duty exemption for: [a]rticles assembled abroad in whole or in part of fabricated 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. Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), states that the assembly operations may consist of any method used to join or fit together solid components and may be preceded, accompanied, or followed by operations incidental to the assembly process. However, 19 CFR 10.16(c) provides that any significant process, operation, or treatment other than assembly whose primary purpose is the fabrication, completion, or physical or chemical improvement of a component shall not be regarded as incidental to the assembly and shall preclude the application of the exemption to such component. In Rudolph Miles v. U.S., C.A.D. 1202, 65 CCPA 32 (1978), the appellate court held that the burning of holes and slots in Z-beams prior to their joinder to boxcars, so that wear and support plates and other components could be initially attached, did not constitute further fabrication and was incidental to the assembly process. The court stated that the burning process was concomitant with the assembly and was not substantial enough to preclude qualification under the statute. Following the principle of this judicial decision, we held in Headquarters Ruling Letter (HRL) 061429 dated March 28, 1980, that the drilling of holes in the plastic cabinet of a cable television converter -- a necessary preliminary step to completion of the assembly -- was an operation incidental to the assembly process. See, also, HRL 555394 dated August 15, 1989 (punching a 1/2 inch hole in the upper pocket of a fabric vane for receipt of a plastic hanger insert which is permanently enclosed within the pocket is a minor operation incidental to the assembly of the vanes). In this case, we are of the opinion that the piercing of a slot in the plastic relay cover to permit the insertion of the electrical relay into the cover is analogous to the drilling and punching operations in HRL's 061429 and 555394. - 3 - The slotting operation is necessary to the assembly of the dust cover to the relay and is performed concomitant with the assembly of the relay. Moreover, we are satisfied that the operation is a minor one in view of information provided by Rudolph Miles & Sons regarding the time and cost required to perform the slotting operation compared to the time and cost required for the entire assembly operation. Accordingly, the slotting operation should not preclude tariff treatment under the provisions of subheading 9802.00.80, HTSUS, for the dust cover component. HOLDING: The slotting of a plastic relay cover is not a substantial operation but rather one merely incidental to the assembly of the relay and an allowance in duty may be made under the provisions of subheading 9802.00.80, HTSUS, for the cost or value of the cover, upon compliance with the documentary requirements of 19 CFR 10.24. Sincerely, John Durant, Director Commercial Rulings Division 6cc: A.D., NY Seaport (NIB-112-124)