Applicability of subheading 9801.00.10, HTSUSA, to samplefragrance pouches

HQ 555624 May 4, 1990 CLA-2 CO:R:C:V 555624 DSN CATEGORY: Classification TARIFF NO.: 9801.00.10 Mr. L. Klestadt Vice President Trans-World Shipping Corp. 53 Park Place New York, New York 10007 RE: Applicability of subheading 9801.00.10, HTSUSA, to sample fragrance pouches Dear Mr. Klestadt: This is in reference to your letter of March 27, 1990, on behalf of Aredien Corp., requesting a ruling on the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), to certain sample fragrance pouches imported from France. Samples were submitted for examination. FACTS: Your client will ship U.S.-produced perfumes, toilet water and lotion in bulk to France, whereupon they will be separately repackaged into sample pouches of foreign origin. The filled pouches will be exported to the U.S. where they will be distributed to potential buyers for advertising purposes. The pouches are composed of either polyethelene sheets laminated to aluminum foil, or paper and polyethelene sheets laminated to aluminum foil. You state that the value of the fragrances exceed the value of the packing. You specifically ask whether the contents of the sample fragrance pouches are eligible for subheading 9801.00.10, HTSUSA, treatment. In addition, you ask whether the sample pouches are considered ordinary containers, entitled to duty-free treatment along with their contents. ISSUE: Whether the sample fragrances will qualify for treatment under subheading 9801.00.10, HTSUSA, when returned to the U.S. LAW AND ANALYSIS: Subheading 9801.00.10, HTSUSA, provides for the free entry of U.S. products that are exported and returned without having been advanced in value or improved in condition by any means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. 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, HTSUSA). Therefore, the U.S. perfumes, toilet water, and lotion, which are exported to France and merely packaged in sample pouches are not considered to have been advanced in value or improved in condition for purposes of subheading 9801.00.10, HTSUSA. As a result, these articles will be exempt from duty under this tariff provision when they are returned to the U.S., provided the documentation requirements of 19 CFR 10.1 are satisfied. With respect to whether the sample pouches themselves will be subject to duty, General Rule of Interpretation 5(b), HTSUSA, provides that: ...packing 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 repetititve use. Therefore, the value of a non-reusable container normally used for packing such goods is considered a part of the value of its contents and is dutiable at the rate of its contents. In this case, since the pouches are of the kind normally used for packaging fragrance samples, and these pouches are not suitable for reuse, the value of the pouches is considered a part of the value of its contents and is dutiable at the rate of its contents (a free rate). HOLDING: The bulk fragrances that are exported and merely packaged into sample pouches will receive duty-free treatment under subheading 9801.00.10, HTSUSA, upon their return to the U.S., assuming compliance with the documentation requirements of 19 CFR 10.1. The foreign-made pouches also will be free of duty under this tariff provision. Sincerely, Jerry Laderberg Acting Director Commercial Ruling Division