Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to vacuum system hoses; classification; connectors

HQ 557178 July 1, 1993 CLA-2 CO:R:C:S 557178 MLR CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Ed Baker A.N. Deringer, Inc. 30 West Service Road Champlain, New York 12919-9703 RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to vacuum system hoses; classification; connectors Dear Mr. Baker: This is in reference to your letter of February 8, 1993, on behalf of Tiger-Vac, Inc., requesting a ruling regarding the tariff classification and marking requirements of vacuum system hoses, and the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS). The country of origin marking issue will be addressed in a separate letter. A diagram of the articles was submitted with your request. FACTS: Tiger-Vac plans to import static dissipating neoprene, explosion proof, vacuum system hoses from Canada. U.S.-origin flexible neoprene hose (measuring 10 inches long by 1 1/2 inches (38 millimeters) in diameter, and permanently embedded and continuously repeated throughout the length of the hose with "Lawrence 2752-SAE J1527 USCGTYPEA2 Made in USA") will be imported into Canada in 50 foot coils, where it is cut to 10 feet lengths. In Canada, a stainless steel male connector, measuring 1 1/2 inches in diameter and made in the U.S., is force fitted to one end of the hose. On the other end of the hose, a metal female adaptor assembly is connected. The metal female adaptor is formed by permanently attaching one Taiwanese-origin adaptor to a 2 inch Canadian-origin piece of aluminum tubing. ISSUES: I. What is the proper classification of the vacuum system hoses under the HTSUS? II. Whether the U.S. components in the vacuum system hoses will qualify for the duty allowance under HTSUS subheading 9802.00.80, when imported into the United States. LAW AND ANALYSIS: I. Classification The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes...." Note 2, Section XVI states, that "parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (a) Parts which are goods included in any of the headings of chapters 84 and 85 (other than headings 8485 and 8548) are in all cases to be classified in their respective headings; (b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c) All other parts are to be classified in heading 8485 or 8548." The information submitted indicates that the hose is manufactured according to specification for use with Tiger-Vac's vacuum, Model# EXP1-25. There is no indication that the parts will have use in any other application. The hose at issue is not a part included in any of the headings in chapters 84 and 85. Therefore, it cannot be classified pursuant to Note 2(a), Section XVI, HTSUS. However, inasmuch as the hose is a part suitable for use solely or principally with a vacuum, it is classified pursuant to Note 2(b), Section XVI, HTSUS. Therefore, the hose is properly classified under subheading 8509.90.20, HTSUS, which provides for "Electromechanical domestic appliances, with self- contained electric motor; parts thereof...Parts...Parts of vacuum cleaners...." II. Subheading 9802.00.80, HTSUS 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. All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24). Section 10.14(a), Customs Regulations {19 CFR 10.14(a)}, states in part that: [t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components. Section 10.16(a), Customs Regulations {19 CFR 10.16(a)}, provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, lamination, sewing, or the use of fasteners. Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operations. See 19 CFR 10.16(a). However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to that component. See 19 CFR 10.16(c). The operations of force fitting the stainless steel male connector to one end of the flexible neoprene hose, and a metal female adaptor assembly to the other end of the hose, are considered acceptable assembly operations pursuant to 19 CFR 10.16(a) for purposes of subheading 9802.00.80, HTSUS. Cutting the hose to lengths of 10 feet is considered an acceptable operation incidental to assembly pursuant to 19 CFR 10.16(b)(6). HOLDING: The vacuum hose is classified under subheading 8509.90.20, HTSUS, which provides for parts of vacuum cleaners, with duty at the Column 1 rate of 3.4 percent ad valorem. Subheading 8509.90.20, HTSUS, is an eligible tariff provision for preferential treatment under the United States- Canada Free Trade Agreement (CFTA). If the article is deemed to be goods originating in the territory of Canada, pursuant to General Note 3(c)(vii), HTSUS, it will be dutiable at the rate of 1.7 percent ad valorem. Furthermore, the process of connecting the stainless steel male connector and the metal female adaptor assembly to the opposite ends of the hose constitute acceptable assembly operations. Cutting the hose to length is an acceptable incidental operation. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin stainless steel male connector and flexible neoprene hose contained in the vacuum system hoses, provided the documentary requirements of 19 CFR 10.24 are satisfied. Sincerely, John Durant, Director Commercial Rulings Division cc: Chief, Glass and Metals Branch New York Seaport (Attn: James Smyth, NIS)