Applicability of the duty exemption for freight costs under HTSUS subheading 9802.00.80

NY 810128 May 11, 1995 CLA-2-98:S:N:N5:353 810128 CATEGORY: Classification TARIFF NO.: 9802.00.80, HTSUS Mr. Stephen L. Fodor Kuehne & Nagel 770 Atlanta South Parkway Atlanta, GA 30349 RE: Applicability of the duty exemption for freight costs under HTSUS subheading 9802.00.80 Dear Mr. Fodor: In your letter dated April 24, 1995, received in our office on April 27, 1995, you requested advice concerning the proper method of determining the dutiable portion of the freight costs to be incurred in transporting U.S. components from the United States to China where no operations would be performed there except assembly of the components to form the imported merchandise (in this case, disposable coveralls) and operations incidental thereto. Ruling 807573, previously issued to you on March 24, 1995, addressed the classification of these disposable coveralls to be assembled in China from U.S. components. An article entered under HTSUS subheading 9802.00.80 is subject to duty upon the full value of the imported article less the cost or value of such U. S. components, upon compliance with the documentary requirements of section 10.24 of the Customs Regulations (19 CFR 10.24). Assuming that the disposable coveralls will be appraised on the basis of transaction value (19 U.S.C. 1401 a(b)), the appraised value would equal the cost of the assembly operation, plus the value (as an assist) of all costs of transporting the U.S. components to the production facility in China. The appraised value of the imported product would not include charges incurred in connection with the international shipment of the finished product from China to the United States. This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177). A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Jean F. Maguire Area Director New York Seaport