The tariff classification of studio back-cloth produced in Indonesia from greige fabric supplied from the United States.

NY B81081 February 11, 1997 CLA-2-59:RR:NC:TA:350 B81081 CATEGORY: Classification TARIFF NO.: 5907.00.8090 Mr. Bernardo Ng Airport Customs Service, Inc. 5777 W. Century Blvd., Suite 1220 Los Angeles, CA 90045-5631 RE: The tariff classification of studio back-cloth produced in Indonesia from greige fabric supplied from the United States. Dear Mr. Ng: In your letter dated January 8, 1997, on behalf of Mr. Steve Kaeser, Ventura, CA, you requested a classification ruling. You write that the inquirer plans to ship U.S. mill manufactured woven cotton gray canvas directly to Indonesia. There, approximately 50% of the surface of the material will be painted with what you describe as "intricate details of various scenes, e.g., fences, buildings and windows, etc". When these backgrounds are returned from Indonesia, the importer will paint in the remaining areas using an air brush depicting such things as clouds, sky and trees, etc. Additionally, they will "paint gesso on the back of each background, finish off all the edges and loop and hem the background". The material will be used for theatrical sceneries or backdrops. No samples were furnished. You ask whether this material may be shipped back to the United States with a partial duty exemption under the auspices of subheading 9802.00.5060 which provides for "articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means ... articles exported for repairs or alterations". Section 10.8, Customs Regulations (19 CFR 10.8). Repairs and alterations are made to already formed articles and do not include intermediate processing operations which are performed as a matter of course in preparation or further manufacturing of semi-finished articles. Thusly, the painting in Indonesia of the various intricate details is considered an intermediate processing operation prior to completing the finished article within the meaning of that tariff subheading. The exported canvas is "incomplete" or "unsuitable" for its intended use prior to the foreign processing. Further, subheading 9802.00.80 provides for a partial duty exemption for : "articles 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 10.24 Customs Regulations (10 CFR 10.24). All three requirements of subheading 9802.00.80 must be met before a component may receive a duty allowance. Once again, the operation performed here does not meet the requirements listed above. The painting of scenery on a greige piece of cotton fabric goes beyond the meaning of mere assembly, its a further fabrication of the raw material (a), the greige fabric has lost its physical identity in the new product i.e., a cotton fabric has become a semi-completed picture (b) and there has been an advancement in value of the U.S. supplied cloth (c). The procedure you propose would not cause any change of classification, duty relief or remove the product from textile restraint consideration. Accordingly, the applicable subheading for the product, will be 5907.00.8090, Harmonized Tariff Schedule of the United States (HTS), which provides for ... painted canvas being theatrical scenery, studio back-cloths or the like, not laminated, of cotton. The duty rate will be 4.1 percent ad valorem which is assessable upon the full value of this merchandise including the cost or value of the Freight and Insurance incurred in shipping the cotton canvas to Indonesia. This merchandise falls within textile category designation 229. Based upon international textile trade agreements products of Indonesia are subject to quota and the requirement of a visa. The designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes. To obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office. 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 George Barth at 212-466-5884. Sincerely, Paul K. Schwartz Chief, Textiles & Apparel Branch National Commodity Specialist Division