The tariff classification of raschel warp knit lace fabric of U.S.origin shipped to Austria for further processing, then returned to the UnitedStates.

NY C88760 June 18, 1998 CLA-2-59:RR:NC:TA:350 C88760 CATEGORY: Classification TARIFF NO.: 5903.90.2500; 9802.00.80 Mr. Craig M. Schau Emery Custom Brokers 6940A Engle Road Middleburg Heights, OH 44130 RE: The tariff classification of raschel warp knit lace fabric of U.S. origin shipped to Austria for further processing, then returned to the United States. Dear Mr. Schau: In your letter dated May 28, 1998, on behalf of Holt Hosiery Mills Inc., Burlington, NC, you requested a tariff classification ruling. In your correspondence, you indicate that your client intends to ship U.S. produced lace fabric (actually of raschel warp knit construction) to Austria where an application of silicone dope will be sprayed on the reverse side of the lace. Your letter mentioned "silicon" which is a mineral substance, we understand the substance is "silicone" based on Mr. Holt's fax. Silicone is considered a plastics polymer. In addition to a finished stocking, you supplied representative samples of three respective styles along with their pertinent specifications (does not include the silicone application) as follows: Style Weights F8432 Nylon (20 Denier/70 Denier) (76.2%) Lycra (140 Denier) (23.85) F8433 Nylon (20 Denier/70Denier) (84.4%) Lycra (140 Denier) (15.6%) F8434 Nylon (20 Denier/70Denier) (80.2%) Lycra (140 Denier) (19.8%) Specifically, rolls of raschel "lace" material measuring approximately 3 to 4 inches wide, depending on styles, will be shipped to Austria. This "lace" is a warp knit fabric classifiable under HTS subheading 6002.20. In Austria, silicone will be sprayed on the reverse side of the material forming two 1/2 inch wide rows a 1/4 of an inch apart near the top edge of the material. In this condition, the material will be returned to the United States where it will be cut to size of approximately 18 inch lengths and sewn on to the top of knit ladies thigh-high stockings (nylon/lycra) which are produced in the U.S. These elastic silicone strips serves as a tacky substance that keeps the completed stocking in place on the thigh without the use of any kind of garter. The applicable subheading for the materials, which do not appear to be over 70 percent by weight of the silicone plastic portions, will be 5903.90.2500, Harmonized Tariff Schedule of the United States (HTS), which provides for textile fabrics impregnated, coated, covered or laminated, with plastics, of man- made fibers, not over 70 percent by weight of rubber or plastics. The rate of duty will be 8.1 percent ad valorem. In your letter, you refer to the possibility of partial duty free treatment for the cost or value of the U.S. supplied component. 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 10.16 of the Customs Regulations (19 CFR § 10.16) describes acceptable assembly operations for goods to qualify for subheading 9802.00.80. Since the silicone is applied in spraying or fluid operation, an assembly of fabricated components has not occurred. Consequently, the goods do not qualify for heading 9802 consideration. Accordingly, upon the importation into the United States of the semi-complete stocking material, no allowance can be made for the cost or value of the U.S. supplied fabric. As such, duty should be assessed upon the full value of the material in its imported condition including the cost of freight and insurance incurred in shipping the U.S. supplied components to Austria for processing. 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, Robert B. Swierupski Director, National Commodity Specialist Division