The tariff classification of a coconut fiber basket liner cut to size and shape in Canada from fabric produced in Sri Lanka.

NY E80041 June 18, 1999 CLA-2-63:RR:NC:TA:352 E80041 CATEGORY: Classification TARIFF NO.: 6307.90.9989 Ms. Carol Hagyard A.N. Deringer 1010 Niagra Street Buffalo, NY 14213 RE: The tariff classification of a coconut fiber basket liner cut to size and shape in Canada from fabric produced in Sri Lanka. Dear Ms. Hagyard: In your letter dated March 25, 1999, on behalf of your client Braun Nursery Ltd., you requested a tariff classification ruling. The submitted sample is a basket liner cut to shape to fit a metal basket. The liner is produced by cutting a needleloom felt fabric composed of 100% coconut fiber. Your correspondence indicates that the fabric from which this product is produced is formed in Sri Lanka and shipped to the United States. The fabric is then exported to Canada where the basket liner is cut from the fabric rolls. Then the basket liners will be imported into the United States. It is your contention that the transaction you contemplate should be eligible for reduced duties under subheading 9802.00.5060, HTS, 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 by other means, articles exported for repair or alteration, other, other, other. Unfortunately this provision does not apply to the transaction that you contemplate. The provision for repairs and alterations does not apply to the continuation of a manufacturing operation. In Doliff & Company v. The United States, 78 CCPA77, CAD 1225 (1979), the Court considered whether U.S. produced greige fabric which was exported to Canada and processed by scouring, dyeing and finishing should be granted partial duty relief under the provision for repairs or alterations. The Court found that this provision did not apply and observed: “...repairs and alterations are made to completed articles and do not include intermediate processing operations which are performed as a matter of course in the preparation or manufacture of finished articles.” In Guardian Industries Corporation v. United States, 3 CIT 9, Slip-op 82-4 (1982), the Court ruled that a process that makes a product suitable for its intended use was beyond the scope of alterations as that term is used in subheading 9802.0050, HTS. Consequently, in the situation before us in this case, the manufacture of the basket liner from the Sri Lankan fabric is a continuation of the manufacture of a basket liner and the process performed in Canada makes the item suitable for its intended use. Therefore, following the principles of the court cases in Guardian, Supra and Doliff, Supra, the cutting to shape of the basket liners is beyond the scope of the provision for repairs and alterations and no duty allowance is possible under that provision. The applicable subheading for the basic liner will be 6307.90.9989, Harmonized Tariff Schedule of the United States (HTS), which provides for other made up articles, including dress patterns, other, other, other, other, other. The rate of duty will be 7 percent ad valorem. Further, no allowance for duty may be made under subheading 9802.00.5060, HTS. It should be noted that the dutiable value of the basic liner should include the cost or value of the fabric shipped to Canada if such cost or value is not already included in the price paid or payable for the basket liners. 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 Alan Tytelman at 212-637-7092. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division