Eligibility of men’s sweatshirts for partial duty exemption under subheading 9802.00.50, HTSUS

NY I87698 December 5, 2002 CLA-2-61:RR:NC:TA:N3:356 I87698 CATEGORY: Classification TARIFF NO.: 9802.00.50 Ms. Elizabeth Burns JanSport, Inc. N850 Cty. Hwy. CB P.O. Box 1817 Appleton, WI 54913-1817 RE: Eligibility of men’s sweatshirts for partial duty exemption under subheading 9802.00.50, HTSUS Dear Ms. Burns: In your letter dated November 7, 2002, you requested a tariff classification ruling. Style 55000 is a men’s sweatshirt constructed from 55 percent cotton, 45 percent polyester, finely knit fabric that is napped on the inside surface. The fabric measures 21 stitches per two centimeters counted in the horizontal direction. Style 55000 has a rib knit crew neck; long sleeves with rib knit cuffs; a half-moon at the rear neckline; a woven fabric label on the right sleeve; and a snug fitting rib knit bottom. Style 55000 will be imported in sizes S, M, L, XL and XXL. The same garment will be imported in Size XXXL as Style 55005. Two samples were submitted. Both are identical, but one has embroidery on the center chest and one is plain, without embroidery. You state that the sweatshirts will be manufactured in Lesotho without embroidery and imported into the United States under HTS 9819.11.12 with the appropriate documentation. The garments will then be exported to Mexico where they will be embroidered with various names or logos and re-imported into the United States. You request a determination regarding the eligibility of the shirts for partial duty exemption under subheading 9802.00.50, HTSUS. As requested, your samples will be returned. Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the U.S. after having been advanced in value or improved in condition by repairs or alterations, provided that documentary requirements of Section 181.64, Customs Regulations (19 C.F.R. 181.64), are satisfied. Section 181.64, which implements Article 307 of NAFTA, provides that goods returned after having been repaired or altered in Mexico may qualify for complete or partial duty free treatment, provided that the requirements of this section are met. However, entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. In this instance, the embroidery operation creates a different article with unique, specialized appeal and constitutes a finishing step in the manufacture of the embroidered garments. As such, the embroidery operation is considered more than an “alteration” within the meaning of subheading 9802.00.50, HTSUS. Consequently, the sweatshirts are not entitled to the special tariff treatment under that provision. See HRL 555760 of November 16, 1990 and HRL 555249 of June 16, 1989. The country of origin of the merchandise remains Lesotho. The applicable subheading for the sweatshirt will be 6110.20.2040, Harmonized Tariff Schedule of the United States, (HTS), which provides for: men’s or boys’ sweatshirts, knitted or crocheted: of cotton: men's. The general rate of duty will be 17.3 percent ad valorem. The sweatshirts fall within textile category designation 338. Based upon international textile trade agreements, products of Lesotho are not presently subject to visa requirements or quota restraints. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web site at www.customs.gov. In addition, 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 and should also be verified at the time of shipment. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of this ruling letter 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 this ruling, contact National Import Specialist Mary Ryan at 646-733-3271. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division