The tariff classification and country of origin marking of L’Envoilee Fragrance of US origin bottled in China

N056279 April 15, 2009 CLA-2-33:OT:RR:NC:2:240 CATEGORY: Classification TARIFF NO.: 9801.00.1097 Mr. Graham Summerfield Jackel 259 Homestead Road Hillsborough, NJ 08844 RE: The tariff classification and country of origin marking of L’Envoilee Fragrance of US origin bottled in China Dear Mr. Summerfield: In your letter dated March 31, 2009, you requested a tariff classification ruling. You state that L’Envoilee bulk fragrance of US origin is sent to China for bottling. The bulk fragrance is emptied from the drums into a large pumping system for the filling of individual bottles. The filled bottles are labeled, packed into retail boxes, and shipped to the USA. The spray bottle and cap are manufactured in China. There is no manufacturing process, other than the bottling performed in China. Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. that are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1) are met. While some change in the condition of the product while it is abroad is permissible, operations, which either advance the value or improve the condition of the exported product render it ineligible for duty free entry upon return to the U.S. See Border Brokerage Co. v. United States, 65 Cust. Ct. 50, C.D. 4052, 314 F.Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970).In United States v. John V. Carr & Sons. Inc., 69 Cust. Ct. 78, C.D. 4377, 347 F.Supp. 1390 (1972, 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), the court stated that absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified in subheading 9801.00.10 HTSUS. The U.S. origin fragrance, bottled, labeled and packaged in a retail sales carton in China and returned to the United States is not considered to have been advanced in value or improved in condition for the purposes of subheading 9801.00.1097, HTS. As a result, the bottled fragrance, a product of the United States, may be eligible for entry as American Goods Returned. If the documentary requirements of 19 C.F.R. §10.1 are satisfied, the applicable subheading for the fragrance will be 9801.00.1097, HTSUS, which provides for products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. Products classified in subheading 9801.00.1097 are free of duty. Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. Part 134 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), mandates that the ultimate purchaser in the United States must be able to find the marking easily and read it without strain."Country of origin" is defined in section 134.1(b), Customs Regulations, as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part.A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. In determining whether the assembly of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. By definition, only merchandise which is "of foreign origin", i.e., of a country of origin other than that of the U.S., is subject to the requirements of 19 U.S.C. 1304. Customs has ruled that products of the U.S. which are exported for further processing and subsequently returned, are not subject to country of origin marking upon importation to the U.S. unless the further processing in the foreign country constituted a substantial transformation of the product. The bulk fragrance material is poured into retail bottles, which does not effect any significant change in the character or use of the fragrance material for purposes of establishing country of origin. Therefore, it is our determination that the foreign processes do not constitute a substantial transformation and the fragrance remains a product of the United States. Accordingly, the imported fragrance is not subject to the country of origin marking requirements of 19 U.S.C. 1304.Perfumery, cosmetic, and toiletry products are subject to the requirements of the Federal Food, Drug, and Cosmetic Act, which is administered by the U.S. Food and Drug Administration. You may contact them at U.S. Food and Drug Administration, Office of Cosmetics and Colors, 5100 Paint Branch Parkway, College Park, MD 20740-3835, telephone number (301) 436 1130 Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. 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 Stephanie Joseph at (646) 733-3268. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division