HQ 087341: Labels; Clothing labels; man-made fiber; coated non-woven material; coated woven material; coated textiles; parts of clothing; American goods returned; Substantial transformation.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 087341

                          October 2, 1990

   CLA-2 CO:R:C:G 087341 KWM

   CATEGORY: Classification

   TARIFF NO.: 5603.00.90; 5903.20.2500

   Ms. Ann M. Williams
   A.N. Deringer, Inc.
   30 West Service Road
   Champlain, New York  12919-9703

   RE:  Labels; Clothing labels; man-made fiber; coated non-woven
        material; coated woven material; coated textiles; parts
        of clothing; American goods returned; Substantial
        transformation.

   Dear Ms. Williams:

        This will acknowledge receipt of your correspondence
   dated May 24, 1990, requesting a binding classification ruling
   of "'Remay' man-made fiber labels" and "'Acetate' man-made
   fiber labels" under the Harmonized Tariff Schedule of the
   United States Annotated.  After considering your request, we
   find that the proper classification is as described below.

   FACTS:

        Two distinct types of merchandise are presented for
   classification.  The first is a man-made fiber label described
   as a "Remay" label.  It is composed of a non-woven polyester
   coated with an acrylic material.  The second is described as
   "Acetate", and is composed of woven acetate coated with a
   polyester material.

        Both types of material are of U.S. origin.  The
   merchandise is sent to Canada, presumably in sheet form,
   without marking or other working.  In Canada the material is
   perforated and holes are punched along the edges of the
   material.  The samples provided indicate that the holes
   provide a pin-feed capability for printing.  The punched and
   perforated sheets are then shipped back to the U.S. where they
   are printed.  Your letter emphasizes that no printing is
   performed in Canada.

        Your first request is for classification of the punched
   and perforated merchandise under the Harmonized Tariff
   Schedule of the United States Annotated (HTSUSA).  Secondly,
   you have inquired as to whether heading 9802, HTSUSA,
   regarding  articles exported and returned, advanced or
   improved abroad, may be applicable to the importation of the
   goods.



   ISSUES:

        How is this merchandise classified under the Harmonized
   Tariff Schedule of the United States Annotated?

        Is heading 9802 of the Harmonized Tariff Schedule of the
   United States Annotated applicable to the importation of these
   goods?


   LAW AND ANALYSIS:

        Classification under the Harmonized Tariff Schedule of
   the United States Annotated (HTSUSA) is made in accordance
   with the General Rules of Interpretation (GRI's).  The
   systematic detail of the harmonized system is such that
   virtually all goods are classified by application of GRI 1,
   that is, according to the terms of the headings of the tariff
   schedule and any relevant Section or Chapter Notes.  In the
   event that the goods cannot be classified solely on the basis
   of GRI 1, and if the headings and legal notes do not otherwise
   require, the remaining GRIs may be applied, taken in order.

        In reviewing the HTSUSA, we note the following headings,
   the terms of which indicate that they may be eligible for
   classification of these goods:

        "Remay" labels:

        5603      Nonwovens, whether or not impregnated, coated,
                  covered or laminated:
        or:

        5807      Labels, badges and similar articles of textile
                  materials, in the piece, in strips or cut to
                  shape or size, not embroidered:
        or:

        6217      Other made up clothing accessories; parts of
                  garments or of clothing accessories, other than
                  those of heading 6212:

        "Acetate" labels:

        5903      Textile fabrics impregnated, coated, covered or
                  laminated with plastics, other than those of
                  heading 5902:
        or:

        5807      (See Above)

        or:

        6217      (See Above)

   Your submission of May 24, 1990 suggested heading 5807,
   HTSUSA, and we have also considered heading 6217, HTSUSA.
   However, after reviewing the terms of the headings and
   accompanying Explanatory Notes, we find that the instant goods
   are not provided for under either of these headings, but
   rather should be classified as textile materials based on
   their composition.

   Heading 5807, HTSUSA, Labels of Textile Material

        Although your submission refers to both products as
   "labels", they are essentially perforated sheets of textile
   material, they have not acquired the characteristics of
   clothing labels, and are not yet of a size or description
   suitable for use as clothing labels.  Also, your submission
   points out that no printing is performed prior to importation.

   Clothing labels are intended primarily, if not solely, to
   convey printed information to a purchaser.  Without such
   printing, we cannot say here that the instant merchandise is
   either a label or has acquired the essential character of a
   label.

   Heading 6217, HTSUSA, Parts and Made Up Accessories of
   Garments

        Both parts and accessories must be suitable for use
   solely or principally with their primary good.  Parts must be
   essential or integral to the use of the good, while
   accessories are intended to facilitate or improve the use.
   Neither characterization is applicable here.  Labels are not
   integral to the use of a garment, nor do they facilitate its'
   use.  In addition, without printing which would be tailored
   specifically to the garment in which the label was sewn, these
   goods are not suited solely or principally with that garment.
   Lastly, these goods are not "made up" as that term is used in
   the nomenclature.  Legal Note 7 to Section XI, HTSUSA,
   indicates that a made up article may be cut otherwise than
   into squares or rectangles, or produced in the finished state,
   or cut to size having undergone a process of drawn thread
   work.  The instant merchandise meets none of these criteria.
   It is not in a finished state, nor has it been 'cut' in the
   common sense, merely perforated for separation at a later
   stage.

   Classification as Textile Materials

        Having found that these goods are not made up, are not
   parts or accessories, or that they have the essential
   character of labels, the remaining eligible headings provide
   for classification as a textile material.

        "Remay", a composite material of non-woven man-made
   polyester fibers coated with acrylic is provided for in
   subheading 5603.00.90, HTSUSA.  "Acetate", a composite
   material of woven acetate man-made fiber coated with
   polyurethane plastics is provided for in subheading
   5903.20.2500, HTSUSA.  The description of the goods classified
   in each of these headings is set out above.

   Applicability of Heading 9802.00.5040, HTSUSA

        Your letter also requested a ruling on the applicability
   of the partial duty exemption under subheading 9802.00.50,
   HTSUSA, to the returned merchandise.  This tariff provision
   provides for the assessment of duty on the value of repairs or
   alterations performed on articles sent abroad for that
   purpose.  However, such treatment is precluded where the
   exported articles are incomplete for their intended use and
   the foreign processing is a necessary step in the preparation
   or manufacture of finished articles.  Dolliff & Company, Inc.
   v. United States, 81 Cust. Ct. 1, C.D. 4755, 455 F.Supp. 618
   (1978), aff'd, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1979).

        As the merchandise in this case clearly is not complete
   for its intended use when exported to Canada, it is our
   opinion that the perforating and punching operations exceed
   the meaning of the terms "repairs" and "alterations."
   Therefore, the returned labels will not be eligible for
   reduced duty treatment under subheading 9802.00.50, HTSUSA.

   HOLDING:

        The labels referred to as "Remay" labels are classified
   as coated nonwoven textile material of subheading 5603.00.90,
   HTSUSA, dutiable at the rate of 12.5 percent ad valorem.  The
   applicable textile category is 223.

        The labels referred to as "Acetate" labels are classified
   as textile fabric of man-made fibers coated with polyurethane
   of subheading 5903.20.2500, HTSUSA, dutiable at the rate of
   8.5 percent ad valorem.  The applicable textile category is
   229.

        The designated textile and apparel category may be
   subdivided into parts.  If so, the visa and quota category
   requirements applicable to the subject merchandise may be
   affected.  Since 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 you check, close to
   the time of shipment, the Status Report on Current Import
   Quotas (Restraint Levels), an issuance of the U.S. Customs
   Service, which is updated weekly and is available at your
   local Customs office.

        Due to the changeable nature of the statistical
   annotation (the ninth and tenth digits of the classification)
   and the restraint (quota/visa) categories, you should contact
   your local Customs office prior to the importation of this
   merchandise to determine the current status of any import
   restraints or requirements.

        Articles that meet the definition of "goods originating
   in the territory of Canada" (see General Note 3(c)(vii)(B),
   HTSUSA) are subject to reduced rates of duty under the United
   States-Canada Free Trade Agreement Implementation Act of 1988.

   If the merchandise constitutes "goods originating in the
   territory of Canada," the applicable rate of duty for the
   Remay and Acetate labels would be 10 percent ad valorem and
   6.8 percent ad valorem respectively.



                                      Sincerely,


                                      John A. Durant
                                      Director,
                                      Commercial Rulings Division