HQ 223728 March 18, 1992|
CON-9-04-CO:R:C:E 223728 SR
Mr. Ryden Richardson, Jr.
Carmichael International Service 533 Glendale Boulevard Los Angeles, California 90026-5097
RE: Temporary importation under bond for merchandise repackaged and exported; TIB; quota; 19 CFR 10.31; 9813.00.05, HTSUSA
Dear Mr. Richardson:
This is in reference to your letter dated February 6, 1992, concerning the importation of wearing apparel under a Temporary Importation Under Bond (TIB).
Your client, Nygard, wishes to import ready-to-wear ladies blouses from China. In the United States these garments will be combined with U.S.-made garments to make a set, for example, a blouse, skirt, blazer combination. Each of the 3 garments will be hung on a separate hanger and shipped flat in cardboard cartons to Canadian customers. You state that the following procedures will be involved in the processing of the garments:
1. Opening the boxes in which the Chinese blouses have been shipped from the Orient to the U.S. and inspecting the garments.
2. Cleaning and minor repair, as needed, of the garments.
3. Picking orders for specific quantities of specified coordinated garments sets, combining Chinese with U.S.-made garments as specified by the Canadian retailer customer. The U.S.-made garments will be made here by Nygard, manufactured from U.S. or imported fabric.
4. Packing the garments destined for their Canadian customer in new cardboard export cartons, for the most part skirts in one carton, blazers in another, and blouses in a separate carton.
Whether ladies garments to be inspected, repaired if necessary, and repackaged before exportation to Canada, may be imported free of duty, temporarily under bond, under subheading 9813.00.05, Harmonized Tariff Schedule of the United States (HTSUS).
LAW AND ANALYSIS:
Subheading 9813.00.05, HTSUS, provides for the duty-free entry, under bond, for merchandise imported into the United States for a temporary period for the purpose of repair, alteration, or processing. In order for merchandise to be entered under this tariff provision, there must be intent at the time of entry that the articles will be repaired, altered, or processed.
You state that the garments are inspected in the U.S. and are repaired only if necessary. In this case the garments are not entered with the intention having repair work done, only if it is later found to be necessary. The blouses that do not need cleaning or repair are merely repackaged in another carton of blouses to be sent to customers in Canada with other cartons of garments made in the U.S.A.. There is no intent at the time of entry that all the blouses will be repaired. The mere repackaging of the blouses is not considered to be a process or alteration. There must be more than a mere change in form or number of boxes. The blouses cannot be entered under subheading 9813.00.05, HTSUS, as articles to be repaired, altered, or processed.
In HQ 223212, dated September 3, 1991, it was found that liferafts that are unpacked, inflated, inspected, and repaired if repair is necessary, cannot be entered under subheading 9813.00.05, HTSUS, as articles to be repaired, altered, or processed. It was found that the intent to repair was not there at the time of entry because they are repaired only if necessary. In C.S.D. 80-234, a bulk product was brought into the U.S. to be repackaged into smaller containers. In this ruling it was found that the language repaired, altered, or processed means more than mere repacking and more than a change in form or number of the imported containers.
Blouses that are brought into the U.S. to be inspected, repaired if necessary and then repackaged cannot be entered free of duty, temporarily under bond, under subheading 9813.00.05, HTSUS, as articles repaired, altered or processed.
A U.S. Customs bonded warehouse is an alternative that you should consider. A Customs bonded warehouse is a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. Goods that are exported from a bonded warehouse, that are never entered into the U.S. are not subject to quotas. Authority for establishing a bonded warehouse is set forth in 19 U.S.C. 1555, and 19 CFR 19.1 and 144. Please note, Customs will not approve a bonded warehouse if any operations performed on the textile articles would cause a change in quota categories. Enclosed for your information, is a brochure entitled U.S.
Customs Bonded Warehouse.
John Durant, Director Commercial Rulings Division