CLA-2 CO:R:C:G 086230 CRS
Robert T. Stack, Esq.
Tompkins & Davidson
One Whitehall Street
New York, NY 10004
RE: Soiled and Torn Terry Towels; Reconsideration of HRL 085031
Dear Mr. Stack:
This is in reply to your letter dated December 19, 1989, on
behalf of your client Fab Tech, Inc., in which you requested a
reconsideration of Headquarters Ruling Letter (HRL) 085031 dated
August 7, 1989. Samples were submitted with your request.
FACTS:
The sample merchandise consists of terry towels in various
sizes and states of repair. Most are solid white but some are
accented with a colored stripe down the center of the article; a
number appear to have been intentionally cut and soiled. You
state that the towels are by-products of the textile industry and
consist of mill ends, leader cloth and damaged fabric, and as a
result, are suitable only for use as industrial wipers.
In HRL 085031 the articles in question were classified in
subheading 6302.60.0020, HTSUSA, under the provision for toilet
linen and kitchen linen, of terry toweling, of cotton, towels,
other. It was Customs' view that the towels were not
classifiable as rags since they were apparently capable of being
repaired and were therefore not "beyond cleaning or repair" as
required by the Harmonized Commodity Description and Coding
System, Explanatory Notes. The basis of this decision was a
letter from Mr. John Calvert of Fab Tech stating that the company
was considering repairing the towels and enquiring as to whether
this would affect the classification of the towels. Since the
towels were deemed not to be beyond repair they were classified
as towels of heading 6302, rather than as rags of heading 6310,
HTSUSA.
Fab Tech purchases new towels/rags from overseas suppliers
and sells them to wholesalers. The end use of these products is
almost exclusively as industrial wipers. You have stated that in
their current condition, the towels imported by Fab Tech cannot
withstand more than several washings and that the intent of the
sewing operation was to enable the end users of the towels to
launder them so that they could be re-used. However, the
proposed sewing operation subsequently proved uneconomical as it
was determined that the cost of repair exceeded the value added
by cleaning. Consequently, the towels were never repaired.
You state that your client believes the original
classification to be incorrect and requests that we reconsider
our previous ruling. In support of this contention, additional
samples were submitted with your letter of December 19, 1989.
Specifically, the terry towels now at issue, which are imported
in bulk from Pakistan, consist of the following:
1. A 16" x 16" towel, finished on three sides, with a
2 inch intentional cut;
2. A 19" x 15" towel, soiled in several places, and
with a 1 inch intentional cut;
3. A 38" x 36" towel, finished on two sides, with
several light stains, a line of demarcation or open
weave down the middle of the article, and a 1 inch
intentional cut. Both the finished and unfinished
edges are frayed;
4. A 18" x 15" towel, with numerous stains and an
apparently intentional 1 inch cut;
5. A towel with a 1 inch green stripe down the
center, stained and with a 1 inch cut.
6. A 15" x 13" towel, finished on three sides, with
minor stains and a 1 inch intentional cut;
7. A 15" x 21" towel with a hole and a 2 inch cut,
unravelling on two edges.
On January 17, 1990, you submitted an additional set of samples
consisting of eight terry towels. These are similar to the
sample towels submitted with your December 19, 1989, letter as
regards size and the presence of intentional cuts, although some
are slightly more soiled.
You state that these samples are representative of the
condition of new terry goods purchased by your client, Fab Tech,
Inc., in Pakistan. In addition, you advise that terry fabric
pieces may range in size from 15 inches by 18 inches to as large
as 30 inches by 60 inches and that, on average, 96 percent of the
articles are of plain bleach terry material, 70 percent are
hemmed on three or four sides, and 20 percent on two sides. Fab
Tech purchases and imports these articles in bulk packages in
which towels of different sizes and various defects or stains are
commingled.
As further support of your request for reconsideration, you
also submitted a copy of a booklet published by the Textile
Rental Services Association of America (TRSA) entitled Purchasing
Specifications for Linen, Garments, Towels, and Dust Control
(1985). In addition, letters were attached from Professor
Herbert J. Barndt of the Philadelphia College of Textiles, and
from Stuart Daniels, President, International Association of
Wiping Cloth Manufacturers. Finally, the submission contains a
pricing comparison between so-called first quality towels of
various kinds and rags. The prices are quoted on a C&F basis,
i.e., c.i.f. less insurance.
ISSUE:
Whether the articles in question are towels of heading 6302,
HTSUSA, or rags of heading 6310, HTSUSA.
LAW AND ANALYSIS:
Heading 6302, HTSUSA, covers bed linen, table linen, toilet
linen and kitchen linen. According to the Explanatory Notes,
which constitute the official interpretation of the Harmonized
System at the international level (four and six digits), articles
of heading 6302:
are usually made of cotton or flax, but sometimes also
of hemp, ramie or man-made fibers, etc.; they are
normally of a kind suitable for laundering. They
include:
(3) Toilet linen, e.g., hand or face towels (including
roller towels), bath towels, beach towels, face cloths
and toilet gloves.
You state that the object of the proposed sewing operation was to
enable the end user to wash the towels after use without causing
them to fall apart. Thus without further processing, the towels
at issue may not be suitable for laundering. Nevertheless, Mr.
W. G. Moore of Fieldcrest/Cannon, in response to questioning from
Customs' National Import Specialists in New York, stated that in
his opinion, merchandise of this nature could be laundered or
reused since terry has enough structural integrity that it would
not ravel badly, even if the edges were unfinished. However, Mr.
Moore also stated that he believed that merchandise of this type,
especially if used to clean oil or paint, would not be reused.
In this regard, it is Customs' position that the articles in
question are not suitable for laundering since they are unlikely
to be reused.
Moreover, the articles in question, although originally
manufactured as face towels and the like, are not suitable for
use as such. According to the TRSA's Purchasing Specification
for Linen, Garments, Towels and Dust Control (1985) at 9,
articles suitable for use as bath towels, face towels and the
like
must be strong enough to withstand the strain of
rubbing and pulling, twisting and tugging of the user,
and numerous launderings.
Given the condition of the articles in question, it is Customs'
view that the towels imported by Fab Tech do not meet this
standard.
Furthermore, you contend that the articles in question are
commercially unfit for sale either as first quality goods (may
contain flaws, but flaws do not exceed an acceptable level) or
second quality goods (contain flaws which do not impair
serviceability but do affect appearance), and that the primary
market for such towels/rags is to wholesalers of wiping cloths.
This is supported by cost comparison of towels and rags imported
from Pakistan, which on a C&F basis shows a $0.97/lb differential
between the price of rags and an estimated base price for towels.
In light of the condition of the imported articles, as well
as the price differential between towels and rags, it is Customs'
position that the articles in question are not classifiable as
towels.
Heading 6310, HTSUSA, covers, inter alia, used and new rags.
The Explanatory Note to 6310 provides in relevant part that:
[r]ags may consist of articles of furnishing or
clothing or of other old textile articles so worn out,
soiled or torn as to be beyond cleaning or repair, or
of new small cuttings (e.g., dressmakers' or tailors'
snippings).
* * *
To fall in the heading, these products must be worn,
dirty or torn, or in small pieces. They are generally
fit only for recovery (e.g., by pulling) of the fibers
(which are usually re-spun), for the manufacture of
paper or plastics, for the manufacture of polishing
materials (e.g., polishing wheels), or for use as
industrial wipers (e.g., machine wipers).
The articles in question are dirty and torn. It is
immaterial for the purposes of heading 6310 whether they arrived
in this condition as the result of prolonged wear or whether they
were intentionally cut and soiled. What is essential, however,
is that the articles be dirty and torn to the extent that they
are beyond cleaning or repair.
Towels similar to those in question were examined by Herbert
J. Barndt, an associate professor at the Philadelphia College of
Textiles. While only two of the five articles examined were new,
both were stained and had either cuts or tears, in consequence of
which, both were determined to be beyond repair.
The articles in question are fit only for use as industrial
wipers or wiping rags. They are not suitable for use as bath or
face towels, even were they to be repaired. Similarly they are
unfit for use as institutional towels, i.e., towels rented or
purchased by hospitals, laboratories and the like. Consequently,
it is Customs' position that the towels are beyond practicable or
commercially feasible repair. Since the merchandise at issue is
dirty and torn, and beyond repair it meets the requirements for
classification in heading 6310, HTSUSA.
HOLDING:
The articles in question are classifiable in subheading
6310.10.2010, HTSUSA, under the provision for used or new rags...
of textile materials, sorted, other, of cotton. Articles in this
subheading are duty-free.
Please be advised that this ruling is confined to the sample
merchandise. General Note 5, HTSUSA, provides in pertinent part:
(a) Whenever goods subject to different rates of duty are
so packed together or mingled that the quantity or value of
each class of goods cannot be readily ascertained by customs
officers (without physical segregation of the shipment or
the contents of any entire package thereof), by one or more
of the following means:
(i) sampling,
(ii) verification of packing lists or other documents
filed at the time of entry, or
(iii) evidence showing performance of commercial settlement
tests generally accepted in the trade and filed in such time
and manner as may be prescribed by regulations of the
Secretary of the Treasury,
the commingled goods shall be subject to the highest rate of
duty applicable to any part thereof unless the consignee or
his agent segregates the goods pursuant to subparagraph (b)
hereof.
As a result, if some of the imported articles are not worn out,
soiled or torn so as to be beyond cleaning or repair, the
imported merchandise could be considered commingled and,
therefore, classifiable as towels.
Pursuant to section 177.9, Customs Regulations (19 CFR
177.9), HRL 085031 of August 7, 1989 is modified in conformity
with the foregoing.
Sincerely,
John Durant, Director
Commercial Rulings Division