CLA-2 RR:TC:SM 560649 MLR
Port Director
U.S. Customs Service
797 S. Saragosa Rd.
El Paso, Texas 79907
RE: Application for Further Review of Protest No. 2402-96-100013; Denial of duty exemption under HTSUS subheading
9802.00.90 to toys for pets; Special Regime; findings;
trimmings; polyester stuffing; Mexico
Dear Madam:
This is in reference to a protest and application for
further review filed by Rudolph Miles & Sons, Inc. on behalf
of MFI International, Inc., ("MFI"), contesting the denial
of the duty exemption under subheading 9802.00.90,
Harmonized Tariff Schedule of the United States (HTSUS), to
toys for pets.
FACTS:
It is indicated that MFI imported toys for pets from
Mexico under subheading 9802.00.90, HTSUS, on December 14,
1995. The entry was liquidated in April 1996, and the
protest was timely filed on May 7, 1996. Your office
contends that the toys are classifiable under subheading
6307.90.75, HTSUS, as the toys were filled with 100 percent
polyester stuffing that was not of U.S. origin.
ISSUE:
Whether toys for pets filled with 100 percent polyester
stuffing of foreign origin are eligible for duty-free entry
under subheading 9802.00.90, HTSUS.
LAW AND ANALYSIS:
Appendix 2.4 of Annex 300-B of the NAFTA, provides that:
[o]n January 1, 1994, the U.S. shall eliminate customs
duties on textile and apparel goods that are assembled
in Mexico from fabrics wholly formed and cut in the
United States and exported from and reimported into the
United States under:
(a) U.S. tariff item 9802.00.80.10; or
(b) Chapter 61, 62, or 63 if, after such assembly,
those goods that would have qualified for treatment
under 9802.00.80.10 have been subject to bleaching,
garment dyeing, stone-washing, acid-washing or
perma-pressing.
Thereafter, the U.S. shall not adopt or maintain any
customs duty on textile and apparel goods of Mexico that
satisfy the requirements of subparagraph (a) or (b) or
the requirements of any successor provision to U.S.
tariff item 9802.00.80.10.
Consequently, subheading 9802.00.90, HTSUS, was created
to provide for the duty-free entry of:
Textile and apparel goods, assembled in Mexico in which
all fabric components were wholly formed and cut in the
United States, provided that such fabric components, in
whole or in part, (a) were exported in condition ready
for assembly without further fabrication, (b) have not
lost their physical identity in such articles by change
in form, shape or otherwise, and (c) have not been
advanced in value or improved in condition abroad except
by being assembled and except by operations incidental
to the assembly process; provided that goods
classifiable in chapters 61, 62, or 63 may have been
subject to bleaching, garment dyeing, stone-washing,
acid-washing or perma-pressing after assembly as
provided for herein.
The initial question is whether the subject toys for
pets are considered "textile and apparel goods" under
subheading 9802.00.90, HTSUS. The alternative
classification of the toys for pets as stated by your office
is subheading 6307.90.75, HTSUS. "Textile and apparel
goods" eligible for duty-free treatment under subheading
9802.00.90, HTSUS, are listed in Appendix 1.1 of Annex 300-B
of the NAFTA. Chapter 63 of Appendix 1.1 includes among
such goods "6307.90 Made up articles, of textile materials,
nes, including dress patterns"). Therefore, the toys for
pets qualify as "textile and apparel goods" eligible for
duty-free treatment under subheading 9802.00.90, HTSUS.
In view of the fact that the enactment of subheading
9802.00.90, HTSUS, specifically was intended to extend duty-free and quota-free status to all goods assembled in Mexico,
which previously were eligible for entry under the Special
Regime Program administered under U.S. tariff item
9802.00.8010, HTSUS, it is Customs view that all of the
policy directives implementing this program should be
considered applicable in the administration of subheading
9802.00.90, HTSUS. One such policy under the Special Regime
Program included the allowance of "findings, trimmings, and
certain elastic strips of foreign origin" to be incorporated
into the assembled good "provided they do not exceed 25
percent of the cost of the components of the assembled
product." Examples of findings and trimmings are sewing
thread, hooks and eyes, snaps, buttons, "bow buds," lace
trim, zippers, including zipper tapes, and labels. See 53
FR 15726 (May 3, 1988).
Your office states that because the 100 percent
polyester stuffing is of foreign origin and is not a finding
or trimming, that the toys for pets should be classified
under subheading 6307.90.75, HTSUS. Your office refers to
Headquarters Ruling Letter (HRL) 559552 dated February 14,
1996, and HRL 559738 dated July 2, 1996. In HRL 559552, we
found that shoulder pads and sleeve headers were not
findings or trimmings, and that jackets made with foreign
shoulder pads and sleeve headers were excluded from
subheading 9802.00.90, HTSUS, treatment. The sleeve header
was sewn between the shell fabric and the lining fabric
along the outside shoulder seam where the sleeve joined the
body of the garment and was designed to provide fullness
along the seam to enhance the appearance of the jacket at
the point where the sleeve met the shoulder. In HRL 559738,
we held that shoulder pads, sleeve headers, chest pieces,
and synthetic suede yokes and elbow patches were not
"findings or trimmings" and that jackets made with such
foreign components were excluded from subheading 9802.00.90,
HTSUS, treatment.
MFI contends that the polyester stuffing is not a
"fabric" as that term is used in subheading 9802.00.90, but
rather is a "fiber". MFI also contends that a good may
still be eligible for subheading 9802.00.90, HTSUS,
treatment even if the good assembled in Mexico is composed
of materials other than fabric, "findings", or "trimmings."
MFI cites HRL 558708 dated June 14, 1995, where Customs
considered scarves with heatable plastic packs made from
U.S.-origin fabric components, rolls of velcro material, and
energy packs comprised of plastic sheeting filled with a
silica sand and paraffin wax substance. The velcro material
rolls and energy packs were manufactured in the U.S. It was
held that since the operations performed in Mexico in
connection with the fabric components were acceptable
assembly operations or operations incidental to assembly,
the imported heatable scarves with energy packs qualified
for duty-free treatment under subheading 9802.00.90, HTSUS,
provided all such components were cut and formed in the U.S.
In HRL 557875 dated May 4, 1995, Customs considered
whether soft-sided luggage assembled in Mexico was eligible
for duty-free treatment under subheading 9802.00.90, HTSUS.
The luggage was assembled, in part, using non-fabric
components including metal frames, metal or plastic wheels,
metal handle rings, metal rivets, plastic webbing, vinyl
washers, and wood bases of both U.S. and foreign
manufacture. Despite these non-U.S. origin components, it
was held that the luggage was eligible for subheading
9802.00.90, HTSUS, treatment. See also HRL 559961 dated
March 3, 1997, where Customs held that motor vehicle safety
belts made with certain non-textile components, such as
frames, supports, etc. of U.S. and foreign manufacture were
eligible for subheading 9802.00.90, HTSUS, treatment. We
also note that in HRL 559552 and HRL 559738, the foreign
articles considered, i.e., the shoulder pads, sleeve
headers, etc. were foreign and were either considered fabric
themselves or composed of fabric components as to require
analysis whether they were findings or trimmings.
Accordingly, based upon HRL 557875 and HRL 559961, in
order to be eligible for 9802.00.90, textile and apparel
articles must not necessarily be wholly made of U.S.-origin
fabric components or foreign findings and trimmings up to 25
percent of the cost of the components of the assembled
product, but may incorporate a component that is neither a
fabric nor a foreign-origin finding or trimming. This is
also consistent with Presidential Proclamation No. 6821 of
September 12, 1995, which modified subheading 9802.00.90,
stating that Presidential Proclamation No. 6641 of December
15, 1993, which established subheading 9802.00.90,
inadvertently narrowed this tariff provision to only allow
duty-free entry to textile and apparel goods assembled in
Meixco "in whole of fabrics wholly formed and cut" in the
U.S. Therefore, the next question is whether the 100
percent polyester stuffing is considered a "fabric".
In HRL 089387 dated August 30, 1991, polyester staple
fiber was found to be classifiable under subheading
5503.20.0000, HTSUS, and in New York Ruling Letter 860936
dated March 11, 1991, it was held that 100 percent polyester
stuffing to fill toys was also classifiable under subheading
5503.20.00, HTSUS. Accordingly, we find that the 100
polyester stuffing at issue in this case will be
classifiable under subheading 5503.20.00, provided your
office verifies that it is not carded, combed or otherwise
processed for spinning. Heading 5503 provides for synthetic
staple fibers. "Fabric" is defined as any cloth produced by
joining fibers as by knitting, weaving, or felting". New
College Edition, The American Heritage Dictionary 468
(1976). "Fiber" is defined as any slender, elongated
structure; a filament or strand", or "a natural or synthetic
filament, as of cotton or nylon, capable of being spun into
year", or "material made of such spun filaments." Id.
Therefore, we conclude that the 100 percent polyester
stuffing is not a fabric. We also find that it is not a
"finding" or a "trimming", and no claim thereto has been
made by MFI.
Furthermore in this regard, under subheading 9802.00.90,
as distinguished from 9802.00.80, HTSUS, it is noted that
the new statute only requires that all fabric components be
formed and cut in the U.S., and that only such components be
exported from the U.S. in condition ready for assembly
without further fabrication. Since subheading 9802.00.90,
HTSUS, was intended as a successor provision to subheading
9802.00.80, HTSUS, with respect to certain textile and
apparel goods assembled in Mexico, the regulations under
subheading 9802.00.80, HTSUS, may be instructive in
determining whether a good is eligible for the beneficial
duty treatment accorded by subheading 9802.00.90, HTSUS.
Pursuant to section 10.16(a) of the Regulations (19
C.F.R. 10.16(a)), the assembly operations performed abroad
may consist of any method used to join or fit solid
components, such as welding, soldering, riveting, force
fitting, gluing, laminating, sewing, or the use of
fasteners, and may be preceded, accompanied, or followed by
operations incidental to the assembly process. Under 19 CFR
10.14(a), components will not lose their entitlement to the
benefits of subheading 9802.00.80, HTSUS, by being subjected
to operations incidental to the assembly before, during, or
after the assembly with other components.
In HRL 555459 dated July 12, 1990, Customs held that
creating baby toys by sewing pre-cut pieces of terry cloth
together and stuffing polyester material into the form were
considered acceptable assembly operations. Your office also
acknowledged that the toys were assembled in Mexico and
otherwise would qualify for 9802.00.90, HTSUS, treatment,
but for the fact that the toys were made using polyester
stuffing of foreign origin. As we find that the 100 percent
polyester stuffing is not a fabric, but rather is a fiber,
we find that the toys for pets are eligible for duty-free
entry under subheading 9802.00.90, HTSUS.
HOLDING:
As subheading 9802.00.90 only requires that any fabric
(i.e., woven and cut in the U.S.) used in the assembly of
the textile and apparel article in Mexico be of U.S. origin
or be considered a finding or trimming, and the 100 percent
polyester is not a fabric, but a fiber, the toys for pets
filled with such stuffing will not be excluded from
subheading 9802.00.90, HTSUS, treatment. Therefore, the
protest should be granted.
In accordance with Section 3A(11)(b) of Customs
Directive 099 3550-065 dated August 4, 1993, Subject:
Revised Protest Directive, this decision should be attached
to Customs Form 19, Notice of Action, and be mailed by your
office to the protestant no later than 60 days from the date
of this letter. Any reliquidation of the entry in
accordance with the decision must be accomplished prior to
mailing of the decision. Sixty days from the date of the
decision the Office of Regulations and Rulings will take
steps to make the
decision available to customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Lexis, Freedom of Information Act and
other public access channels.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division