MAR-2-05 CO:R:C:V 734181 NL
Area Director, JFK Airport
Building 178
Jamaica, New York 11430
RE: Further Review Protest - Protest 1001-0-003380; Country of
Origin Marking Duties; Wearing Apparel; Marking on Back of
Label; 19 U.S.C. 1304(f).
Dear Sir:
This is in response to the above-referenced protest, upon
which the importer, Hari-Om Fashions, Inc., has requested further
review. The importer protests the assessment and liquidation of
marking duties on certain women's apparel consisting of dresses,
skirts, and blouses which were imported from India.
FACTS:
The importer made entry on August 23, 1989, of 107 cartons
of wearing apparel. The Customs inspector found the articles not
to be properly marked and issued a marking/redelivery notice (CF
4647). Specifically, the inspector found that the sewn-in labels
on the merchandise failed to satisfy the requirements of 19
U.S.C. 1304. As imported, the words, "Made in India" appeared
on the back side of the sewn-in labels. This statement of origin
was not visible unless the label was turned over. The importer
was given permission to remark the merchandise on his premises,
and tendered a sample and a certification dated September 15,
1989, that remarking in accordance with 19 U.S.C. 1304 had been
accomplished.
On September 27, 1989, a Customs ISET team conducted an on-
premises inspection to examine the subject articles. The
importer advised Customs officials that some of the merchandise
had been sold, and that the remaining merchandise had been placed
on shelves and mixed with existing inventory. The Customs
inspectors thereupon discontinued their inspection. There ensued
a claim by Customs for liquidated damages for the importer's
failure to redeliver the goods (the subject of a separate
protest), and the instant liquidation of the entry with marking
duties assessed.
The importer's protest and accompanying memorandum of
counsel disputes the basis for the issuance of the marking
notice, denies that there was a failure to redeliver the
merchandise, and maintains that the goods as sold in commerce
were properly marked.
First, it is noted that the articles were accompanied by a
hang tag upon which the country of origin was conspicuously
marked. Thus, it is argued, the apparel was marked in
conformity with Customs requirements at the time of importation.
Second, it is claimed that the importer, after receipt of the
marking/redelivery notice, complied with its directive by cutting
the sewn-in label in such a way that the the words, "Made in
India" became visible on the front of the label. See Exhibit A,
supplemental memorandum. Finally, while conceding that due to a
misunderstanding of Customs instructions not all of the apparel
was retained for verification of marking compliance by Customs,
there nevertheless remained sufficient merchandise for Customs to
verify compliance. The fact that the apparel had been removed
from its shipping cartons should not have inhibited inspection by
Customs of the marking, and there is no law or regulation
requiring the retention of such cartons until final Customs
approval of the remarking, or as a condition of release of the
goods to importer's premises for remarking. With his protest the
the importer submitted numerous letters from its customers in
which they represent that the articles were properly marked when
received by them. Accordingly, it is the importer's position
that notwithstanding Customs' refusal to comlete its
verification of marking at the importer's premises, the goods
were properly marked when sold in commerce prior to liquidation,
and thus no marking duties should be assessed.
ISSUES:
1) Was there a marking violation at the time of importation?
2) Was Customs justified in assessing marking duties upon
this entry?
LAW AND ANALYSIS:
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 U.S. 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 U.S. the English name
of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304.
It is the opinion of this office that the inspecting officer
correctly identified a violation of the marking requirements and
issued a CF 4647 Notice for the correction thereof. While
arguably a technical violation, the marking nevertheless failed
to satisfy the requirements of 19 U.S.C. 1304 and Part 134,
Customs Regulations, as well as the requirements of the Textile
Fiber Products Identification Act (15 U.S.C. 70), and its
implementing regulations (16 CFR Part 303).
As stated by the officer on the CF 4647, "All items must
have the country of origin facing the viewer without having to
flip the tag over." The back side of the sewn-in tag is not a
conspicuous location for the placement of country of origin
marking within the meaning of 19 U.S.C. 1304, and in accordance
with T.D. 54640(6) (1958), the sewn-in tag is the only location
which is acceptable to Customs for the marking of shirts,
blouses, coats, sweaters, and the like. Marking appearing on a
hang tag for such garments is not ordinarily considered
sufficient to remedy a defect in the marking on a sewn-in label.
It is noted that in C.S.D. 84-46 the presence of hang tags
indicating country of origin was found to justify a temporary
technical deviation from marking requirements when a dying
process had rendered the sewn-in labels on apparel partly
illegible. Accord, HQ 729495 (April 1, 1986)(district director
authorized to allow temporary measures, including hang tags, to
be used to bring imported shirts into substantial compliance with
marking requirements.)
The applicable regulations under the Textile Fiber Products
Identification Act, while stated somewhat differently, are to the
same effect. Rule 15(b) provides that each textile fiber product
with a neck shall have the label affixed to the inside center of
the neck. Rule 16 specifies that a textile article's country of
origin is a required item of information which shall be set out
on the same side of the label as the other required information,
and must be clearly legible and readily accessible to the
prospective purchaser. Other items of required information may
appear on the reverse side under certain circumstances, but such
allowances do not exist under these rules for country of origin
marking. Thus these regulations are consistent with Customs
requirements in requiring country of origin marking on sewn-in
labels to appear on the front side of the label. The form CF
4647 was properly issued to the importer in this instance.
We turn now to the marking duties assessed after inspectors
had attempted to conduct a verification of the importer's
certification that the marking defect had been corrected, and
after the importer had failed to redeliver the imported apparel.
As provided in 19 U.S.C. 1304(f), marking duties shall be
levied upon any article which is not legally marked at the time
of importation unless the article is exported, destroyed, or re-
marked under Customs supervision prior to liquidation of the
entry. In lieu of direct Customs supervision a certificate of
marking may be submitted by the importer, together with a
properly marked sample. 19 CFR 134.51(c). Customs officials are
authorized to conduct spot checks (such as the verification
conducted in this case), and may require that the identity of the
imported article be established to their satisfaction. 19 CFR
134.52(c), 134.51(b). The importer is instructed on the CF 4647
that the article "...must be held until marking is verified or
notification received that marking is acceptable".
Here, re-marking was accomplished, but the importer failed
to hold the articles on his premises for verification and/or
acceptance. This was the basis for the parallel liquidated
damages claim for the importer's failure to redeliver the
merchandise. Moreover, his failure to identify the re-marked
merchandise to the satisfaction of Customs officials frustrated
Customs' verification. In consequence, there was not an
acceptance of the importer's certification of marking.
These circumstances establish a strong presumption that the
merchandise was not properly marked at the time of liquidation,
such that marking duties accrued in accordance with 19 U.S.C.
1304(f). In the limited circumstances of this case we find,
however, that the importer has overcome the presumption by
demonstrating that all the merchandise covered by the entry in
question was legally marked when delivered to distributors, which
occurred prior to liquidation. We find the letters from the
importer's customers, which enumerate the invoice numbers and
styles of the merchandise, and describe the manner in which the
goods were marked as delivered to them, persuasive on this point.
Moreover, because the initial violation was technical and
remedied at little expense, i.e., by cutting one side of the
sewn-in tag, we are more prepared to accept the importer's
representations that re-marking was performed on all the
merchandise. Finally, while we do not question the insistence of
Customs officials at the verification of marking that the goods
be presented in their export cartons, Customs remedy (and the
consequence for the importer) was the claim for liquidated
damages; the adequacy of the marking was not conclusively
resolved, and the importer retained the right pursuant to a
protest to demonstrate, as he has here, that the merchandise was
legally marked at liquidation.
HOLDING:
The merchandise was re-marked in accordance with Customs
requirements prior to liquidation. You are directed to allow
the protest. A copy of this decision should be attached to Form
19, Notice of Action, to be sent to the protestant.
Sincerely,
John Durant
Director, Commercial
Rulings Division