CLA-2 RR:CR:TE 959588 RH
Mr. William Knoblauzh
Area Director
U.S. Customs Service
330 Second Avenue South
Suite 560
Minneapolis, MN 44401
RE: Protest Number 3501-93-100383; footwear; roller skates
Dear Mr. Knoblauzh:
This is in reply to a memorandum from your port dated June 15, 1994, regarding the Application for Further Review of Protest (AFR) 3501-93-100383. Meyer Customs Brokers filed the AFR covering 19 entries, on behalf of Rollerblade, Inc., against the classification of four styles of in-line skate boot shells with removable textile liners. The law firm of Powell, Goldstein, Frazer & Murphy filed a Memorandum of Fact and Law in Support of Protest.
Initially, we note that the lead protest (number 3501-93-100425) for the merchandise in question is referenced as Headquarters Ruling Letter (HQ) 958590 , which we mailed to you at the same time we mailed this letter.
FACTS:
The merchandise under protest consists of four models of polyurethane shells used solely in the manufacture of in-line roller skates. The shells consist of a molded polyurethane upper and a removable, padded textile and/or removable vinyl liner. The boot frames have plastic uppers and bottoms and extend above the wearers ankles. They are designed to be worn with textile booties which are exposed through holes in the plastic boot frames and above the top of the shaft. The first model is the Special Make Up (SMU). It has a black plastic shell with 12 eyelets and one plastic rachet-and-buckle type strap. It also has a black liner with a purple plastic tongue. The Mondoblade has a black plastic shell with 16 eyelets and no closure strap, and a white liner with
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a white plastic tongue. The Aeroblade consists of a metallic-looking gray plastic shell with no eyelets and three purple rachet-and-buckle type straps and a dark gray liner. The last model, Coolblade, also has a metallic-looking gray plastic shell with no eyelets and three rachet-and-buckle type straps which are green, red and yellow. It also has a dark gray liner.
Customs liquidated all of the entries between May 28, 1993 and August 6, 1993, under subheading 6402.19.9030 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides, in part, for sports footwear with outer soles and uppers of rubber or plastics, not having uppers of which over 90 percent of the external surface area is rubber or plastics. Thereafter, the protestant timely filed this action on August 17, 1993.
Based on a case pending before the Court of International Trade (CIT) at the time the instant protest was filed, Rollerblade Inc. v. United States, Docket Number 91-12-00981, 112 F.3d 481 (CIT 1997), Customs suspended action on the protest pending the court?s decision. Initially, the protestant?s primary argument was that the merchandise was classifiable as ?roller skates and
parts and accessories thereof? under subheading 9506.70.2000, HTSUS, and not ?footwear? of any kind. In Rollerblade, the court addressed whether the footwear provisions under the Tariff Schedule of the United States (TSUS) and the HTSUSA were broad enough to encompass roller skate boots imported without wheels. For purposes of this ruling, we will only discuss the court?s decision as it pertains to the HTSUSA.
In Rollerblade, the merchandise consisted of rigid, molded plastic (polyurethane) boots which included a removable, padded vinyl liner. The bottom of each boot was molded to accommodate the permanent attachment of wheel frames and wheels. The court rejected plaintiff-appellee?s claim that the boots were classifiable as roller skates and parts thereof in subheading 9506.70.20, HTSUSA, determining that ?footwear? under the HTSUSA encompasses shoes of the type used for attachment to skates, while the ?roller skate parts? provision covers plates, blades and wheels.
In light of the recent court decision, the protestant abandoned its claim that the skate boots are classifiable in chapter 95, HTSUSA, and now raises the following grounds on which the pending protests can be approved:
1. All but one of the entries were made BEFORE December 31, 1992, and therefore qualify for duty-free entry under heading 9902.64.02, which suspended the duty on ?skating boots used in the manufacture of in-line roller skates? (provided for under subheading 6402.19.10) through December 31, 1992.
2. All of the entries covered by protest 3501-93-100383 were unlawfully reliquidated by Customs Service well beyond 90 days after the original liquidations.
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3. Minneapolis Customs now concedes that most of the models have external surface areas of more than 90 percent rubber or plastics.
A member of my staff met with counsel on August 25, 1994, and again on September 18, 1998, to discuss the issues in this case. At the last meeting we afforded counsel an opportunity to submit additional information to support the AFR, which we received on April 1, 1999.
ISSUES:
1. Do the boot frames/shells qualify for duty-free entry under subheading 9902.64.02?
2. Were the entries covered by protest 3501-93-100425 ?unlawfully reliquidated??
3. Is the external surface area of the uppers of the imported polyurethane shells more than 90 percent rubber or plastics?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes, taken in their appropriate order.
Customs liquidated the four styles in this protest under subheading 6402.19.9030, of the 1993 HTSUSA, which provides, in part, for other footwear with outer soles and uppers of rubber or plastics.
Counsel argues the skate boots at issue are classifiable in subheading 6402.19.1020, HTSUSA, as other sports footwear having uppers of which over 90 percent of the external surface area is rubber or plastics.
Note 3(a), Chapter 64, states that the terms ?rubber? and ?plastics? include ?woven fabrics or other textile products with an external layer of rubber or plastics being visible to the naked eye.
Note 4(a), Chapter 64, reads:
The material of the upper shall be taken to be the constituent material having the greatest external surface area, no account being taken of accessories or reinforcements such as ankle patches, edging, ornamentation, buckles, tabs, eyelet stays or similar attachments.?
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The record contains a Customs laboratory report for five of the samples which reflect the following findings:
Model Name Rubber or Plastics, By Area
SMU 96 %
Mondoblade 91 %
Aero-Blade 87%
Cool-Blade 89%
Based on these laboratory analyses,we agree with the protestant that the SMU and Mondoblade have an external surface area of the upper (ESAU) which is over 90 percent rubber or plastics and that those models of skate boots are classifiable in subheading 6402.19.1020, as claimed.
The Aeroblade and Coolblade models do not have eyelet stays. Counsel states that those models have liners that protrude above the cuff of the shell and portions of the liner that are visible through ventilation apertures. Since the liner is covered with a vinyl material, counsel argues that it must be included in calculating the percentage of the external surface area of the uppers consisting of rubber or plastics.
Finally, counsel contends that the exposed portion of the tongue must also be included in calculating the percentage of the external surface area of the uppers consisting of rubber or plastics. On the Aeroblade and Coolblade models, counsel claims that the tongue is actually a continuous part of the plastic molded shell and cannot be distinguished between the tongue portion of the polyurathane shells from the remainder of the upper.
In order to assist importers in better understanding classification requirements for footwear, Customs published ?Footwear Definitions? in T.D. 93-88, 27 Cust. B. & Dec. No. 46, on October 25, 1995. The definitions serve merely as guidelines and are not to be construed as Customs rulings. The definition of ?External Surface? reads:
1. The ?external surface? of the upper is, in general, the outside surface of what you see covering the foot (and leg, if applicable) when the shoe is worn.
A. It does not include:
1. Accessories and reinforcements such as ankle patches, edging, ornamentation, (i.e., tassels, pompons, or braids), buckles, tabs, eyelet stays, slide fasteners, or similar attachments. Other examples include the leather pieces sewn on the top of the lower part of the upper in basketball shoes, and ?filled-in? embroidery.
2. The upper?s lining, which faces the foot.
3. The sock lining that the foot rests on.
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4. The tongue.
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B. It does include:
1. Small holes in materials. The holes count as if they were filled with the material which surround them.
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4. Underlays, which are the outer side of lining that can be seen through large holes in the uppers. Any hole bigger than a collar button is surely ?large?; one smaller than a pin head is surely not ?large?; In between, it depends on the materials, shape spacing etc.
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In Headquarters Ruling Letter (HQ) 955541, dated May 18, 1994, Customs addressed the classification of a man?s basketball shoe with a removable liner. Although the shoe did not qualify for classification in subheading 6402.91.40, because it had a foxing-like band, the ruling is relevant in that we stated that:
When the ?frame? and the liner are imported together, the external surface area of the upper of the complete shoe include all of the textile areas where the textile liner is the only material covering the foot. Again, the plastic oval, which we consider to be the partial equivalent of a tongue is not counted as ESAU or as accessories or reinforcements.
In HQ 955705, dated March 1, 1994, Customs classified a man?s high top, lace-up athletic shoe ?frame? with a unit-molded plastic sole and a plastic upper imported with removable textile bootie-like liners with applied textile soles in subheading 6402.91.70, because the textile portion comprised at least 10 percent of the external surface area of the upper. The external surface area included a narrow, textile topline trim on the shoe, and textile where the bootie shows above the topline and the tongue, and where it shows through the three cutouts in the lateral side of the upper.
It is Customs position that the tongue or flap of footwear which extends upward from the top line of the shoe and is visible and tactile is included in the calculation of the exterior surface of the upper. T.D. 84-59, 18 Cust. B. & Dec. 166 (January 11, 1984). It has consistently been Customs position that the exterior surface area of the upper is whatever is visible and tactile on the surface excepting such things as buttons, strips and other loosely attached appurtenances. In those cases
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where the tongue was held not to be part of the exterior surface area of the upper, it was on a plane lower than a portion of the upper and was partially or wholly covered by laces and eyelet facings or strays. Id.
In this case, we agree with counsel that the portions of the liner which are exposed through the holes in the boot frame and above the shaft and the exposed portion of the tongue which extends upward from the top line and is visible and tactile are included in the ESAU. With this in mind, a Customs laboratory examined both the Aeroblade and Coolblade models and determined that the textile portions accounted for more than 10 percent of the ESAU.
Customs reviewed the laboratory reports and methodology used to determine the ESAU and concluded that Customs methodology and test results were ?acceptable.? The report reads, in pertinent part as follows:
The subject footwear is constructed chiefly of a hard molded plastic exterior with a textile liner. The difficulty in the analysis of this type of footwear is that the molded plastic cannot be made to lie flat in two pieces for analysis, which is the conventional way to prepare the sample in order to calculate the ESAU according to the U.S. Customs Laboratory Method for Footwear. According to your cover memorandum, the protestant?s counsel has suggested that the Customs laboratory measurement was ?inaccurate due to improper methodology,? and a copy of the methodology used by the protestant?s private testing service was submitted for our review. The methodology involves the use of a ?ConTact Paper technique? for determining ESAU.
It is well settled that the methods of weighing, measuring, and testing merchandise used by Customs officers and the results obtained are presumed to be correct. United States v. Gage Bros, 1 Ct. Cust. Appls. 439, T.D. 31503; United States v. Lozano, Son & Co., 6 Ct. Cust. Appls. 281, T.D. 35506; Draper & Co., Inc. v. United States, 28 Cust. Ct. 136, C.D. 1400. However, this presumption may be rebutted by showing that such methods or results are erroneous. Sears, Roebuck & Co. v. United States, 3 Ct. Cust. Appls. 447, T.D. 33035; Gertzen & Co. v. United States, 12 Ct. Cust. Appls. 499, T.D. 40697; Pastene & Co., Inc. v. United States, 34 Cust. Ct. 52, C.D. 1677.
In Universal Electronics, Inc. v. United States, 113 F. 3d 488 (Fed Cir. 1997), which reiterates the holding in Goodman Manufacturing L.P. v. United States, 69 F. 3d 505 (Fed Cir. 1995) that the presumption of correctness carrie
s no force as to questions of law, the court stated that the presumption of correctness is:
[A] procedural device that is designed to allocate, between the two litigants to a lawsuit the burden of producing evidence in sufficient quantity. Specifically, the importer must produce evidence (burden of production portion of the burden of proof) that demonstrates by a preponderance (the burden of persuasion portion of the burden of proof) that
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Customs classification decision is incorrect. The presumption of correctness certainly
carries force on any factual components of a classification decision such as whether the subject imports fall within the scope of the tariff provision, because facts must be proven via evidence. (Emphasis in original).
Even if we assume, arguendo, that the independent laboratory reports rebut the presumption of correctness of the Customs laboratory reports, the protestant did not prove by a preponderance of the evidence that the methods used by Customs or the results obtained in its reports were erroneous. The protestant failed to reference any errors made by the Customs laboratory or to
prove that the methods used or results obtained by the independent laboratory were more reliable or accurate. Accordingly, the Aeroblade and Coolblade models are classifiable under subheading 6402.19.9030, HTSUSA.
Next, we will address counsel?s claim that the boots qualify for duty-free entry under subheading 9902.64.02, HTSUSA. At the time of entry in 1992, that provision covered ?Skating boots for use in the manufacture of in-line roller skates (provided for in subheading 6402.19.10). Articles qualifying for that provision were duty free.
The court in Rollerblade was sympathetic to the importer?s situation, noting that the imposition of tariffs on the in-line roller skate boots while not imposing tariffs on the finished in-line roller skates puts companies like Rollerblade who import the boots and assemble the outfits in the United States at a competitive disadvantage referred to as tariff inversion. Thus, the court noted that the Committee approved a temporary suspension of the duty on boots without skates attached, provided the boots are actually used in the manufacture of roller skates and are entered within the effective dates of the temporary suspension. Accordingly, the SMU and Mondoblade models which are classifiable in subheading 6402.19.1020, HTSUSA, are eligible for duty-free treatment under subheading 9902.64.02, HTSUSA.
Finally, counsel claims that some of the entries in question were ?unlawfully reliquidated.? Section 501 of the Tariff Act of 1930, as amended, 19 U.S.C. 1501, and action 173.3 of the customs Regulations, 19 CFR 173.3, authorize the port director to reliquidate entries voluntarily within 90 days from the date on which notice of the original liquidation was given to the importer, his consignee, or agent. The purpose of voluntary reliquidation is to enable Customs to correct errors in the appraisement, classification, liquidation, or reliquidation of the merchandise within the specified time period. Prior to the enactment of this provision, some of these issues could only be resolved in court. H.R. Rep. No. 91-267, 91st Cong., 2nd Sess., reprinted in 1970 U.S. Code Cong. & Admin. News 3188, 3212. More than one voluntary reliquidation is permitted under this section. However, no adjustments may be made more than 90 days after notice of the original liquidation.
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In addition to claiming that the liquidated classification by Customs Minneapolis is incorrect, the protestant claim that legal notification of the liquidation was not given. Upon review of the record, we find that all but four of the subject entries were red-lined, manually reliquidated, and posted within 90 days from the date of the original liquidation, as set forth under 19 CFR 173.3(a).
According to 19 CFR 159.9(b), the legal notice of liquidation (including reliquidation) for entries is the posting by Customs of the ?Bulletin Notice of Entries Liquidated? (bulletin notice) in a conspicuous place in the customhouse at the port of entry. The bulletin notice of liquidation on Customs Form (CF) 4333 is the only required notice. See 19 CFR 159.9(a). The courts have stated that ?[n]otice of liquidation is intended to apprise importers of any action which may affect their interest, and to afford them opportunity to secure administrative and judicial review.? Goldhofer Fahreugwerk GmbH & Co. v. United States, 13 CIT 54;, 706 F. Supp. 892, aff?d 885 F. ed 858, reh?g denied, suggestion for reh?g declined, cert. Denied 110 S. Ct. 1946 (1989). See also Tropicana Products, Inc. v. United States, 713 F. Supp. 415, 419 (1989).
Applied here, the reliquidation that was posted at the customhouse was the only legal notice of reliquidation. The follow-up notice that appeared in ACS did not amount to notice of a subsequent reliquidation. Due to limitations in the computer system, ACS does not reflect the date of the reliquidation that was posted in the bulletin notice. The ?liquidation date? in ACS is simply the billing date.
It is the practice and policy of the Minneapolis Port to post all bulletin notices in accordance with 19 CFR 159.9(b). Government officials are entitled to a presumption that their duties are performed in the manner required by law. Star Sales & Distributing Corp. v. United States, 10 CIT 709, 710, 663 F. Supp. 1127, 1129 (1986). However, it is not only presumed that Customs Minneapolis posted a bulletin notice of reliquidation for 15 of the subject entries within the 90-day period mandated by the statute, but a search of Customs records confirms that these entries were liquidated within the 90-day period.
The file reflects that with the exception of four entries, 15 entries were timely red-lined, manually liquidated and posted on the ?Bulletin Notice of Entries liquidated? in the Minneapolis Port within the 90-day period. This posting is deemed the legal evidence of liquidation. Thus, Customs obligation was met once it posted the required offline liquidation bulletin notice. The courts have states that ?[importers bear the burden of examining all notices posted in customshouse to determine whether its goods have been liquidated. . .? Penrod Drilling Co. v. United States, 727 F. Supp. 1463, reh?g dismissed, motion to set aside dismissed, 740 F. Supp. 858 (1989). It is also well-settled law that the importer of record has the obligation to check the bulletin of notice of liquidations posted in the customhouse at the port of entry to determine the date of liquidation and to preserve the right to protest. See Tropicana Products, Inc. v. United States.
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HOLDING:
The four entries which were not red-lined will be allowed by Customs. The protest should be denied in full as to the remaining 15 entries. Customs denial of the request for reliquidation of the 15 entries that were red-lined, manually liquidated, and posted in t1he bulletin notice, pursuant to 19 CFR 173.3(a), was not erroneous.
The protest should be GRANTED for the SMU and Mondoblade. They are classifiable in subheading 6402.19.1020, HTSUSA, and are eligible for duty-free treatment under subheading 9902.64.02, HTSUSA, if entered before December 31, 1992. If entered after December 31, 1992, they remain classifiable under subheading 6402.19.1020, HTSUSA, which provides, in part, for other footwear having uppers of which over 90 percent of the external surface area is rubber or plastics.
The protest should be DENIED for the Aeroblade and Coolblade models. They are classifiable in subheading 6402.19.9030, HTSUSA, which provides, in part, for other footwear with outer soles and uppers of rubber or plastics. They are dutiable at the general column one rate at 20 percent ad valorem.
In accordance with section 3A(11)(b) of Customs Directive Number 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be attached to the Customs Form 19, Notice of Action, and furnished 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 (o n that date) the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and to the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division