CLA-2 RR:TC:TE 958135 SK
Port Director
U.S. Customs Service
Thomas P. O'Neill, Jr. Federal Bldg.
10 Causeway Street
Boston, MA 02222-1059
RE: Decision on Application for Further Review of Protest No.
0401-95-100377; synthetic multifilament yarn; 5402.41.9040,
HTSUSA.
Dear Sir:
This is a decision on application for further review of a
protest timely filed by Schenker International, Inc., on behalf
of Ardmore Fibers Co., on May 16, 1995, against your decision
regarding the classification of synthetic fibers. At issue is a
single entry made at the port of Boston on January 19, 1995, and
liquidated on April 14, 1995.
FACTS:
The subject merchandise consists of synthetic fibers and is
described as "3 Denier Semi-Dull Round X Section T66 Nylon Drawn
Plaited Tow from Waste Fibers." Protestant advocates
classification under subheading 5505.10.0020, Harmonized Tariff
Schedule of the United States Annotated (HTSUSA), which provides
for waste of nylon fibers. The merchandise was classified by
Customs at liquidation under subheading 5501.10.0000, HTSUSA,
which provides for synthetic filament tow of nylon.
A laboratory analysis was performed by the Customs lab at
the New York Seaport. The lab report states:
"The sample consists of two bundles of continuous
multifilament
yarns. One bundle (loose) measuring approximately 1.75
meters
in length and the other (tied up both ends) measuring
approximately
1.6 meters in length
The loose bundle is composed of yarns containing 17
filaments
per yarn. The yarns are of 58.1 decitex and each
filament is of
3.42 decitex. The tied up bundle is composed of two
types of
yarns. One type is semidull in luster and contains 17
filaments
and the other type contains 34 filaments and [is]
bright in luster.
17 filament yarns are of 46.2 decitex and each filament
is of 2.72
decitex. 34 filament yarns are of 79.8 decitex and
each filament
is of 2.35 decitex."
The samples sent to the lab were not in their condition as
imported. After importation, the samples were cut into shorter
lengths and placed into a plastic bag for submission to the lab.
ISSUE:
What is the proper classification of the subject
merchandise?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is governed
by the General Rules of Interpretation (GRI's). GRI 1 provides
that classification shall be determined according to the terms of
the headings and any relative section or chapter notes, taken in
order. Merchandise that cannot be classified in accordance with
GRI 1 is to be classified in accordance with subsequent GRI's.
Protestant claims that the subject merchandise is properly
classifiable under subheading 5505.10.0020, HTSUSA, as waste of
nylon fibers. The basis for Protestant's position is that the
imported merchandise is made from waste tow and there is no
similarity between it and first quality tow. The Port Director's
position is that the subject merchandise is classifiable as tow,
even if made from waste or substandard tow, and that waste does
not include materials that have been reconditioned or recycled
into new and different materials such as the instant merchandise.
This office's initial inquiry is whether the subject
merchandise is classifiable as "waste" under the HTSUSA. The
long-standing judicial definition of waste for purposes of tariff
classification is set forth in Harley Co. v. United States, 14
Ct. Cust. Appls. 112, T.D. 41644 (1926), and was restated in
David Studner et al. v. United States, 63 Cust. Ct. 1, C.D. 3865,
300 F. Supp. 1394 (1969), as follows:
"[I]n the tariff sense, waste is a term which includes
manufactured
articles which have become useless for the original
purpose for
which they were made and fit only for
remanufacture into something
else. It also includes refuse, surplus, and useless
stuff resulting from
manufacture or from manufacturing processes and
commercially
unfit, without remanufacture, for the purposes for
which the original
material was suitable and from which material such
refuse, surplus,
or unsought residuum was derived. The latter class of
waste might
be appropriately designated as new waste and includes
such things
as tangled spun thread, coal dust, broken or spoiled
castings fit only
for remanufacture."
In E. Dillingham, Inc. v. United States, 70 Cust. Ct. 43;
Cust. Dec. 4406 (1973), the Customs Court determined that nylon
66, advanced waste in tow form, which could not be used for its
original intended purpose as yarn without further remanufacture,
was classifiable under item 309.75, Tariff Schedules of the
United States Annotated (TSUSA), as "advanced waste of man-made
fibers." The instant case is distinguishable from E. Dillingham
for several reasons. First, the merchandise at issue is useable
for its original intended purpose as yarn; it may not be first-quality, and it may not be marketable as originally expected, but
it does have a use other than as waste. Furthermore, item
309.75, TSUSA, provided for advanced waste. The HTSUSA, which
replaced the TSUSA in 1989, eliminated this provision for
advanced waste. Heading 5505, HTSUSA, provides only for "waste
of nylon fibers."
Waste is a byproduct of any one of a number of textile processes,
but does not include waste materials that have been reconditioned
or recycled into new and different materials. Although the
subject material was manufactured from recycled source material,
Customs does not deem it "waste" for tariff classification
purposes because the merchandise is manufactured into a new
material (yarn) which is not used in the manner of waste. The
fact that the subject merchandise was made from waste material
does not mean that it remains waste material after additional
processing. See Headquarters Ruling Letter (HRL) 951835, dated
August 19, 1992, where this office classified rope made of scrap
magnetic tape as rope rather than as scrap or waste. See also
HRL 958133, dated December 7, 1995.
The subject merchandise was classified at liquidation under
subheading 5501.10.0000, HTSUSA, which provides for synthetic
filament tow of nylon.
The lab analysis performed on this merchandise reveals that
Customs' classification of the subject merchandise is improper.
Heading 5501, HTSUSA, provides for synthetic filament tow. As
stated above, the lab's findings reveal that the subject
merchandise consists of yarn, not filament tow. Accordingly,
classification is improper under heading 5501, HTSUSA.
Heading 5402, HTSUSA, provides for, "[S]ynthetic filament
yarn (other than sewing thread), not put up for retail sale,
including synthetic monofilament of less than 67 decitex." The
subject merchandise consists of synthetic filament yarn and
therefore classification is proper within this heading.
Subheading 5402.41.9040, HTSUSA, provides for, in pertinent part,
"[O]ther yarn, single, untwisted or with a twist not exceeding 50
turns per meter: of nylon or other polyamides: other...
multifilament with a twist of 5 turns or more per meter." The
lab report substantiates that the subject merchandise consists of
nylon multifilament yarn. The National Import Specialist in New
York examined the yarn under a magnifying glass and found the
subject merchandise to possess a twist of more than 5 turns per
meter. Based on the foregoing, classification is proper under
subheading 5402.41.9040, HTSUSA.
HOLDING:
The subject merchandise is classifiable under subheading
5402.41.9040, HTSUSA, which provides for "[S]ynthetic filament
yarn (other than sewing thread), not put up for retail sale,
including synthetic monofilament of less than 67 decitex: other
yarn, single, untwisted or with a twist not exceeding 50 turns
per meter: of nylon or other polyamides: other... multifilament
with a twist of 5 turns or more per meter." The applicable rate
of duty at the time of entry was 9.8 percent ad valorem. The
applicable textile quota category is 606.
As the rate of duty under the classification indicated above
is the same as the rate under which the subject merchandise was
liquidated, you should deny the protest in full.
A copy of this decision should be attached to the Form 19
and provided to the Protestant as part of the notice of action on
the protest. 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
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 this decision
must be accomplished prior to the mailing of the decision.
Sixty days from the date of this 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 to the public via the Diskette Subscription Service,
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division