CLA-2 RR:CR:TE 963602 GGD
Joseph P. Cox, Esquire
Stein, Shostak, Shostak & O’Hara
515 South Figueroa Street
Los Angeles, California 90071-3329
RE: Portable, Soft-Sided, Insulated Cooler Bags; SGI,
Incorporated v. United States, 122 F.3d 1468 (Fed. Cir.
1997); Cooler Bags with an Outer Surface of Fabric-backed,
Compact Plastics
Dear Mr. Cox:
This letter is in response to your requests of May 6, 1999 and July 30, 1999, on behalf of your client, Markoff Industries, Inc., concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of soft-sided, insulated cooler bags manufactured in China. Samples were submitted with your requests.
FACTS:
In your initial request, by letter of May 6, 1999, you asked that our New York office forward the file to Customs Headquarters in the event that the New York office did not agree with your proposed classification of the bags in subheading 3924.10.50, HTSUSA, which provides for “Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other.”
The initial request claimed that the exterior surface of the bags is composed of “Vylon” - described as a sheeting of cellular vinyl plastics backed with a loose-weave nylon or polyester
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fabric for reinforcement purposes. Customs laboratory report number 2-1999-30428, dated June 25, 1999, reflects the testing of the sample bag’s outer surface material. The report states that the sample swatch is composed of a polyester type fiber woven fabric that is coated, covered, or laminated with a layer of noncellular plastic. Based on this evidence, the New York office opined that the cooler bags were classifiable in subheading 6307.90.9989, HTSUSA, and subsequently prepared and forwarded to Customs Headquarters a package containing all relevant materials.
The two sample bags differ essentially only in size and shape. Both articles are portable, soft-sided, insulated cooler bags that are primarily designed and intended to store and preserve food and/or beverages. The larger cooler bag measures approximately 9 inches in width by 6 inches in depth by 6-3/4 inches in height, and features a zippered closure, a carrying strap, and an exterior, open top, flat pocket. The smaller cooler bag measures approximately 6-1/2 inches in width by 4-1/2 inches in depth (at the bottom) by 10 inches in height (when closed). The bag is closed by folding and rolling down the top portions and joining together the tabs of a hook and loop fabric fastener.
As noted, in part, in the Customs laboratory report above, the outer layer of each bag is composed of a polyester fiber woven fabric that has been coated, covered or laminated with a non-cellular (compact) plastic. The plastic surface of the outer layer faces outward. The middle layer of each bag is composed of plastic foam which measures approximately 1/4 inch in thickness and which functions to both insulate and cushion contents. The inner layer of each bag is a waterproof lining composed of unsupported sheeting of plastic.
ISSUE:
Whether the portable, soft-sided, insulated cooler bags are classified under heading 3924, HTSUSA, as containers of plastics; or under heading 6307, HTSUSA, as other made up (textile) articles with outer surface of fabric-backed compact plastics.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the
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terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI.
The classification of certain portable, soft-sided, insulated cooler bags with outer surface of plastics, was examined by the Court of Appeals for the Federal Circuit
(CAFC) in SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997). The CAFC focused on whether food or beverages were involved with the eo nomine exemplars set forth in the tariff provisions at issue and, without discussion of heading 4202 exemplars that organize, store, protect, and/or carry food or beverages, the CAFC held that the appropriate classification for the cooler bags was subheading 3924.10.50, HTSUSA, the provision for “Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other.” The Court stated that this classification “does encompass exemplars that are ejusdem generis with the coolers because their purpose is to contain food and beverages.” The exemplars (specifically enumerated in subheading 3924.10.10) which the Court noted in particular were the “various household containers for foodstuffs such as salt, pepper, mustard, and ketchup dispensers and serving pieces for food.”
This office concluded that the CAFC’s decision in SGI should be implemented. Instructions were issued to Customs field personnel on March 18, 1998 (and approved for dissemination to members of the importing community), by which the principles of the CAFC’s decision were expressly extended to portable, hard or soft-sided, insulated coolers and similar insulated containers with outer surface of plastics or with outer surface of textile materials (the latter of which are classified in subheading 6307.90.9905, 6307.90.9907, or 6307.90.9909, HTSUSA, depending upon whether the article’s outer surface is composed of cotton, man-made fibers, or other textile materials, respectively); and to such articles that feature exterior or interior pockets, webbing, straps, etc., provided that the additional features do not alter the container’s primary purpose to store and preserve food and/or beverages.
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On September 10, 1998, an additional instruction was issued to Customs field personnel (and approved for dissemination to members of the importing community), by which the principles of the CAFC’s decision were expressly extended to foodstuff-related, insulated containers whose exterior layer is composed of a textile fabric that is coated, covered or laminated with compact (non-cellular) plastics, with the plastic surface of the layer facing outward. Such containers, including the two bags at issue herein, are classified in subheading 6307.90.9989, HTSUSA, a provision which is currently not subject to quota/visa requirements.
You assert that the distinction Customs has implemented between articles of textile fabric combined with cellular plastic and articles of textile fabric combined with non-cellular plastic, is arbitrary, unreasonable, and unjustified. We disagree. Customs is required by law to classify merchandise under the HTSUSA in accordance with the GRI, the terms of the headings, and the chapter notes. Customs also looks to the guidance provided by the EN, decisions of the judiciary, etc. In this case, if the material comprising the outer layer of the subject bags had consisted (as claimed) of cellular plastics backed by textile fabric present merely for reinforcing purposes, the subject bags would have been classifiable under heading 3924, HTSUSA. The material itself would have been classifiable under heading 3921, HTSUSA, not as a textile material, but as a sheet of cellular plastics (combined with textile materials), based upon the following analysis.
The EN to chapter 39, HTSUSA, indicate that (except for certain wall or ceiling coverings) “the classification of plastics and textile combinations is essentially governed by Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59.” Among other goods, chapter 59, HTSUSA, covers impregnated, coated, covered or laminated textile fabrics. In pertinent part, Note 2(a) to chapter 59, HTSUSA, states that heading 5903 applies to:
Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than:
(5) Plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (chapter 39)
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In light of the analysis above, the decision in SGI, the instructions implementing that decision, Customs laboratory testing, and the fact that the subject cooler bags have an outer layer that is composed of fabric-backed compact plastics, the articles are classified in subheading 6307.90.9989, HTSUSA.
HOLDING:
The two portable, soft-sided, insulated cooler bags are classified in subheading 6307.90.9989, HTSUSA, the provision for “Other made up articles, including dress patterns: Other: Other: Other, Other: Other.” The general column one duty rate is 7 percent ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division