HQ H286251
OT:RR:CTF:FTM HQ H286251 TSM
Mr. Robert L. Bekalarski
Assistant Director - Enforcement
Industrial & Manufacturing Materials
Center of Excellence and Expertise
726 Exchange Street, Suite 400
Buffalo, New York 14210
RE: Internal Advice Request; Tariff Classification of Coated Woven Container Liners.
Dear Mr. Bekalarski:
This is in response to your Request for Internal Advice, dated April 20, 2017, initiated by Sandler, Travis & Rosenberg, P.A. on behalf of Powertex, Inc. (“Powertex”), concerning the tariff classification of certain coated woven container liners under the Harmonized Tariff Schedule of the United States (“HTSUS”). Pursuant to a request from Powertex, a meeting with members of my staff and counsel for Powertex was held on August 21, 2019.
FACTS:
On March 24, 2017, Powertex filed an internal advice request regarding the tariff classification of certain container liners of woven polyethylene strip measuring less than 5 mm in width, coated on both sides with 2 mm polyethylene, and designed for the shipping of dry, flowable bulk commodities. Two samples of the material used in the manufacturing of the container liners at issue, one uncoated and one coated with polyethylene, were enclosed with the submission. Powertex also alleged that Headquarters Ruling Letter (“HQ”) 967610, dated August 5, 2005, is invalid because it’s issuance effectively revoked New York Ruling Letter (“NY”) L80861, dated December 1, 2004, contrary to the administrative procedures required by 19 C.F.R. § 177.12.
ISSUES:
Whether the container liners under consideration are classified under heading 3923, HTSUS, or heading 6305, HTSUS, and whether HQ 967610 was issued contrary to required administrative procedures.
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the 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 GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
3923 Articles for the convenience or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics
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6305 Sacks and bags, of a kind used for the packing of goods
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Note 1(g) to Section XI, HTSUS, provides:
This Section [Chapters 50 to 63] does not cover:
Monofilament of which any cross-sectional dimension exceeds 1 mm or strip or the like (for example, artificial straw) of an apparent width exceeding 5 mm, of plastics (chapter 39), or plaits or fabrics or other basketware or wickerwork of such monofilament or strip (chapter 46).
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Note 1(h) to Section XI, HTSUS, provides: This Section [Chapters 50 to 63] does not cover: Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39.
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In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Explanatory Note to Chapter 39 provides in pertinent part, the following:
This chapter does not cover:
(p) Goods of Section XI (textiles and textile articles)
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The General EN to Chapter 39 further provides, in pertinent part, the following:
The following products are also covered by this Chapter:
(b) Textile fabrics and nonwovens, either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour.
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Explanatory Note to heading 39.23 provides as follows:
This heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products. The articles covered include:
Containers such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles and flasks.
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The heading excludes, inter alia, household articles such as dustbins, and cups which are used as tableware or toilet articles and do not have the character of containers for the packing or conveyance of goods, whether or not sometimes used for such purposes (heading 39.24), containers of heading 42.02 and flexible intermediate bulk containers of heading 63.05.
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Explanatory Note to subheading 6305.32 provides as follows:
Flexible intermediate bulk containers are usually made of polypropylene or polyethylene woven fabrics and generally have a capacity ranging from 250 kg to 3,000 kg. They may have lifting straps at the four top corners and may be fitted with openings at the top and bottom to facilitate loading and unloading. They are generally used for packing, storage, transport and handling of dry, flowable materials.
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The classification of the container liners at issue is dependent upon whether the material from which they are made is a textile or plastic material. The strips, forming the fabric from which the liners are made, meet the width requirement of Section XI, Note 1(g), for classification as textile materials and not plastics. Therefore, without the coating, the fabric made from such strips is a textile fabric. For textile fabrics coated with plastic on both sides, however, the distinction between a textile and plastic material is whether the coating can be seen with the naked eye with no account being taken of any resulting change of color, consistent with the General EN to Chapter 39. If the coating can be seen with the naked eye, the product is classified in Chapter 39, HTSUS.
Powertex referenced a January 2008 CBP Informed Compliance Publication (“ICP”) on Classification of Coated and Water Resistant Apparel which provides, in pertinent part, that the criterion for visibility is satisfied by any one of the following:
• A change in the surface character of the fabric (HQ 082219, November 11, 1988)
• The coating fills the interstices where the yarns intersect (HQ 961172, August 6, 1998)
• The coating blurs or obscures the weave (HQ 089772, September 11, 1991)
No account should be taken of any resulting change in only shine, reflectivity, dullness or other property which causes the viewer to see the effect rather than presence of plastic material. See HQ 967884, dated October 26, 2005.
Powertex argued that the change to the surface character of the container lining material at issue can be seen when comparing the uncoated sample to the coated sample, contending that the uncoated sample is visibly rough while the coated sample is visibly smooth, slick and glossy, and that while the spaces between the strips are open in the uncoated sample, the spaces between the strips in the coated sample are filled. Powertex further contended that a close-up visual examination of the coated sample reveals small pools and bubbles of the plastic coating at the edges of the individual strips.
Upon review of the samples submitted by Powertex, we disagree. Mere “effects” of plastic coating such as sheen and stiffness are not permissible grounds for determining that coating is visible. One may be able to discern between coated and uncoated fabric and still not see the plastic coating itself, but rather the effects of the coating. While there may be slight differences in appearance between the coated sample and the uncoated sample, this does not necessarily mean that the plastic coating is visible within the standard dictated by the tariff. Therefore, whether the uncoated sample is “visibly rough while the coated sample is visibly smooth, slick and glossy” is not relevant. Physical examination of the subject fabric also reveals no blurring between the warp and weft of the fabric; the underlying weave of the fabric is distinct. Moreover, when comparing the coated portion of the fabric with the uncoated portion, both have equally distinct weaves. Upon comparison of the two samples, we have also not observed that the interstices of the coated sample are visibly filled and feature visible pools and bubbles of plastic coating. Therefore, we find that the character of the coated fabric surface is not clearly changed in comparison with the uncoated fabric, and that the coating with polyethylene on both sides cannot be seen with the naked eye based on relevant criteria.
During the meeting held on August 21, 2019, counsel for Powertex argued that the fabric at issue meets the standard established in HQ 961172, dated August 6, 1998. In that ruling, CBP compared the interstices of certain coated and uncoated fabric samples by holding them up to a source of light. When held to a source of light, it was determined that the interstices of the uncoated samples permitted light to shine through, while the coated samples left no visible gaps in the weave of the fabric. In this regard, we note that upon examination of the samples submitted by Powertex in the instant case, we find that when held to a source of light neither the coated nor the uncoated sample permit light to shine through. In fact, both samples are tightly woven and neither one shows any gaps in the weave, regardless of whether or not they are coated.
Furthermore, counsel for Powertex referenced HQ 082644, dated March 2, 1990, arguing that review of the coated sample under magnification should be allowed when visual examination suggests the presence of a coating. In this regard, we note that in HQ 082644, CBP determined that when visual examination suggests the presence of a coating, magnification is allowable as an aid in determining whether what could be seen on the surface of a fabric was a coating or merely the textile itself. While we agree with CBP’s determination in HQ 082644, in this case we find that nothing resembling a coating was observed during the examination of the coated sample with the naked eye. Accordingly, we conclude that resort to magnification in this instance is not warranted.
The EN to subheading 6305.32, HTSUS, states that “Flexible intermediate bulk containers are usually made of polypropylene or polyethylene woven fabrics and generally have a capacity ranging from 250 kg to 3,000 kg. They may have lifting straps at the four top corners and may be fitted with openings at the top and bottom to facilitate loading and unloading. They are generally used for packing, storage, transport and handling of dry, flowable materials.” The instant container liners are made of polyethylene and used for the shipping of dry, flowable bulk commodities. Therefore, they are classified in subheading 6305.32.00, HTSUS, which provides for “Sacks and bags, of a kind used for the packing of goods: Of man-made textile materials: Flexible intermediate bulk containers.”
We next consider whether HQ 967610 was issued contrary to required administrative procedures. In this regard, Powertex argued that two contradictory rulings were issued on the classification of identical merchandise: NY L80861, dated December 1, 2004, and HQ 967610, dated August 5, 2005 (effectively revoking NY L80861, in place for over 60 days at the time, without following the administrative procedures required by 19 C.F.R. § 177.12). On that basis, Powertex argued that HQ 967610 is invalid.
NY L80861 describes the merchandise at issue as follows:
The product is described as a bulk container liner bag designed for the shipping of dry, flowable bulk commodities. The bag will be made from clear polyethylene strips measuring less than 5 mm in width. The strips are woven and then coated on both sides with white polyethylene coating forming 2 mm thick exterior layers.
HQ 967610 describes the merchandise at issue as follows:
The liners are made from a fabric woven of polyethylene strips which meet the dimensional requirements of man-made fiber textile strips. The strips are woven into a fabric and coated on both sides with a polyethylene plastics material measuring 2 mm in thickness per side.
The above description of the merchandise at issue in NY L80861 shows that that ruling concerned container liners made of polyethylene strips coated on both sides with white polyethylene coating. In contrast, the container liners at issue in HQ 967610 are not described as those made of polyethylene strips coated with white coating. This is supported by our examination of the sample found in the archived case file for HQ 967610. Examination of the sample confirmed that it was made of polyethylene strips coated with clear coating. In this regard, once again we note that only the effects of a clear coating, such as sheen and stiffness, can typically be seen with the naked eye. In contrast, a white coating is more likely to visibly blur or obscure the underlying weave and fill the interstices of the fabric coated, and is therefore more likely to be visible to the naked eye.
Based on the foregoing, we conclude that the record does not support a finding that the merchandise at issue in NY L80861 and HQ 967610 was the same. Therefore, we find that HQ 967610 did not effectively revoke NY L80861 and was not issued contrary to the administrative procedures of 19 C.F.R. § 177.12.
HOLDING:
By application of GRI 1 and 6, we find that the container liners at issue are properly classified under heading 6305, HTSUS. Specifically, they are classified under subheading 6305.32.00, HTSUS, which provides for “Sacks and bags, of a kind used for the packing of goods: Of man-made textile materials: Flexible intermediate bulk containers.” The 2003 column one, general rate of duty is 8.5%. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Chief
Food, Textiles and Marking Branch