HQ 955720
May 6 1994
CLA-2 CO:R:C:M 955720 DFC
Tariff NO.: 6404.19.35
District Director of Customs
U.S. Customs Service
4430 E. Adamo
Suite 301
Tampa, Florida 33605
RE: Protest 1801-93-100033; Footwear; Soles, wool felt; 19
CFR Part 177; Detrimental reliance; DD 863424; HQ 952935
Dear District Director:
This is in response to Protest 1801-93-100033 covering a
shipment of wool felt footwear produced in Germany.
FACTS:
The merchandise involved has been described as footwear
having a wool felt upper formed to completely encircle the front
portion of the foot, with a low heel portion permitting the foot
to slip in and out of the shoe. The formed upper was glued to a
sole consisting of three components which themselves are glued
together. The outer sole consists of a layer of wool felt glued
to a mid-sole consisting of rubber affixed to a molded footbed of
composition cork molded and fashioned to orthopedically conform
to the contours of the foot.
In DD 863424 dated June 10, 1991, addressed to counsel for
the protestant, the District Director of Customs in Chicago ruled
that the footwear in issue is classifiable under subheading
6405.20.60, Harmonized Tariff Schedule of the United States
(HTSUS), which provides for other footwear with uppers of textile
materials, with soles and uppers of wool felt. The applicable
rate of duty for this provision is 2.8% ad valorem.
In Headquarters Ruling Letter (HRL) 952935 dated January 6,
1993, addressed to counsel for the protestant, Customs revoked DD
863424 holding that the wool felt footwear is properly
classifiable under subheading 6404.19.35, HTSUS, which provides
for footwear with outer soles of rubber, plastics, leather or
composition leather and uppers of textile materials, footwear
with outer soles of rubber or plastics, other, footwear with open
toes or open heels, footwear of the slip-on type that is held to
the foot without the use of laces or buckles or other fasteners,
the foregoing except footwear of subheading 6404.19.20, and
except footwear having a foxing or foxing-like band wholly or
almost wholly of rubber or plastics applied or molded at the sole
and overlapping the upper, other. The applicable rate of duty
for this provision is 37.5% ad valorem.
Protestant requests prospective application of HRL 952935
based on its reliance upon DD 863424, evidenced by its contracts,
shipping, import and sales of the felt-soled footwear.
Protestant also asks that the entry covered by DD 863424 be
reliquidated under subheading 6405.20.60, HTSUS.
ISSUE:
Did the protestant reasonably rely on DD 863425 so as to
warrant a delay in the effective date of HRL 952935 pursuant to
section 177.9(d)(3), Customs Regulations (19 CFR 177.9(d)(3))?
LAW AND ANALYSIS:
Section 177.9(d), Customs Regulations (19 CFR 177.9(d)),
reads in pertinent part, as follows:
(d) Modification or revocation of ruling letters-(1)
Generally. Any ruling letter found to be in error or not in
accordance with the current views of the Customs Service may be
modified or revoked. Modification or revocation of a ruling
letter shall be effected by Customs Headquarters by giving notice
to the person to whom the ruling letter was addressed and, where
circumstances warrant, by the publication of a notice or other
statement in the Customs Bulletin.
(2) Effect of modifications or revocations of ruling
letters. The modification or revocation of a ruling letter will
not be applied retroactively with respect to the person to whom
the ruling was issued, or to any person directly involved in the
transaction to which that ruling related, Provided:
(i) The request for a ruling contained no misstatement
or omission of material facts,
(ii) The facts subsequently developed are not
materially different from the facts on which the ruling was
based.
* * * *
Section 177.9(d)(3), Customs Regulations (19 CFR
177.9(d)(3)), reads in pertinent part, as follows:
(3) Effective dates. Generally, a ruling letter
modifying or revoking an earlier ruling letter will be effective
on the date it is issued. However, the Customs Service may, upon
application or on its own initiative, delay the effective date of
such a ruling for a period of up to 90 days from the date of
issuance. Such a delay may be granted with respect to the party
to whom the ruling letter was issued or to any other party,
provided such party can demonstrate to the satisfaction of the
Customs Service that they reasonably relied on the earlier ruling
to their detriment . . . .
Protestant asserts that all five conditions of 19 CFR
177.9(d)(2) were met. We are of the opinion that the first two
conditions were not met by the protestant. First, the original
request for a ruling dated May 13, 1991, contains a misstatement
of a material fact. Specifically, protestant stated that the
"outer sole consists of a layer of wool felt glued to a mid-sole
consisting of rubber . . . ." In reality the wool felt
material has a light adhesive backing rather than being glued to
the rubber sole. Underneath the easily removable felt is a 1/8th
inch thick rubber sole which is quite sturdy and has been "cross
hatched" along its entire surface to ensure good traction. See
HRL 952935.
The second condition was not met in that the facts
subsequently developed were materially different from the facts
on which the ruling was based. Specifically, HRL 952935 comments
on this as follows:
In its condition as imported, we do not believe that
the shoe is a commercial reality. The felt covered
rubber sole would be dangerous when walking on any non-
traction surface such as hard wood or tile floors. In
this condition, there is no traction and the wearer
could easily slip and fall. Moreover, with normal use
the flimsy felt material would be easily worn off the
sole within a short time. We are of the opinion that
the felt layer is "fugitive" and that all, or almost
all, of the purchasers will remove the felt if it is
present when purchased. Furthermore, regarding the
'commercial reality,' we have a catalog which shows
that similar, if not identical, footwear is advertised
and sold as wool clogs with rubber soles. Contrary to
your assertion, no mention is made of felt outer soles.
In view of the foregoing, it is our position that protestant
is not entitled to a delay in the effective date of HRL 952935.
Protestant also claims that it relied on a letter dated
November 27, 1992, from the Area Director of Customs in New York,
wherein it was stated that DD 863424 "will continue to be used by
all ports and liquidation of any entries of that merchandise will
not be withheld." It is our view that DD 863424 is only
applicable to footwear identical to the footwear described
therein. See 19 CFR 177.9(b)(2). As stated in HRL 952935, the
tariff classification in DD 863424 was based on the description
and sample provided in the May 13, 1991 letter, as well as
protestant's assertion that "the outer sole is of wool felt."
The footwear covered by the entry in issue is not identical to
that described in DD 863424.
Protestant claims that pursuant to 19 U.S.C. 1504, the entry
involved was deemed liquidated one year after the date of entry,
which was November 6, 1991. An examination of the ACS record of
extension and liquidation reveals that the entry was properly
extended on August 15, 1992.
It remains our opinion that classification of the wool felt
footwear under subheading 6404.19.35, HTSUS, is correct for the
reasons set out in HRL 952935, HTSUS.
HOLDING:
The protestant is not entitled to a delay in the effective
date of HRL 952935.
The footwear covered by the entry in issue is not identical
to that described in DD 863424. Therefore, protestant was not
justified in relying on a letter from the Area Director of
Customs in New York stating that DD863424 "will continue to be
used by all ports and liquidation of any entries of that
merchandise will not be withheld."
An examination of the ACS record of extension and
liquidation reveals that liquidation of the entry in issue was
properly extended.
The wool felt footwear is dutiable at the rate of 37.5% ad
valorem under subheading 6404.19.35, HTSUS.
The protest should be denied. In accordance with Section
3A(11)(b) of Customs Directive 099 3550, dated August 4, 1993,
Subject: Revised Protest Directive, this decision, together with
the Customs Form 19, should be mailed by your office to the
protestant, through counsel, 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 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 the public via the Diskette Subscription Service, Lexis,
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division