CLA-2 CO:R:C:M 956921 DFC
Area Director of Customs
J.F.K. Airport
Building 178
Jamaica, New York 11430
RE: Protest 1001-92-106467; Shoe covers, disposable;
Disposable footwear; Transaction value; T.D. 93-88; HRL
084857
Dear Area Director:
This is in response to Protest 1001-92-106467 covering a
shipment of disposable shoe covers. A sample was submitted for
examination.
FACTS:
The sample is a disposable shoe cover with an elasticized
opening. According to the documentation submitted with the
protest, the goods are referred to as surgical overshoes. They
are of the type worn by persons in hospital operating rooms over
regular shoes. Customs Laboratory Report 2-92-10708-00 dated
March 17, 1992, states that the upper of the shoe cover is made
of non-woven textile (polypropylene fibers) which is 41% by
weight of the entire sample. The non-woven sole is 59% by weight
of the entire sample and is composed of plastic, polyester and
wood pulp. The outer surface of the sole has been laminated with
a plastic to make it waterproof and to provide resistance to
slipping and abrasions.
The entry for the shoe covers was liquidated on August 28,
1992, under subheading 6404.19.35, Harmonized Tariff Schedule of
the United States (HTSUS), which provides for footwear with outer
soles of plastics and uppers of textile material, other. The
merchandise was appraised at total invoice value of $10,591 net,
pkd. A protest against the classification and appraisement of
the merchandise was timely filed on October 22, 1992.
Counsel for the protestant maintains that the merchandise is
properly classifiable under subheading 6307.90.90, HTSUS, which
provides for other made up textile articles. Alternatively, it
is asserted that the merchandise is classifiable under subheading
6405.90.20, HTSUS, which provides for disposable footwear,
designed for one-time use.
Counsel also disagrees with appraisement at total invoice
value. He asserts that the cost of marine insurance and
international freight should have been deducted from the price
[$10,591 CIF- $1.944.] to arrive at the proper entered value
which is $8,647.
ISSUES:
Are the disposable shoe covers classifiable under subheading
6404.19.35, HTSUS, as footwear, under subheading 6405.90.20,
HTSUS, as disposable footwear, or under subheading 6307.90.90,
HTSUS, as textile articles?
What is the appraised value of the merchandise?
LAW AND ANALYSIS:
Classification of goods under the HTSUS 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, and, provided
such headings or notes do not otherwise require, according to
[the remaining GRI's]." In other words, classification is
governed first by the terms of the headings of the tariff and any
relative section or chapter notes.
The competing provisions read, as follows:
6307 Other made up articles, including dress patterns
* * *
6307.90 Other:
* * *
6307.90.99 Other. . . . . .
* * *
6404 Footwear with outer soles of rubber, plastics,
leather or composition leather and uppers of
textile materials:
Footwear with outer soles of rubber or
plastics:
6404.19 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 over-lapping the
upper:
* * *
6404.19.35 Other. . . . . .
* * *
6405 Other footwear:
* * *
6405.90 Other:
Disposable footwear, designed for one-
time use. . . . . . .
Note 1(a) to chapter 64, HTSUS, reads as follows;
1. This chapter does not cover:
(a) Footwear without applied soles, of textile
material (chapter 61 or 62)[.]
The Harmonized Commodity Description and Coding System
(HCDCS) Explanatory Notes to the HTSUS (EN), although not
dispositive, should be looked to for the proper interpretation of
the HTSUS. See T.D. 89-80, 54 FR 35127, 35128 (August 23, 1989).
The General EN to chapter 64, HTSUS, explains, in pertinent
part, that "[f]or the purposes of this Chapter, the term
'footwear' does not, however, include disposable foot or shoe
covering of flimsy material (paper, sheeting of plastics, etc.)
without applied soles. These products are classified according
to their constituent material."
On November 17, 1993, in T.D. 93-88 (27 Cust. Bull. & Dec.
No.46, Customs published certain footwear definitions used by
Customs import specialists in classifying footwear under Chapter
64, HTSUS. Inasmuch as these definitions were provided merely as
guidelines and are not to be construed as Customs rulings, they
are not dispositive. However, we believe they should be
consulted. On page 6 of that document the term "Line of
Demarcation" is defined, as follows:
A 'line of demarcation' exists if one can indicate on
the item the line along which the sole ends and the
upper begins. For example, a knit infant's bootie does
not normally have a 'line of demarcation.'
We are aware, as counsel for the protestant points out, of
Headquarters Ruling Letter (HRL) 084857 dated June 28, 1989,
wherein Customs ruled that a disposable shoe cover was
classified under subheading 6307.90.90, HTSUS, as other made up
textile articles. However, the shoe cover which was the subject
of that ruling, unlike the instant shoe cover, was made entirely
of fabric and was joined down the middle and thus lacked an
"applied sole." In classifying this type of footwear, we follow
the distinction set out in the Compendium of Classification
Opinions HCDCS, Brussels First Edition (1987) between the flimsy
footwear in chapters 39 and 63 and those in chapter 64 on the
basis of their having a separate piece of material which is the
sole. The top of the sample's blue coated piece constitutes the
"line of demarcation" indicating where the sole ends and the
upper begins. See T.D.93-88. The blue portion of the cover in
contrast with the white portion is designed to be in contact with
the ground and will be, approximately, under the foot and not
covering its side or top.
Inasmuch as the subject disposable shoe cover has a plastic
sole and a textile upper, its classification is mandated under
heading 6404, HTSUS; specifically subheading 6404.19.35, HTSUS.
Although subheading 6405.90.20, HTSUS, provides for disposable
footwear, designed for one-time use, such as the subject
footwear, it can only be classified under this provision if it
has outer soles and uppers of a material or combination of
materials not referred to in the preceding headings of Chapter
64. See EN 6405, page 879.
With respect to the appraisement issue, the merchandise was
appraised on the basis of transaction value and the entered value
was based upon the invoice price of the merchandise. Transaction
value is based upon the "price actually paid or payable" for the
imported merchandise, plus five enumerated additions. Section
402(b) of the Tariff Act of 1930, as amended by the Trade
Agreements Act of 1979 (TAA; 19 U.S.C. 1401a(b)). The "price
actually paid or payable" is exclusive of any costs, charges or
expenses incurred in the international shipment of the
merchandise.
The invoice accompanying the entry indicates a price of
54880 French Francs ($10,591). The invoice provided by counsel
for the protestant indicated that the terms of the sale were CIF.
Therefore, the invoice price included shipping costs. The CIF
terms on the bottom portion of the invoice which has apparently
been cut off from the initial copy provided to Customs. Attached
to the protest is what appears to be a freight bill, indicating
prepaid freight in the amount of $1944. The freight bill
identified the foreign seller as the exporter, and the importer
as the consignee. The importer takes the position that the
transaction value of the imported merchandise should be the
invoice price of $10,591, less $1944 in shipping costs. The
documentation presented shows that the invoice price of the
merchandise included the shipping costs and that the amount of
the shipping was $1944. The appraised value of the merchandise
should be the invoice price less the shipping costs.
HOLDING:
The disposable shoe covers are dutiable at the rate of 37.5%
ad valorem under subheading 6404.19.35, HTSUS.
The appraised value of the merchandise should be the invoice
price less the shipping costs.
The protest should be denied as to the classification of the
disposable shoe covers but should be allowed with respect to the
appraisement issue. 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, though 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,
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division