CLA 2 RR:CR:TE 960625 SG
Port Director of Customs
Port of Los Angeles/Long Beach Seaport Area
300 South Ferry Street
Terminal Island, California 90731
RE: Decision on Application for Further Review of Protest No. 2704-97-100519,
concerning the classification of women’s sandals; Note 4(b) to Chapter 64;
shoe laces included in calculating the external surface area of upper.
Dear Sir:
This is a decision on an Application for Further Review of a protest timely filed on February 6, 1997, by Elon A. Pollack, Esq. on behalf of Carrini, Inc. against your decision regarding the proper classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) for women’s sandals. The entries at issue were liquidated on November 8, and 15, 1996.
FACTS:
The merchandise at issue, identified as style 7606, is a woman's high heeled shoe with an exterior surface comprised of five (5) sets of rubber/plastic straps. These straps begin at the toes and run to the ankle. Each strap is folded to create a loop. The ends of the loop are then sewn into the sole of the shoe, thereby forming a type of eyelet. The ten (10) eyelets, five (5) per side, are then brought together by means of a textile lace. The lace is threaded through the eyelets to pull the loop/strap closed around the wearer’s foot. The laces complete the upper by holding the loops around the wearer’s leg. While worn the laces will be visible.
The entries covering styles 7606 were liquidated on November 8 and 15, 1996, under subheading 6402.99.30, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), with duty at the rate of 37.5% ad valorem. The protest was timely filed on February 6, 1997.
Protestant claims that the laces were improperly included in determining the external surface area of the shoe’s upper, and that the shoe is properly classifiable under subheading 6402.99.18, HTSUSA, with duty at the rate of 18.6% ad valorem.
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The surface area of the lace was included in the Customs laboratory calculation that textile material covered 12.4 % of the external surface of the upper (ESAU). If the lace had not been included in this calculation, the upper would have been reported as being entirely composed of rubber or plastics, thereby, causing the shoe to be classified as footwear of which over 90% of the surface area of the upper is rubber or plastic as claimed by the protestant.
ISSUE:
What is included in measuring the external surface area of the upper?
LAW AND ANALYSIS:
Classification of goods 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, and, provided such heading 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 are as follows:
6402 Other footwear with outer soles and uppers of rubber or
plastics:
* * *
6402.99
Other:
Having uppers of which over 90 percent of the external surface area
(including any accessories or reinforcements such as those
mentioned in note 4(a) to this chapter) is rubber or plastics
(except footwear having a foxing or a foxing like band applied or
molded at the sole and overlapping the upper and except footwear
designed to be worn over, or in lieu of, other footwear as a
protection against water, oil, grease or chemicals or cold or
inclement weather):
* * *
6402.99.18 Other:
* * *
6402.99.30
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
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except footwear of subheading 6402.99.20 and except footwear
having a foxing or a foxing like band wholly or almost
wholly of rubber or plastics applied or molded at the sole
and overlapping the upper...
Note 3 to chapter 64, HTSUSA, reads, as follows:
3. For the purposes of this chapter:
(a) the terms “rubber” and “plastics" include woven fabrics or other textile products with an external layer of rubber or plastics being visible to the
naked eye;...
The Harmonized Commodity Description and Coding System Explanatory Notes (EN) to the HTSUSA, although not dispositive should be looked to for the proper interpretation of the HTSUSA. See T.D. 89 80, 54 FR 35127, 35128 (August 23, 1989). In part, General EN (D) to chapter 64, HTSUSA, provides that “(f)or the purposes of the classification of footwear in this Chapter, the constituent material of the uppers must also be taken into account... .” With respect to uppers which consists of two or more materials, note 4(a) to chapter 64 states that:
4. Subject to note 3 to this chapter:
(a) The material of the upper shall be taken to be the
constituent material having the greatest external
surface area, no account being taken of
accessories or reinforcements such as ankle
patches, edging, ornamentation, buckles, tabs,
eyelet stays or similar attachments[.]
In T.D. 93 88, dated October 25, 1993, “external surface area of the upper” is defined, in pertinent part, as:
The “external surface” of the upper is, in general, the outside surface of what you see covering the foot (and leg, if applicable) when the shoe is worn.
A. It does not include:
1. Accessories and reinforcements such as ankle patches, edging, ornamentation, (i.e., tassels, pompoms, or braids), buckles, tabs, eyelet stays, slide fasteners, or similar attachments. Other examples include the leather pieces sewn on top of the lower part of the upper in basketball shoes, and “filled in” embroidery.
* ** *
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5. Shoe laces which do not cover the foot by themselves and VELCRO straps which are a substitute for shoe laces.
In determining the proper classification for the subject merchandise there are two requisite steps which must be followed. First, a review of T.D. 93 88 reveals that ornamentation, among other things, is not included in the determination of the external surface area of the upper. However, having an understanding of how the “external surface area of the upper” is defined does not by itself bring us to the appropriate provision in the tariff for this merchandise. Thus, the second step involves compliance with the appropriate subheading provisions for the merchandise.
Protestant claims that Customs classification is incorrect under the GRI’s. It is their position that the sandals at issue here do not meet the criteria for classification under subheading 6402.99.30, HTSUSA, because of the presence of the laces. It is protestant’s understanding that the headnote only applies to "footwear with open toes or open heels" “...that is held to the foot without the use of laces or buckles or fasteners . . ." The heading has been interpreted by protestant as excluding shoes which are held to the foot by use of laces. Protestant states that it would be impossible to wear the submitted shoe absent the use of laces, as the shoe would remain open around the wearer’s foot and would fall off with the slightest movement. Therefore, it is maintained that classification for the sandals is under subheading 6402.99.30, HTSUSA, is incorrect. The appropriate provision for these sandals is claimed to be subheading 6402.99.1865, HTSUSA.
We disagree. The provision for "footwear with open toes or open heels" is separated from the provision for "footwear of the slip on type, that is held to the foot without the use of laces or buckles or fasteners . . ." by a semicolon. We interpret this construction to mean that open toe or heel shoes are to be considered separately for the purposes of classification under subheading 6402.99.30, HTSUSA. Consequently, since the sandals in issue qualify for classification as open toe or open heel footwear, they need not meet the requirement for slip on footwear that they be "held to the foot without the use of laces or buckles or fasteners . . ." in order to qualify for classification under subheading 6402.99.30, HTSUSA.
Protestant claims that examination of the subject shoe reveals that the laces purpose is not to cover the foot, rather that the laces close the plastic/rubber straps around the wearer’s foot.
Consequently, it is their belief that under the policy expressed in T.D. 93-88, the laces should not be included in determining the constituent material of the upper’s external surface. In support thereof HQ 081305 dated March 10, 1988, is cited. In that ruling Customs noted that an upper imported without laces is not considered to be an unfinished upper. Moreover, the ruling went on to state that an upper imported with laces is considered two items for tariff purposes, i.e., and upper and laces.
We have reviewed HQ 081305 which dealt with among other things, whether shoelaces should be considered as part of the external surface area of the upper. We disagree with protestant’s statement that under that ruling laces would never be part of the “external surface” of
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a shoe. The ruling deals with hi-top aerobic shoes which are very different from the sandals at issue here. Laces on aerobic shoes clearly serve a principal function of keeping the shoe on the wearer’s foot. The laces on the sandal at issue are not only functional (keeping the shoe on) but cover the skin when the shoe is worn and appear to be part of the design element of the shoe. The ruling states, quite clearly, that “(s)hoe laces that do not cover the skin but only hold together the eyelet stays have never been considered part of the upper’s exterior surface.” The ruling goes on to state that laces were not intended to be part of the uppers “external surface,” per se.
It is protestant’s belief that the purpose of the laces on the shoe in question is not to cover the foot. Protestant indicates that a Roman sandal is an example of a shoe in which the lace does cover the foot. We note that the lace in both the Roman sandal and the shoe at issue here hold the sandal to the foot. Without the laces you would have a sole/base of a sandal that has a number of strips attached to the base or sole of the shoe, but not a wearable shoe [a Roman sandal has two strips through which the laces are drawn, the shoe here has ten]. In both cases the laces are visible, except where they crisscross each other, and in the shoe at issue, where they go through the eyelets. Consequently, while TD 93-88 requires that laces not be included when “they do not cover the foot by themselves”, it is our view that in the instant case the lace actually covers part of the foot. Accordingly, TD 93-88 does not preclude the shoelaces from being included in the calculation of the external surface of the shoes at issue.
Protestant next argues that the laces should be excluded when analyzing the external surface of the shoe at issue as the laces are not firmly affixed to the base of the shoe. The laces are easily removable, and therefore not integral to the exterior surface of the shoe. Protestant states that the shoe can be imported as an upper with or without the laces. It appears to be Protestant’s opinion that the laces are “loosely attached appurtenances” and are not part of the upper at all and not included in measuring the external surface area.
The courts consistently held under the Tariff Schedules of the United States Annotated (TSUSA), that attached appurtenances are excluded when measuring the external surface area of the upper because they provided only ornamental value and did not contribute to the utility of the uppers. See. e.g. United States v. Castelazo & Associates A/C Stonewall Trading Company, 57 CCPA 16, C.A.D. 970 (1969), affirming 60 Cust. Ct. 650, C.D. 3486 (1968); where fur trimmed buttons attached to the uppers having merely ornamental value and no utility, they were not parts of the upper for tariff purposes. T.D. 70 238(19) dated October 15, 1970 (1970); HQ 051937 dated June 6, 1977; NY 807388 dated July 31, 1984. As a result of these decisions, attached appurtenances were excluded from the measurement of the external surface area of the upper when they served only as an ornamental feature (see HQ 082661 dated October 17, 1988). Moreover, this approach is consistent with HQ 081305 of March 10, 1988.
In further defining what constitutes the ESAU, the court, in Inter Pacific Corp. v. United States, 8 CIT 132 (1984), ruled that embroidery [ornamentation] permanently attached to a vinyl upper of a shoe is a part of the upper and also part of the ESAU. Plaintiff, relying heavily on Castelazo, had argued that the embroidery sewn on the shoe upper should be excluded in
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determining the composition of the exterior surface area of the upper since "the embroidery has no utilitarian function nor does it add to the usefulness of the shoe."
Inter Pacific clearly held that whether an attachment to an upper is ornamental or functional is not relevant. In defining ESAU, the court stated at page 139 the following:
The common meaning of the term exterior surface area is
clear. It is a sensory perception manifest as being the
outermost covering of a particular object without regard to
the functionality of the covering. TSUS has effectively
changed the classification standard so that the judicial
distinction made between the upper and an ornament attached
thereto is no longer of consequence. Rather of import now
is the manner in which something (whether ornamental or not)
is attached to the upper. If it is attached in such a way
that it covers the underlying plastic surface and a normal
viewing disclosed that it constitutes at least part of the
exterior surface area of the upper then that part
constituting the external surface area of the upper must be
deemed part of the upper and its composition must be
included in arriving at the overall area of the upper. (Italics added)
Decisions by the Customs Service and the courts interpreting nomenclature under the HTSUSA’ predecessor tariff code, the Tariff Schedules of the United States (TSUS), are not deemed dispositive under the HTSUSA. However, "... on a case by case basis prior decisions should be considered instructive in interpreting the HTS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTS" (House Conf. Report 100 576, April 20, 1988, pp. 549 550, 100th Cong., 2d Sess. (1988 U.S.C.C.A.N. 1547, 1582 1583). In this case, the nomenclature controlling this case remains unchanged and no dissimilar interpretation is required by the text of the HTSUSA. Accordingly, the tests set forth in Inter Pacific apply to the merchandise at issue.
Following Inter Pacific, the test for determining whether an appurtenance is part of an upper is whether it is visible and whether its removal would damage the shoe so as to render it unserviceable as footwear. In the instant case the laces visibly cover a portion of the wearer’s foot. In addition, removal of the laces from the shoe at issue would clearly render the sandal unwearable and therefore unserviceable as footwear. In view of the preceding discussion, we find that the laces form a portion of the ESAU.
We distinguish this from T.D. 84 59, dated April 11, 1984, in which we set forth our position as to whether tongues should be included as ESAU. It reads in pertinent part as follows:
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It has consistently been Customs position that the
exterior surface area of the upper is whatever is
visible and tactile on the surface excepting such
things as buttons, strips and other loosely attached
appurtenances. In those cases where the tongue was
held not to be part of the exterior surface area of the
upper, it was on a plane lower than a portion of the
upper and was partially or wholly covered by laces and
eyelet facings or stays.
The laces are not on a lower plane than the rest of the upper, nor are they covered by stays or other laces, which might preclude inclusion as part of the ESAU. Their functionality is not at issue.
In view of the foregoing, it is our position that style 7606 has an upper the ESAU of which is not over 90 percent rubber or plastics. Accordingly, classification in subheading 6402.99.30, HTSUSA, is correct.
HOLDING:
The protest should be DENIED. The shoes under protest, style 7606, are classifiable in subheading 6402.99.3060, HTSUSA, which provides for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Footwear with open toes or open heels...: Other: For women.” The merchandise is dutiable at the 1996 general column one rate of duty of 37.5% ad valorem.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division