CLA-2 RR:CR:TE 961939 SS
Port Director
U.S. Customs Service
200 East Bay Street
Charleston, SC 29401
RE: Decision on Application for Further Review of Protest No.
1601-97-100108; subheading 5201.00.2200 paired with 9903.52.01;
subheading 5201.00.1200 paired with 9903.52.01; 19 C.F.R.
151.83; 19 C.F.R. 151.84; 19 C.F.R. 151.85; cotton, not carded
or combed, Gossypium Hirsutum; sampling of raw cotton in bales in
accordance with commercial practice
Dear Sir:
This is a response to the Application for Further Review of
Protest No. 1601-97-100108, dated May 1, 1997, filed by Alexander
International ("Protestant") on behalf of Weil Brothers Cotton,
Inc., protesting the liquidation of 440 bales of cotton. The
protest was originally sent to headquarters on September 4, 1997,
but was never received. After reconstructing the protest, the
port again forwarded the protest to headquarters on May 8, 1998.
The protest was received May 12, 1998.
FACTS:
The merchandise in question consists of 440 bales of raw
cotton of a variety known as Gossypium Hirsutum, commonly
referred to as "upland cotton". On June 10, 1996, Weil Brothers
Cotton, Inc. ("Importer") filed an entry for 670 bales of cotton
which were classified under subheading 5201.00.1200, HTSUSA (for
cotton having a staple length under 28.575 mm(1-1/8 inches)),
paired with 9903.52.01, HTSUSA. Although the entry covered two
invoices, only Invoice number 96.246, which covered the 440 bales
under protest, is relevant for the purposes of this review. The
remaining bales covered by the second invoice were liquidated as
filed.
According to the packing lists, Invoice number 96.246
covered two lots. Lot 101076 contained 211 bales and Lot 102134
contained 229 bales. Samples were taken from 21 bales in Lot
101076 and from 22 bales in Lot 102134. Customs laboratory test
results showed that all 43 samples had staple lengths over
28.575mm. The average staple length for Lot 101076 was 29.642mm.
The average staple length for Lot 102134 was 29.591mm. On March
6, 1997,
Customs issued a Notice of Rate Advance Action (CF29) notifying
the Importer that Invoice
96.246 on the entry would be liquidated under subheading
5201.00.2200, HTSUSA, for cotton having a staple length of 28.575
mm (1-1/8 inches) or more but under 34.925 mm (1-3/8 inches). It
appears that the Notice of Action and laboratory reports were
sent to the Protestant on March 27, 1997. A copy of that
envelope submitted by Protestant reveals a stamp which states
"DELAYED DUE TO INCORRECT ZIP CODE, PLEASE NOTIFY YOUR
CORRESPONDENTS". The Port indicates that the Notice of Action
and laboratory reports were returned to the Port because of an
incorrect zip code for the Importer listed on the entry. The
Protestant, however, only indicates that it did not receive the
laboratory reports until it contacted Customs and asked that they
be provided. In any event, it appears that notification was
delayed due to the fact that the Importer showed the wrong zip
code on its entry address. Furthermore, it does not appear that
the Importer filed a request for redetermination of staple length
once it finally did receive the laboratory reports. The entry was
liquidated on April 11, 1997.
The Protestant timely filed this protest seeking
reliquidation of the entry and a refund of duties and interest
paid. The Protestant contends that sampling was improper in that
ten percent (10%) was not sampled. Protestant also contends that
the staple length determination was not promptly mailed in
accordance with 19 C.F.R. 151.84. Protestant further contends
that the delay in notification denied the importer the ability to
ask for redetermination pursuant to 19 C.F.R. 151.85.
ISSUES:
I. Whether the methods used in the sampling of the cotton
bales were proper?
II. Was the Protestant denied the ability to file a request
for redetermination?
LAW AND ANALYSIS:
I. The methods used in the sampling of the cotton bales
were proper.
The Customs Regulations governing the testing and sampling
of cotton are set forth in 19 C.F.R. 151 Subpart F. The Customs
Regulations do not provide specific guidelines for the method of
sampling of cotton to determine the staple length, but merely
require sampling to be "in accordance with commercial practice".
19 C.F.R. 151.83. In interpreting "commercial practice",
Customs has previously relied on American Society of Testing
Materials (ASTM) Standard D-1441. See Headquarters Ruling Letter
(HQ) 084543, dated February 12 1991; HQ 959489, dated October 1,
1996; and HQ 960362, dated August 22, 1997. In May 1996, Customs
Laboratories and Scientific Services division issued instructions
to Customs officers for sampling raw cotton in bales based on the
ASTM Standard D-1441. The instructions state in part:
"1. Take at random 10 bales or 10 percent of the bales in
the lot, whichever is GREATER. Two subsamples will be
taken from each bale, to be taken from opposite sides."
A close reading of the cited regulations, however, reveals that
they contain no language requiring Customs to specify how many
bales should be sampled. See HQ 0845434. Section 151.83 only
imposes a requirement that when sampling is done, it must be in
accord with commercial practice.
Protestant contends that ten percent (10%) was not sampled.
Protestant argues that the invoice was for a total of 440 bales
and, thus, 44 bales should have been sampled. Although only a
total of 43 bales were sampled, lots, not the total number of
bales shown on the invoice, are the relevant units for sampling
purposes. Each lot must be sampled separately. The number of
bales sampled must be ten percent (10%) of each lot. As stated
above, the 440 bales under protest involved two lots. Lot 101076
had 211 bales and ten percent (10%) is 21.1. 21 bales were
sampled. Lot 102134 had 229 bales and ten percent (10%) is
22.9. 22 bales were sampled. Obviously, the inspector
considered 22 bales as ten percent (10%) of the lot.
Protestant further contends that ten percent (10%) was not
sampled by alleging that only 42 bales were sampled. Two
laboratory reports exist for bale number 182 (in Lot 102134) and
Protestant claims that the bale was sampled twice. However, it
is very obvious when a bale has been sampled. The instructions
and the ASTM standard indicate that 8 ounces are removed from
each bale leaving two large cavities approximately 12 inches by 6
inches by 4 inches deep on two opposite sides of each bale
sampled. The fact that a bale has been sampled is obvious and it
is unlikely that an inspector would mistakenly take two samples
from the same bale. Accordingly, although there are two
laboratory reports for bale number 182, it is probable that the
wrong bale number is shown on one of the reports.
In HQ 084543, dated February 12, 1991, Customs dealt with a
similar case where the importer classified 19 entries of cotton
under the Tariff Schedules of the United States (TSUS) heading
providing for a staple length under 1-1/8 inches and Customs
liquidated the entry under the heading providing for a staple
length of 1-1/8 inches or more, but under 1-1/16 inches. Of a
total of 1,970 bales covered by the protested entries, 137 bales
were sampled. Only three samples measured less that 1-1/8
inches. Customs stated that if classification of cotton is made
solely based on the results of the stapling of samples, Customs
must follow commercial practice by sampling 10 bales, of each
entry, or 10 percent of those bales, whichever is greater, and
that sampling must result in a large predominance of the bales
falling within that classification. However, despite the fact
that no samples were even taken from four of the entries, all the
entries were classified under the heading for staple length of 1-1/8 inches or more. It appears that Customs looked cumulatively
at the evidence and found that the overwhelming nature of the
test results warranted the classification of all nineteen entries
under the heading for cotton having a staple length of 1-1/8
inches or more. Applying this rational to the present case, even
if it were found that exactly ten percent was not sampled, based
on the overwhelming evidence that none of the sampled cotton
measured under 28.575 mm, the sampling of one or two additional
bales would not have changed the final result.
In HQ 959489, dated October 1, 1996, the importer claimed
classification of 59 bales of cotton under the heading for cotton
having a staple length under 28.757 mm. After the cotton was
sampled and tested, Customs issued a Notice of Rate Advance
Action and liquidated the merchandise under the heading for
cotton having a staple length of 28.575 mm. or more but under
34.925 mm. Section 10.1 of the ASTM Standard Practice D 1441,
provides that a proper sample is gathered by taking two four
ounce subsamples from each of two opposite sides of each bale
sampled. Customs deviated from commercial practice in the manner
in which it gathered the cotton samples from each individual
bale; Customs only took six ounce samples. In that case it was
clearly established that Customs had not adhered to commercial
practice and the protest was granted. No similar deviation from
commercial practice has been established in the present case.
Accordingly, Customs reclassification of the merchandise was
proper.
In Headquarters Ruling Letter (HQ) 955711, dated July 21,
1994, the issue presented was whether Customs should rely on its
laboratory determination that the imported jackets were not
"water resistant". The importer alleged that the Customs
laboratory reports should not be considered because only two
samples were tested instead of the three required. Customs held
that the burden of proof was on the importer to establish that
the Customs laboratory report was invalid and that the importer
had not sustained that burden. The only showing of error on the
part of Customs laboratory was that it tested two samples instead
of three as required by AATCC Test Method 35-1985. Customs noted
that the outcome of the two test results made a third test
unnecessary. A third test would have had no effect since it
could not have resulted in the three tests averaging the required
amount of water penetration. We stated that if the failure of
the Customs laboratory to conduct a third test as required by
AATCC Test Method 35-1985 was considered an error, it was
obviously a harmless one. Applying this rationale to the present
case, a twenty third test would have had no effect since it could
not have resulted in the laboratory results for Lot 102134
averaging a staple length under 28.575 mm. None of the samples
in Lot 102134 were under 28.575 mm. The staple length of the
twenty third sample would have to be approximately 6 mm. in order
to reduce the average to under 28.575 mm. Even if we were to
assume that one bale was erroneously sampled twice and two
additional tests were needed, the staple lengths of the
additional samples would have to be exceedingly short in order to
reduce the average to under 28.575 mm. Accordingly, if the
failure of Customs to sample a twenty third bale is considered an
error, it is obviously a harmless one.
There is no evidence or indication that the sampling
methodology used by the Port did not comply with the acceptable
industry standard. Furthermore, the referenced sampling method
has a firm basis in Customs practice. In the absence of such
evidence, it is our opinion that the staple length of the cotton
was accurately determined. Accordingly, the proper classification
for this merchandise remains in subheading 5201.00.2200 HTSUSA.
II. The Protestant was not denied the ability to file a request
for redetermination.
The entry at issue involved at least 670 bales of cotton.
At least 65 bales were sampled from the entry. Bales of cotton
from the second invoice, which were liquidated as entered, were
also sampled. The samples were forwarded to the Customs
laboratory shortly after entry on June 10, 1996. The laboratory
results for samples taken from the first invoice are dated July
31, 1996, and August 1, 1996. A review of the file does not
reveal when the results were actually received by the port.
However, the port advises that the review was completed by the
import specialist as expeditiously as possible. A Notice of
Action notifying the importer of the rate advance was prepared on
March 6, 1997. The Notice of Action and laboratory report were
sent to the importer on March 27, 1997.
Section 151.84 of the Customs Regulations (19 C.F.R.
151.84) provides that the port director shall have one or more
samples of each sampled bale of cotton stapled by a qualified
Customs officer, or a qualified employee of the Department of
Agriculture and shall promptly mail the importer a notice of the
results determined. Protestant alleges that the seven month
lapse of time between the date of the test results and Notice of
Action is not acceptable as being done promptly. In Headquarters
Ruling Letter (HQ) 960665, dated April 10, 1998, a lapse of five
months between the laboratory results and notice of action was
held to satisfy the requirements of 19 U.S.C. 151.84. Although
it is not clear when the laboratory results were received by the
port, it will be assumed for the purposes of this ruling that the
laboratory reports were reviewed and processed by the field
import specialist as expeditiously as possible. Accordingly, we
find that this satisfied the requirements of 19 U.S.C. 151.84.
Protestant further contends that the requirements of Section
151.84 were not met in that it did not receive copies of the
laboratory report until it contacted Customs and asked that they
be mailed. On March 27, 1997, Customs mailed a copy of the
Notice of Action and laboratory results to the Importer at the
address listed on the entry documents. However, a copy of the
envelope shows a stamp which states "DELAYED DUE TO INCORRECT ZIP
CODE, PLEASE NOTIFY YOUR CORRESPONDENTS". The port indicates
that the envelope was returned to Customs due to the incorrect
zip code. However, Protestant submitted a copy of the envelope
with its protest and, thus, may have received it. Regardless,
any delay in notification after March 27, 1997, to a great
extent, was caused by the Importer's failure to note the correct
zip code on the entry documents.
Protestant further alleges that it was denied the ability to
request redetermination due to the time lag between importation,
entry, lab sampling and notice of action. Section 151.85 of the
Customs Regulations (19 C.F.R. 151.85) reads in its entirety:
If the importer is dissatisfied with the port
director's determination, he may file with the port
director, within 14 calendar days after the mailing of
the notice, a written request in duplicate for a
redetermination of the staple length. Each such
request shall include a statement of the claimed staple
length for the cotton in question and a clear statement
of the basis for the claim. The request shall be
granted if it appears to the port director to be made
in good faith. In making the redetermination of staple
length, the port director may obtain an opinion of a
board of cotton examiners from the U.S. Department of
Agriculture, if he deems such action advisable. All
expenses occasioned by any redetermination of staple
length, exclusive of the compensation of Customs
officers, shall be reimbursed to the Government by the
importer.
In HQ 960665, the protestant claimed it was denied the
ability to request redetermination because the bales of cotton
had been consumed and the sample material destroyed by both the
USDA and the importer. The claim was found to be without merit
because the protestant did not actually file a request for
redetermination. Customs held that the regulation requires the
importer to file a request for redetermination within 14 days of
receiving notice of the port director's determination. Since the
burden to seek a redetermination was on the protestant and the
protestant failed to seek redetermination and state a claim
within the time period prescribed by the regulation, it could not
avail itself of the regulation to support the protest. In the
present case, Protestant admits that the Importer did receive
notice of the port director's determination. A review of the
record indicates that Importer failed to seek redetermination.
Accordingly, the Protestant was not denied the ability to file a
request for redetermination.
Even if the Importer had requested redetermination, it
probably would not have been granted. The regulation indicates
that port director may grant a request for reconsideration if it
appears to be made in good faith. Based on the fact that none of
samples resulted in lengths under 28.575, any request for
redetermination would not have been viewed as being made in good
faith and would have been denied by the port director. Customs
has held that the decision to grant or deny the request is left
to the discretion of the port director. See HQ 960665.
Accordingly, there was no need for a redetermination of the
testing for staple length and the proper classification for this
merchandise was under subheading 5201.00.2200, HTSUSA.
HOLDING:
The method of sampling of cotton to determine staple length
must be in accordance with standard commercial practice. In the
instant protest, the cotton was tested in accordance with that
standard. Furthermore, we find that Customs notified the
Protestant of the test results on the imported cotton in
accordance with 19 C.F.R. 151.84 and Protestant failed to file a
request for reconsideration under 19 C.F.R. 151.85. The subject
merchandise, was correctly classified in subheading 5201.00.2200,
HTSUSA, which provides for cotton, not carded or combed, having a
staple length of 28.757 mm (1-1/8 inches) or more but under
34.925 mm (1-3/8 inches): described in General Note 15 of the
tariff schedule and entered pursuant to its provisions, paired
with heading 9903.52.01, HTSUS. The applicable rate of duty is
4.4 cents per kilogram.
Even assuming arguendo that the proper number of cotton
bales were not sampled or that notice should have been sent
sooner, the Protestant has failed to establish any showing of
prejudice.
The protest should be DENIED. 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 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