OT:RR:CTF:FTM H310389 PJG
Center Director
Apparel, Footwear and Textiles Center
Port of Buffalo
726 Exchange Street, Suite 400
Buffalo, New York 14210
Attn: Lindsay Palmisano, Import Specialist
RE: Application for Further Review of Protest No. 4601-20-108995; Tariff classification of reusable absorbent textile towels
Dear Center Director:
This is in reference to the Application for Further Review (“AFR”) of
Protest No. 4601-20-108995, timely filed on February 11, 2020, by Crowell and Moring, LLP, on behalf of Nice-Pak International, Ltd (“Nice-Pak” or “Protestant”) and its affiliate, Professional Disposables International, Inc. (“PDI” or “Protestant”). The AFR concerns the tariff classification of reusable absorbent textile towels under the Harmonized Tariff Schedule of the United States (“HTSUS”).
Protestant has asked that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R.
§ 177.2(b)(7), the request for confidentiality is approved. The information contained within two of the attachments that Protestant forwarded to our office will not be released to the public and will be withheld from published versions of this decision.
Protestant requested, and CBP granted, a teleconference that was held with the Protestant on October 5, 2020. Subsequently, Protestant submitted a supplemental letter in support of its AFR.
FACTS:
In its protest, the Protestant describes the reusable absorbent textile towels from China as follows:
The imported merchandise that are the subject of the instant protest are durable, super-absorbent towels used to wipe and clean surfaces and absorb spilled liquids, for use in the food service industry, including restaurants, cafeterias, supermarkets, or grocery stores. Specifically, the Sani Pro Dry Foodservice Day Towels are capable of absorbing eight times their own weight and are 25 percent more absorbent than their competitors’ foodservice towels. The towels are made of sustainable fibers such as viscose or wood chips and are BPI Certified 100 percent compostable in industrial facilities. Every towel is reusable for up to eight hours during normal commercial use. The towels measures 15 inches wide and come as a compact roll packed in a box designed to easily dispense the towels. The roll is perforated every 7.5 inches to allow the user to easily tear the towels into small sheets.
The Protestant also included an additional information sheet regarding the reusable absorbent textile towels as well as a photo. The protestant has also indicated that the subject merchandise is made of 100 percent rayon staple fiber.
The decision protested is the tariff classification of reusable absorbent textile towels, which were entered on October 2, 2018, and liquidated on August 30, 2019. The reusable absorbent textile towels were entered under subheading 5603.12.0090, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Of man-made filaments: Weighing more than 25 g/m2 but not more than 70 g/m2: Other.” Subheading 5603.12.0090, HTSUSA, was also subject to an additional 10 percent ad valorem rate of duty under subheading 9903.88.03, HTSUS. U.S Customs and Border Protection (“CBP”) liquidated the entries for these products as entered.
Protestant claims that reusable absorbent textile towels should be classified under heading 6307, HTSUS, and specifically in subheading 6307.10.2030, HTSUSA, which provides for “Other made up articles, including dress patterns: Floorcloths, dishcloths, dusters and similar cleaning cloths: Other: Dish Other.”
ISSUE:
Whether the subject reusable absorbent textile towels are classified in heading 5603, HTSUS, which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated,” or in heading 6307, HTSUS, which provides for “Other made up articles, including dress patterns.”
LAW AND ANALYSIS:
Initially, we note that this matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed within 180 days of liquidation. See 19 U.S.C.
§ 1514(c)(3).
Protestant alleges that Further Review of Protest No. 4601-20-108995 should be accorded pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of CBP or his designee, or with a decision made by CBP with respect to the same or substantially similar merchandise. We find that Further Review of Protest No. 4601-20-108995 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a).
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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 may then be applied.
The 2018 HTSUS provisions under consideration are as follows:
5603 Nonwovens, whether or not impregnated, coated, covered or laminated:
6307 Other made up articles, including dress patterns:
Note 7 to Section XI, HTSUS, provides as follows:
For the purposes of this section, the expression “made up” means:
Cut otherwise than into squares or rectangles;
Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, tablecloths, scarf squares, blankets);
Cut to size and with at least one heat-sealed edge with a visibly tapered or compressed border and the other edges treated as described in any other subparagraph of this note, but excluding fabrics the cut edges of which have been prevented from unraveling by hot cutting or by other simple means;
Hemmed or with rolled edges, or with a knotted fringe at any of the edges, but excluding fabrics the cut edges of which have been prevented from unraveling by whipping or by other simple means;
Cut to size and having undergone a process of drawn thread work;
Assembled by sewing, gumming or otherwise (other than goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded); or
Knitted or crocheted to shape, whether presented as separate items or in the form of a number of items in the length.
Note 1 to Chapter 63, HTSUS, states that “Subchapter 1 applies only to made up articles, of any textile fabric.”
Note 2 to Chapter 63, HTSUS, provides as follows:
Subchapter 1 does not cover:
Goods of chapters 56 to 62; or
Worn clothing or other worn articles of heading 6309.
The Harmonized Commodity Description and Coding System Explanatory Notes
(“ENs”) constitute the “official interpretation of the Harmonized System” at the international level. See 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). 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 id.
EN 7 to Section XI states as follows:
For the purposes of this Section, the expression “made up” means:
(a) Cut otherwise than into squares or rectangles;
(b) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, table cloths, scarf squares, blankets);
(c) Cut to size and with at least one heat-sealed edge with a visibly tapered or compressed border and the other edges treated as described in any other subparagraph of this Note, but excluding fabrics the cut edges of which have been prevented from unravelling by hot cutting or by other simple means;
(d) Hemmed or with rolled edges, or with a knotted fringe at any of the edges, but excluding fabrics the cut edges of which have been prevented from unravelling by whipping or by other simple means;
(e) Cut to size and having undergone a process of drawn thread work;
(f) Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded);
Knitted or crocheted to shape, whether presented as separate items or in the
form of a number of items in the length.
General EN (II) to Section XI states, in pertinent part as follows:
* * *
Made up articles.
Under Note 7 to this Section, the expression “made up” in Chapters 56 to 63 means :
Merely cut, otherwise than into squares or rectangles, for example, dress patterns
of textile material; articles with their edges pinked (e.g., certain dusters) are also regarded as made up.
(2) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working. Goods of this kind include products knitted or crocheted directly to shape and certain dusters, towels, table cloths, scarf squares, blankets, etc., with threads along the warp left unwoven or the weft edges cut to form a fringe. Such articles may have been woven separately on the loom, but may also have been simply cut from lengths of fabric which have bands of unwoven threads (generally warp threads) at regular intervals. These lengths of fabric, from which ready made articles of the types described above may be obtained by simply cutting the dividing threads, are also considered as “made up” articles.
However, rectangular (including square) articles simply cut out from larger pieces without other working and not incorporating fringes formed by cutting dividing threads are not regarded as “produced in the finished state” within the meaning of this Note. The fact that these articles may be presented folded or put up in packings (e.g., for retail sale) does not affect their classification.
(3) Cut to size and with at least one heat-sealed edge with a visibly tapered or compressed border and the other edges treated as described in any other subparagraph of this Note, but excluding fabrics the cut edges of which have been prevented from unravelling by hot cutting or by other simple means.
(4) Hemmed or with rolled edges or with a knotted fringe (whether or not incorporating added threads) at any of the edges (e.g., handkerchiefs with rolled edges and table covers with knotted fringes), but excluding fabrics the cut edges of which have been prevented from unravelling by whipping or by other simple means.
(5) Cut to size and incorporating drawn thread work. In this connection “drawn thread work” means simply the withdrawing of certain warp or weft threads after weaving without further operation (e.g., by embroidery) on the material. The pieces of material so treated are often intended for further manufacture into lingerie.
(6) Assembled by sewing, gumming or otherwise. These articles, which are very numerous, include garments. It should be noted, however, that piece goods consisting of two or more lengths of identical material joined end to end, or composed of two or more textiles assembled in layers, are not regarded as “made up”. Nor are textile products in the piece composed of one or more layers of textile materials assembled with padding by stitching or otherwise.
(7) Knitted or crocheted to shape, whether presented as separate items or in the form of a number of items in the length.
A sample of the merchandise was provided to the CBP Laboratories and Scientific
Services Directorate (“CBP Laboratory”) for analysis. The CBP Laboratory determined that the merchandise was constructed of nonwoven fabric with thermal bonding and was composed wholly of man-made rayon fibers. The CBP Laboratory also determined that “the holes throughout the main fabric appear to be formed during the formation of the web fibers. There are additional slits (long perforations) which are a finishing step, performed after the web/fabric is formed.” The CBP Laboratory also determined that the sample weighs 66.7 g/m2, and it is not impregnated, coated, or covered.
The Protestant argues that the subject merchandise is a “made up” article pursuant to
Note 7(b) to Section XI, HTSUS, which states that “made up” articles may be “Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, tablecloths, scarf squares, blankets).” CBP has interpreted the term “produced in the finished state” to be “strictly limited to textiles that essentially come off the loom in their final forms and require only minor, if any, manipulation necessary to produce the end product.” See Headquarters Ruling Letter (“HQ”) H302469 (May 9, 2019) (citing HQ H192949 (Dec. 21, 2012); HQ 089592 (Sept. 20, 1991); and, HQ 083171 (Dec. 15, 1989)). In HQ H302469, CBP determined that the articles were not produced in the finished state because dying and cutting were necessary after removing the polyester/nylon textile material from the loom. Moreover, CBP has previously classified nonwoven wipes separated by perforation under heading 5603, HTSUS, rather than as a “made up” article under heading 6307, HTSUS. See New York Ruling Letter (“NY”) N244603 (May 28, 2014). Similarly, the subject merchandise does not meet the definition for “made up” articles found in Note 7(b) to Section XI, HTSUS, because according to the CBP Laboratory, after the nonwoven fabric is completed and removed from the loom, it undergoes an additional step of perforation. Moreover, in accordance with Note 2 to Chapter 63, HTSUS, Subchapter 1 of Chapter 63, HTSUS, does not cover goods of Chapter 56, HTSUS. Therefore, the subject merchandise, which is not a made up article and is classifiable in Chapter 56, HTSUS, cannot be classified in heading 6307, HTSUS.
Heading 5603, HTSUS, provides for “Nonwovens, whether or not impregnated, coated, covered or laminated.” The subject merchandise meets the terms of the heading because it is a nonwoven fabric. The Protestant has indicated that the subject merchandise is made of 100 percent rayon staple fiber. Accordingly, the subject merchandise is not classifiable in the six-digit subheadings that provide for nonwovens that are “[o]f man-made filaments,” specifically, subheadings 5603.11-5603.14, HTSUS. Moreover, upon reviewing a sample of the subject merchandise, the CBP Laboratory determined that it weighs 66.7 g/m2, therefore, the subject merchandise is specifically provided for under subheading 5603.92.0090, HTSUSA, which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Other: Weighing more than 25 g/m2 but not more than 70 g/m2: Other.”
In its supplemental submission, the Protestant claims that if CBP determines that the subject merchandise is classified in subheading 5603.92.0090, HTSUSA, then the secondary classification should be subheading 9903.88.48, HTSUS. Subheading 9903.88.48, HTSUS, provides for “Articles the product of China, as provided for in U.S. note 20(aaa) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative.” Protestant requests a refund of Section 301 duties pursuant to U.S. Note 20(aaa)(15) to Subchapter III of Chapter 99, HTSUS, which provides for the exclusion of certain products classified in heading 9903.88.03, HTSUS, and in particular, subheading 5603.92.0090, HTSUSA. The exclusion order is effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after September 24, 2018 and therefore, applies to the entry at issue in this AFR. See 85 Fed. Reg. 32098 (May 28, 2020).
Finally, the Protestant also claims in its supplemental submission that the merchandise is classified in subheading 9903.80.48, HTSUS. We note that subheading 9903.80.48, HTSUS, refers to “Bars, hot-rolled, not of stainless steel, provided for in subheading 7213.20.00, 7213.99.00 (except for statistical reporting numbers 7213.99.0030 and 7213.99.0090), 7214.10.00, 7214.30.00, 7214.91.00, 7214.99.00, 7215.90.10, 7227.20.00 (except for statistical reporting number 7227.20.0030), 7227.90.60 (except for statistical reporting numbers 7227.90.6020, 7227.90.6030 and 7227.90.6035), 7228.20.10, 7228.30.80 (except for statistical reporting number 7228.30.8010), 7228.40.00, 7228.60.60 or 7228.80.00,” which does not describe the subject merchandise.
HOLDING:
The reusable absorbent textile towels are classified under heading 5603, HTSUS, specifically, in subheading 5603.92.0090, HTSUSA, which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Other: Weighing more than 25 g/m2 but not more than 70 g/m2: Other.” The 2018 column one, general rate of duty is Free. Subheading 5603.92.0090, HTSUSA, is not subject to an additional 10 percent ad valorem rate of duty under subheading 9903.88.03, HTSUS, pursuant to U.S. Note 20(aaa)(15) to Subchapter III of Chapter 99, HTSUS. Duty rates are provided for convenience and are subject to change.
You are instructed to deny the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance.
In accordance with sections IV and VI of the CBP Protest/Petition Processing Handbook, you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any re-liquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP
personnel, and to the public on the CBP Home Page at http://www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division