CLA-2 RR:CTF:TCM W968290 BtB
Port Director
U.S. Customs and Border Protection
1901 Crossbeam Drive Charlotte, NC 28217
RE: Application for Further Review of Protest No. 1512-06-100039; Classification of certain upholstery fabric with acrylic coating
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest 1512-06-100039 that you forwarded to the Office of Regulations and Rulings pursuant to 19 C.F.R. §174.26 on June 27, 2006. We have completed our review of this protest and are returning the protest and appropriate documents forwarded for review to you along with directions for disposition of the protest, which are set forth below.
FACTS:
Protest Number 1512-06-100039 was timely filed by counsel on behalf of Global Textile Alliance, Inc. (“GTA” or “protestant”), on June 1, 2006. The decision protested is the classification, rate and amount of duties chargeable on twenty-two entries of certain fabric made through the Port of Charlotte, North Carolina from March through June 2005.
At our request, protestant furnished us with a sample of this certain fabric and represented that it was identical to the fabric that was imported in the entries at issue. This fabric is a 100% polyester woven fabric that is brown in color and is used in the manufacturing of upholstery. One side of the fabric appears to have been brushed or sanded, while the other side has a whitish, blotchy acrylic coating that looks as if it has been sprayed on.
On the entries at issue, GTA classified this fabric in subheading 5515.12.0040, HTSUSA, which provides for: “Other woven fabrics of synthetic staple fibers: Of polyester staple fibers: Mixed mainly or solely with man-made filaments, Satin weave or twill weave.” At the time of the entries, merchandise classified in subheading 5515.12.0040, HTSUSA, was subject to a column-one (general) rate of duty of 12% ad valorem and fell into textile category 628.
Prior to their liquidation, GTA filed Supplemental Information Letters (“SILs”) on the entries at issue, requesting that the classification of the fabric be changed to subheading 5903.90.2500, HTSUSA, which provides for: “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: Other: Of man-made fibers: Other: Other.” At the time of the entries, merchandise classified in subheading 5903.90.2500, HTSUSA, was subject to a column-one (general) rate of 7.5% ad valorem and fell into textile category 229. CBP at the Port of Charlotte reviewed the SILs, disagreed with the action requested, and consequently notated “DISAGREE” on the adjustment coversheet of each letter. The entries at issue liquidated on respective dates in the period from January 13, 2006, through April 21, 2006, with the fabric classified in subheading 5515.12.0040, HTSUSA.
Further review of Protest Number 1512-06-100039 was properly accorded to GTA pursuant to 19 C.F.R. §174.24 because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise. GTA also complied with the requirements of 19 C.F.R. §174.25.
In an attachment to the legal argument (set forth in Section II, Block 7 of Protest Number 1512-06-100039), protestant states that the fabric at issue is identified as “Sensations with Milky Coating,” a fabric previously classified by CBP in New York Ruling Letter (“NY”) L82493, issued February 15, 2005. In that ruling, CBP classified “Sensations with Milky Coating” in subheading 5903.90.2500, HTSUSA.
Protestant explains why the fabric at issue was not classified pursuant to the ruling letter at the time of entry:
As a result of miscommunication between the importer and its broker, however, entries of “Sensations with Milky Coating” … were mistakenly entered under HTSUS subheading 5515.12.00, dutiable at the rate of 12.0% ad valorem.
In its argument, protestant also points out that the commercial invoices for each of the entries at issue describe the fabric as “100% PES [polyester] Woven Fabric With Milky Coating” and indicate its classification as “Tariff: 5903.90.2500.” Our review of the commercial invoices shows that the fabric at issue is also described as “Woven Fabric #8862” and on one commercial invoice, classification numbers have been crossed out and changed, with pen, to show “Tariff: 5903.90.2500.”
ISSUE: What is the classification of the fabric at issue?
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides, in part, that classification decisions are to be "determined according to the terms of the headings and any relative section or chapter notes." If 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 GRI may then be applied, in order.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN”) constitute the official interpretation of the Harmonized System at the international level (for the 4-digit headings and the 6-digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. While neither legally binding nor dispositive of classification issues, the EN provide commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
A product's classification is determined by first looking to the headings and section or chapter notes. See Orlando Food Corp. v. United States, 140 F.3d 1437 (Fed. Cir. 1998). The headings under consideration for classification of the fabric at issue are: heading 5515, HTSUSA, which provides for: “Other woven fabrics of synthetic staple fibers” and heading 5903, HTSUSA, which provides for: “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902.”
A fabric is considered a fabric of heading 5903, HTSUSA, if its impregnation, coating or covering of plastics is visible to the naked eye as required by Note 2(a)(1) to Chapter 59, HTSUSA, with no account taken of any resulting change in color. It is CBP’s longstanding view that the wording of Note 2(a)(1), “visible to the naked eye,” is a clear expression by the drafters of the Harmonized System that a significant, if not substantial, amount of material must be added to a fabric for it to be considered impregnated, coated or covered. The plastics material added to the fabric must be visibly distinguishable from that fabric without the use of magnification. CBP believes this criterion is satisfied when the application of plastics material visibly affects the surface character of the fabric. In such an instance, the naked eye is seeing the plastics. See, e.g., Headquarters Ruling Letter (“HQ”) 967884, dated October 26, 2005, on the classification of certain pants; HQ 082219, dated November 21, 1988, on the classification of three fabrics; HQ 085245, dated August 31, 1989, on the classification of a men's nylon coat made of certain coated fabrics; and HQ 087941, dated December 12, 1990, on the classification of certain fusible interlining fabrics from Japan.
We have examined the sample of the fabric provided by protestant (that it represented is identical to the fabric that was imported in the entries at issue) and found one side of the fabric to be visibly coated with acrylic. Applying the “visible to the naked eye” test on the submitted sample, using normally corrected vision in a well-lighted room, the fabric’s acrylic coating was visibly distinguishable from that fabric without the use of magnification. The coating visibly affects the surface character of the fabric, obscuring the underlying weave. As a result, we find that the fabric has a plastic coating that is visible to the naked eye and, accordingly, is classifiable in heading 5903, HTSUSA. Because the fabric is coated, it is not provided for by heading 5515, HTSUSA.
Because protestant has asserted that they are both the same, we have compared the sample submitted by protestant in this matter against the sample of fabric that we have on file of “Sensations with Milky Coating” from NY L82493. Our review showed that the two samples are not identical. The samples differ in color and coating. The sample submitted by protestant in this matter is brown. The sample that was the subject of NY L82493 is a light beige color. The coating of the sample from NY L82493 also appears to be heavier than the coating on the fabric submitted by protestant in the instant matter.
19 C.F.R. §177.9(b)(2), regarding the effect of tariff classification rulings, states as follows:
Each ruling letter setting forth the proper classification of an article under the provisions of the Harmonized Tariff Schedule of the United States will be applied only with respect to transactions involving articles identical to the sample submitted with the ruling request or to articles whose description is identical to the description set forth in the ruling letter.
Because the sample submitted by counsel in this matter differs from the sample of fabric that was the subject of NY L82493, the ruling letter (NY L82493) is not to be applied to the fabric at issue in this matter. Please advise GTA not to continue to submit or attach NY L82493 to future entries of the fabric at issue.
We understand that GTA may be importing fabrics with names that are substantially similar (e.g., “#8862” and “#8862 with Milky Coating”). Please also advise GTA that, to prevent confusion going forward, it is recommended that articles be described as fully and completely as possible in ruling requests (by exact name, style number or both) and that these descriptions match descriptions on commercial invoices presented to CBP.
HOLDING:
The fabric at issue is classified in subheading 5903.90.2500, HTSUSA, which provides for: “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: Other: Of man-made fibers: Other: Other.” The applicable column one (general) rate of duty on the dates of the entries at issue, was 7.5% ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUSA and the accompanying duty rates are provided on the world wide web at www.usitc.gov.
Since reclassification of the merchandise as indicated above will result in a lower rate of duty as claimed, you are instructed to allow the protest in full. In accordance with Section IV of the Customs Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 reliquidation of the entries in accordance with the decision must be accomplished prior to mailing of the decision.
No later than 60 days from the date of this letter, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and by other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division
Enclosures