CLA-2 CO:R:C:T 950499 PR
Area Director of Customs
John F. Kennedy International Airport
Building 178
Jamaica, New York 11430
RE: Request for Further Review of Protest 1001-1-001714,
Dated March 1, 1991, Concerning the Classification
of Certain Embroidered Emblems
Dear Sir:
This ruling is on the protest filed against your decision in
the liquidation on December 14, 1990, of an entry of certain
embroidered emblems. Our decision on the matter follows.
FACTS:
The imported merchandise, Champion emblems, are elongated
horseshoe-shaped red, white, and blue, letter C's with most of
the inner portions filled in. Each one consists of three layers
of man-made fiber fabric, one woven and two nonwoven, which have
been completely covered on both surfaces with colored stitching
forming the decorative trademark symbol.
ISSUE:
Two interrelated issues are presented. The first issue is
whether the imported emblems are considered to be embroidered for
tariff purposes. In making that determination, the second issue
must be considered--whether the emblems, if embroidery, are
classifiable under the provision for embroidery without visible
ground, in subheading 5810.10.0000, Harmonized Tariff Schedule of
the United States Annotated (HTSUSA), or under the provision for
other embroidered man-made fiber badges, emblems, and motifs, in
subheading 5810.92.0040, HTSUSA.
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LAW AND ANALYSIS:
Under the Tariff Schedules of the United States Annotated
(TSUSA), the predecessor to the HTSUSA, it was Customs position
that the subject merchandise was not considered to be
embroidered. This is because embroidery, under the TSUSA, was
stitching which, except for burnt-out lace, decorated a base
fabric. If the base fabric was completely obscured or the
stitching actually created the article, as opposed to decorating
it, then that stitching was not embroidery. Numerous judicial
decisions and dictionary definitions supported that position
(e.g., see United States v. Field & Co., 10 Ct. Cust. Appls. 183,
T.D. 38550 (1920), and ORR Ruling 75-163, Headquarters Ruling
Letter (HRL) 040281, dated September 2, 1975).
However, the HTSUSA is an international based tariff and
terms which had specific meanings under the TSUSA may, in the
international context, have different meanings. The Harmonized
Commodity Description and Coding System, Explanatory Notes, which
are the official interpretation of the HTSUSA at the
international level (for the 4 digit headings and the 6 digit
subheadings), state:
Embroidery is obtained by working with embroidering
threads on a pre-existing ground of * * * woven fabric
* * * in order to produce an ornamental effect on that
ground. * * * The ground fabric usually forms part of
the completed embroidery, but in certain cases it is
removed (e.g., chemically or by cutting) after being
embroidered and only the design remains. (at pg. 808)
This language may be interpreted as implying that the TSUSA
rule was being carried over to the HTSUSA. However, the
Explanatory Notes go on to state:
The embroidery classified here comprises mainly the
following three groups.
(I) EMBROIDERY WITHOUT VISIBLE GROUND
This is embroidery in which the ground fabric has
been eliminated (e.g., by chemical process, by cutting
out). Thus the material consists entirely of the
embroidered designs * * * [I]t has no background * * *
(II) EMBROIDERY WITH THE GROUND RETAINED AFTER EMBROIDERING
This is embroidery in which the embroidering thread
does not usually cover the whole of the ground fabric.
* * *
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(III) APPLIQUE
This consists of a ground of textile fabric or felt
on which are sewn, by embroidery or ordinary stitches:
* * *
(B) Ornamental motifs * * *
* * *
All varieties of embroidery described remain within
this heading when in the following forms:
* * *
(2) In the form of motifs, i.e., individual
pieces of embroidered design serving no other function
than to be incorporated or appliqued as elements of
embroidery in, for example, underwear or articles of
apparel or furnishings. They include badges, emblems,
"flashes", initials, numbers, stars, national or
sporting insignia, etc.
The Explanatory Notes make it quite clear that merchandise
such as the subject emblems were intended to be classified as
part of the "Applique Work" group of embroidery.
There is no ambiguity in the description of merchandise
intended to be classified as "Embroidery without visible ground".
It is "embroidery in which the ground fabric has been
eliminated." In addition, it is apparent from the description
for "Embroidery with the ground retained after embroidering" that
the subject emblems were not intended to be included in that
grouping.
The description for "Applique Work" embroidery explicitly
describes the instant goods--"badges, emblems," and other similar
articles and states that the design may be made by embroidery or
ordinary stitches.
It is equally evident that the TSUSA concept of embroidery
was not intended to be carried forward into the HTSUSA. If
"Embroidery Without Visible Ground" only includes embroidery
where the ground has been removed, and "Embroidery With The
Ground Retained" describes embroidery where the "embroidering
thread does not usually cover the whole of the ground fabric",
then the only thing left for "Applique Work" embroidery to
include (in regard to ornamental motifs) must, by default, be
where the ground fabric has been retained but is no longer
visible (unlike embroidery under the TSUSA). Based on the plain
wording of the Explanatory Notes, no other reasonable conclusion
exists. While a former tariff may be used to interpret a current
tariff in order to resolve ambiguities, it may not be used to
create them. Richard Nelson Co. v. United States, 71 Cust. Ct.
34, C.D. 4467 (1973).
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The position has been advanced that the statutory subheading
5810.10.0000, which provides for "Embroidery without visible
ground" is clear and unambiguous and the creation of an ambiguity
in an otherwise clear and unambiguous statute is improper.
United States v. Corning Glass Works, 66 CCPA 25, C.A.D. 1216
(1978). It follows that since subheading 5810.10.0000 describes
the merchandise, we should not resort to extraneous aids, such as
the Explanatory Notes, to determine the intended coverage of that
provision.
We are of the opinion that the wording of the subheading in
question is susceptible of varying interpretations and that
clarification of the language is, therefore, warranted. Does
that wording of that subheading require that the ground fabric
must not be visible on the face side of the emblem but may be
visible on the back side? Or, must the ground fabric be obscured
on both sides? What if the ground fabric is visible on the
sides, as is the case with the instant merchandise? May we cut
the emblem and look for the ground fabric in cross section? How
much of the ground fabric must be visible? In Customs view, the
words "without visible ground", in the context used, are not
clear and unambiguous. Accordingly, it is reasonable to resort
to extraneous aids, in this instance, the Explanatory Notes, to
determine the intended coverage of those words.
There are numerous judicial decisions which hold that the
intention of the legislature is controlling in determining the
interpretation and application of a statute. However, the HTSUS
is somewhat unique. The international portion (the 4 digit
headings and the 6 digit subheadings) were drafted by an
international agency, the Customs Cooperation Council (CCC),
consisting of representatives of over 90 nations. The HTSUS was
presented to Congress for enactment as a package--to be enacted
or rejected in its entirety. Unlike prior tariffs, there were no
legislative hearings concerning the individual headings or
subheadings contained therein. As a result, legislative history
for the HTSUS is virtually nonexistent.
The Conference Report On H.R. 3, The Omnibus Trade And
Competitiveness Act of 1988, states:
The Explanatory Notes constitute the Customs
Cooperation Council's official interpretation of the
Harmonized System. They provide a commentary on the
scope of each heading of the Harmonized System and are
thus useful in ascertaining the classification of
merchandise under the system.
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The Explanatory Notes were drafted subsequent to the
preparation of the Harmonized System nomenclature
itself, and will be modified from time to time by the
CCC's Harmonized System Committee. Although generally
indicative of proper interpretation of the various
provisions of the Convention, the Explanatory Notes,
like other similar publications of the Council, are not
legally binding on contracting parties to the
Convention. Thus, while they should be consulted for
guidance, the Explanatory Notes should not be treated
as dispositive.
Congressional Record, April 20, 1988, at page 2021.
To effectuate the above, and in an effort to promote
international uniformity in the classification of merchandise, by
memorandum of July 11, 1988, file 082185, this office advised our
Area Director, New York Seaport, that we will adhere to the
Explanatory Notes unless they are self contradictory, or where we
believe that a strict application of them may be contrary to a
legal note and/or enlarge the coverage of a HTSUSA heading or
subheading. As a method of insuring adherence to this position
and as a way of achieving uniformity in the classification of
merchandise, the memorandum went on to state that the Explanatory
Notes should be followed in the absence of specific advice from
this office to the contrary. This office has issued no such
advice concerning the Explanatory Notes for Heading 5810.
HOLDING:
Pursuant to the clear language of the Explanatory Notes, the
subject emblems are properly classifiable under the provision for
other man-made fiber embroidered badges, emblems, and motifs, in
subheading 5810.92.0040, HTSUSA. Accordingly, the protest should
be granted in full. A copy of this decision should be attached
to the Customs Form 19 and mailed to the protestant as part of
the notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division