CLA-2 CO:R:C:T 953750 CAB

Darryl Golden
Norman Krieger, Inc.
P.O. Box 92599
Los Angeles, CA 90009

RE: Country of origin of fitted sheets and pillowcases; Section 12.130, Customs Regulations; Classification of fitted sheets and pillowcases; Heading 6303, HTSUSA

Dear Mr. Golden:

This ruling is in response to your inquiry of February 25, 1993, on behalf of Atlas Textile Co., Inc., requesting a tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) and a country of origin determination for fitted bed sheets and pillowcases. The merchandise will be entered through the Port of Los Angeles. Samples were submitted for examination.

FACTS:

The merchandise at issue consists of two pillowcases that are marked Atlas 1 and Atlas 2. There are also two fitted bed sheets labeled Atlas 3 and Atlas 4. The goods will be constructed of 100 percent cotton woven fabric, or a woven blend of 60 percent cotton and 40 percent polyester, or a woven blend of 55 percent polyester and 45 percent cotton fabric.

The fabric used for the merchandise in question is manufactured in Pakistan. The fabric is then sent to Dubai for further processing. In Dubai the fabric used to make the pillowcases is cut to size on four sides, sewn together on two sides, hemmed, and packaged for export. Fabric that is used to construct the fitted sheets is cut to width and hemmed. Elastic is then fitted and sewn along the four corners of the fabric. The fitted sheets are not cut to length as there is a selvage edge on the top and bottom of the sheets.

ISSUES:

I. What is the proper tariff classification for the for the merchandise in question?

II. What is the country of origin for the merchandise in question?

LAW AND ANALYSIS:

TARIFF CLASSIFICATION

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. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's, taken in order.

Heading 6302, HTSUSA, is the provision for bed linen, table linen, toilet linen and kitchen linen. The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN), although not legally binding, are the official interpretation of the nomenclature at the international level. The EN to Heading 6302, HTSUSA, state, in relevant part:

These articles are usually made of cotton or flax, but sometimes also of hemp, ramie or man-made fibres, etc.; they are normally of a kind suitable for laundering. They include:

(1) Bed linen, e.g., sheets, pillowcases, bolster cases, eiderdown cases and mattress covers. The merchandise at issue which is comprised of fitted sheets and pillowcases are instantly recognizable as bed linen. As bed linen is clearly provided for in Heading 6302, HTSUSA, and the corresponding EN, the subject merchandise is classifiable under Heading 6302, HTSUSA.

COUNTRY OF ORIGIN

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1), Customs Regulations, states that a new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in:

(i) Commercial designation or identity, (ii) Fundamental character or (iii) Commercial use.

Section 12.130(d)(2), Customs Regulations, states that for determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered.

(i) The physical change in the material or article

(ii) The time involved in the manufacturing or processing

(iii) The complexity of the manufacturing or processing

(iv) The level or degree of skill

(v) The value added to the article or material

When fabric is cut to length and width and hemmed in order to construct a sheet, a new and different article of commerce is created. However, in order for a substantial transformation to result within the purview of Section 12.130, there must be additional processing that is sufficiently complex so as to constitute a substantial manufacturing operation. Merely cutting fabric on two sides, hemming, and adding elastic is a simple processing operation. When making a determination as to whether fabric used to make sheets has been substantially transformed, the minimum processing required is cutting the fabric to length and width. After the fabric has been cut on four sides, Customs assesses the additional processing and determines whether the processing amounts to a substantial manufacturing operation.

In prior cases, Customs has evaluated the degree of skill, value, and amount of time expended to manufacture sheets and made substantial transformation determinations accordingly. In HRL 952909, dated April 12, 1993, Customs concluded that fabric that had been cut to length and width, coupled with the additional processing required to attach piping to flat sheets amounted to a substantial manufacturing operation. In HRL 953477, dated May 18, 1993, Customs distinguished fitted sheets that had been cut to length and width, and fitted sheets that had merely been cut on two sides. Custom applied the criteria stipulated in Section 12.130 and concluded that merely cutting fabric to length, hemming, and adding elastic to the corners did not amount to a substantial manufacturing operation. Customs evaluated the processing involved in manufacturing the fitted sheets that had been cut to both length and width and decided that the processing involved amounted to a substantial manufacturing operation. In this instance, the material used to make the fitted sheets has only been cut to width.

In light of prior Customs rulings, it is clear that the processing involved in constructing the subject fitted sheets does not amount to a substantial manufacturing operation within the purview of Section 12.130. Consequently, the fitted sheets are subject to their last substantial transformation in the country in which the fabric was manufactured, Pakistan.

In determining the country of origin for pillowcases, Customs refers to Belcrest Linens v. United States, 741 F.2d 1368, (Fed. Cir. 1984). The court held that a bolt of woven fabric that was manufactured, stenciled with embroidery, and imprinted with lines of demarcation in China prior to being sent to Hong Kong where the fabric was cut, sewn into pillowcases, and packaged was subject to its last substantial transformation in Hong Kong. Thus, when applying the court's rationale to the instant case, it appears that the fabric which will be cut and sewn into pillowcases in Dubai undergoes its last substantial transformation in that country.

HOLDING:

Based on the foregoing, the fitted sheets which will be constructed of 100 percent woven cotton fabric or a woven blend of 60 percent cotton and 40 percent polyester fabric will be classifiable under subheading 6302.21.2040, HTSUSA, which provides for cotton bed sheets. The applicable rate of duty is 7.6 percent ad valorem and the textile restraint category is 361. The fitted sheets which will be constructed of 55 percent polyester and 45 percent cotton fabric will be classifiable under subheading 6302.22.2020, HTSUSA, which provides for sheets of man-made fibers. The applicable rate of duty is 13 percent ad valorem and the textile restraint category is 666.

The pillowcases which will be constructed of 100 percent woven cotton fabric or a woven blend of 60 percent cotton and 40 percent polyester will be classifiable under subheading 6302.21.2020, HTSUSA, which provides for cotton pillowcases. The applicable rate of duty is 7.6 percent ad valorem and the textile restraint category is 360. The pillowcases which will be constructed of 55 percent polyester and 45 percent cotton fabric will be classifiable under subheading 6302.22.2010, HTSUSA, which provides for pillowcases of man-made fibers. The applicable rate of duty is 13 percent ad valorem and the textile restraint category is 666.

The country of origin of the fitted sheets which are described as Atlas 3 and 4 is Pakistan. The country of origin of the pillowcases which are described as Atlas 1 and 2 is Dubai.

The textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is updated weekly and is available at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification), and the restraint (quota/visa) categories, you should contact your local Customs office prior to importing the merchandise to determine the current applicability of any import restraint requirements. The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection, with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication is accurate and complete in every material respect. Should it subsequently be determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

John Durant, Director
Commercial Rulings Division