CLA-2 RR:CR:TE 965956 SG
Larry Ordet, Esq.
Sandler, Travis & Rosenberg, P.A.
5200 Blue Lagoon Drive
Miami, Florida 33126-2022
RE: Request for withdrawal of NY H88842; Claim of Treatment pertaining to the Classification of Swim Ways Easy Spring Lounge under 9506.29.0040, HTSUSA; Classification of Water Lounge
Dear Mr. Ordet:
This is in reply to your letter of September 23, 2002, on behalf of your client, Swim Ways Corporation (Swim Ways), requesting that we withdraw New York Ruling Letter (NY) H88842. In NY H88842, Customs classified the "Easy Spring Lounge" imported by your client, as a made up textile article classifiable in subheading 6307.90.9889, of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). You submit that the classification of this lounge and similar lounges in heading 6307 has "the effect of modifying the treatment previously accorded by the Customs Service to substantially identical transactions" and is therefore, in violation of 19 U.S.C.1625(c)(2).
You state that from January 16, 2001, through February 27, 2002, your client made eight entries of the Easy Spring Lounge (or Spring Float) through the Port of Norfolk. The goods in each instance were classified as other "water-sport equipment" in subheading 9506.29.0040, HTSUSA. Although four different style numbers are specified in the eight entries, you assert that the floats in question are identical in every way except possibly for color and/or size.
You advise that in January of 2002, your client's broker confirmed with an import specialist at Norfolk that your client was properly classifying its lounges under heading 9506. However, a binding ruling for the lounges was requested on February 26, 2002, for item number 13002. In response thereto, Customs issued NY H88842, dated February 28, 2002, concerning merchandise described as "a beach mat made of a
nylon mesh fabric " (although listed as measuring 66" x 40" you now indicate the article actually measures 72" x 40"). It was further described as having an outer border of man-made fiber fabric that contains a collapsible metal frame and inflatable tubing. The frame allows the mat to be folded into an 18" circle that can be placed into the zippered mesh-carrying bag. Customs classified the merchandise in subheading 6307.90.9889, HTSUSA, which provides for other made up textile articles, other.
It is your position that by the uniform liquidation of four entries made from January 16, 2001, through February 27, 2002, Customs established a "treatment" of classifying Swim Ways' lounges under heading 9506. If Customs seeks to change the classification of these lounges it must do so prospectively using Section 1625 procedures. You claim that the issuance of NY H88842, modified a "treatment" previously accorded by Customs to "substantially identical merchandise" imported by your client. It is your contention that the ruling is in violation of 19 U.S.C. 1625(c)(2) and is without effect; that Customs must classify the lounges in subheading 9506.29.0040, HTSUSA, unless it decides to publish the revocation for notice and comment in the Customs Bulletin under Section 1625 procedures.
1. Has Swim Ways established a treatment under 19 U.S.C. 1625?
2. What is the proper classification of the lounge?
LAW AND ANALYSIS:
On August 16, 2002, in the Federal Register (67 FR 53497), the Customs Service published as a final rule, the adoption of proposed amendments to part 177 of the Customs Regulations (19 CFR part 177) pertaining to treatment previously accorded to substantially identical transactions. These new regulations became effective on September 16, 2002. Section 177.12(c)(1) of the Customs Regulations (19 CFR 177.12(c)(1)) provides that the following rules will apply for purposes of determining whether a treatment was previously accorded by Customs to substantially identical transactions of a person:
(i) There must be evidence to establish that:
(A) There was an actual determination by a Customs officer regarding
the facts and issues involved in the claimed treatment;
(B) The Customs officer making the actual determination was responsible for the subject matter on which the determination was made; and
(C) Over a 2-year period immediately preceding the claim of treatment, Customs consistently applied the determination on a national basis as reflected in liquidations of entries or reconciliations or other Customs actions with respect to all or substantially all of that person's Customs transactions involving materially identical facts and issues.
Section 177 (c)(ii) provides that the determination of whether the requisite treatment occurred, will be made on a case-by-case basis and will involve an assessment of all relevant factors. In particular, Customs will focus on past transactions to determine whether there was an examination of the merchandise by Customs or the extent to which those transactions were reviewed by Customs. Diminished weight will be given to transactions involving small quantities or values, and no weight to informal entries or transactions processed without examination or Customs officer review.
You argue that NY H88842 has the "effect of modifying the treatment previously accorded by the Customs Service to substantially identical transactions", and is, therefore, in violation of 19 U.S.C. 1625(c)(2). We note that your request for a ruling on the "Easy Spring Lounge", did not raise a claim for treatment nor did it provide any evidence of a treatment. You now claim that your client had a treatment under 19 U.S.C. 1625, and that NY H88842 modified that treatment in violation of the requirements of 19 U.S.C. 1625. You list three reasons why you feel that your client meets the burden for establishing a treatment, by Customs, of classifying the lounges under heading 9506:
1. Your client entered comparable lounges as water sport equipment in heading 9506, eight times in a thirteen month period between January, 2001 and February 2002, at the port of Norfolk without incident. It was not until the two entries made in April, 2002, made after you received the classification ruling you requested, that the goods were required to be classified in heading 6307, HTSUS. It is your contention that these eight entries established a treatment. In support thereof you cite Precision Specialty Metals, Inc. v. United States of America, Slip Op. 01-148 (CIT, December 14, 2001), in which you feel the court made it absolutely clear that "the only proof needed to establish a treatment is a description of the transactions; the only intent referenced by the regulation
(19 CFR 177.9) is that of the importer, in arranging its affairs in reliance of the treatment."
2. In January, 2002, your client verbally confirmed with Norfolk Customs that the classification used by your client on past entries was correct.
3. Four of the eight entries made from January, 2001, through February, 2002, were uniformly liquidated under heading 9506.
Section 177.12 (c)(2) (iv) of the Customs Regulations, 19 CFR 177.12(c)(iv)), provides that "(t)he evidentiary burden as regards the existence of the previous treatment is on the person claiming the treatment." Section 177.12 (c)(iv), further states the following:
The evidence of previous treatment by Customs must include a list of all materially identical transactions by entry number (or other Customs assigned number), the quantity and value of merchandise covered by each transaction (where applicable), the ports of entry, the dates of final action by Customs, and, if known, the name and location of the Customs officer who made the determination on which the claimed treatment is based. In addition, in cases in which an entry is liquidated without any Customs review (for example, the entry is liquidated automatically as entered), the person claiming a previous treatment must be prepared to submit to Customs written or other appropriate evidence of the earlier actual determination of a Customs officer that the person relied on in preparing the entry and that is consistent with the liquidation of the entry.
The information you have provided up to this point does not substantiate that your client is entitled to a treatment. We note that the eight entries you rely on to prove your claim of "treatment" pertain to merchandise with four different style numbers. Only one entry pertains to style number 13002, identified as the "Easy Spring Lounge". Four of the eight entries pertain to style number 13011, identified as the "Spring Float-Target", two entries pertain to style number 13004, identified as the "Spring Float", and one entry pertains to style number 13009, identified as the "Spring Float LNT". You state that although different style numbers are specified in different entries, the floats in question are identical in every way except for color and/or size.
We note that Customs has no samples, invoices, or even specification sheets for merchandise covering the list of entries you provided, and no basis, other than your statement, upon which to verify that the merchandise was identical to that for which a treatment is claimed. We have not been provided with all the information required by the above section.
In addition, you have not alleged or provided any evidence that any of the entries mentioned were examined by Customs, or that Customs import specialists received
samples of the merchandise or entry documents prior to release of that merchandise. It appears that your client's entries were either paperless or defaulted in by-pass, i.e., the entries were not reviewed by Customs. With regard to the four entries which were liquidated, we note that they were liquidated as entered, and there is no evidence of an earlier determination by Customs. We have no records of any Customs examinations of your client's shipments for the purpose of verifying classification, nor have you provided any. You have not met the evidentiary burden required to substantiate the existence of a previous treatment.
The eight entries upon which your claim of treatment is based were made over a
13 month period from January 16, 2001, through February 27, 2002. You admit that since April 2002, your client's loungers have been classified in subheading 6307.90.9889, HTSUSA, and not accorded the treatment in question. Section 177.12 (c)(iii), states, in relevant part, the following:
(iii) Customs will not find that a treatment was accorded to a person's transactions if:
(A) The person's own transactions were not accorded the treatment in question over the 2-year period immediately preceding the claim of treatment.
Accordingly, under the facts and circumstances of this particular case, it is Customs opinion that a previous treatment has not been shown to have existed. Therefore, issuing NY H88842, classifying the lounge under heading 6307, was not in violation of 19 U.S.C. 1625(c)(2).
Classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined in accordance with the terms of the headings and relevant section or chapter notes.
You submit that the Swim Ways lounges are classifiable as "water sport equipment" in heading 9506. You contend that the lounges are recreational water devices- leisure devices designed for use in the water, and cite NY D95049, dated December 14, 1998, as precedent. You also state that similar "pool floats" were classified in heading 9506 in NY D83793, dated October 28, 1998.
Heading 9506, HTSUS provides for, among other articles, articles and equipment for gymnastics, athletics and other sports or outdoor games. The Explanatory Notes, the official interpretation of the HTSUS at the international level, state at EN 95.06(B) that heading 9506 covers requisites for other sports and outdoor games, e.g.:
(2) Water-skis, surf-boards, sailboards and other water-sport equipment, such as diving stages (platforms), chutes, divers' flippers and respiratory masks of a kind
used without oxygen or compressed air bottles, and simple underwater breathing tubes (generally known as "snorkels") for swimmers or divers.
Although the ENs contain a long list of articles that are classifiable in heading 9506, the "Easy Spring Lounge" is not specifically included, nor does it appear to be
similar to the listed articles. Those articles appear to be the requisites or gear needed in connection with the play of sports and athletics, that is, the equipment essential to the play of the game, sport or athletic activity or the equipment designed for use by the player in the training, practice, and conduct of those sporting activities. The lounge is not a requisite piece of sports equipment within the scope of heading 9506. Specifically, it does not qualify for inclusion within the scope of the suggested subheading as other water-sport equipment. Subheading, 9506.29.00, is intended to cover such water sport articles as water skies, surf boards and body boards, swim masks and flippers, underwater breathing tubes, swim training devices, and various sport recreational water devices. The packaging of the subject lounge shows it being used to lie on or in the water (specifically pools, lakes and beaches) or for sunning on the beach. There is no claim on the packaging or in your submission that it will be used in the performance or achievement of athletic water activities similar to that described above or as a water sport training or practice device. Consequently, the "Easy Spring Lounge" is not classifiable in heading 9506. We note that in NY D85049, cited by you, Customs determined that a kickboard of soft foam was a learning and training aid for beginning swimmers ages four to eight, as such it was classified in subheading 9506.29.0040, HTSUSA, as other water sport recreational equipment. In NY D83793, dated October 28, 1998, Customs classified a product identified as a pool float. It is described as a PVC foam board measuring thirteen inches in length and six inches in width. We note that from its description it appears to be similar to the kickboard classified in NY D85049. It was classified in subheading 9506.29.0040, HTSUSA, as other water sport recreational equipment. In both of the cases cited by you, neither samples' size, construction, nor use is similar to that of the "Easy Spring Lounge".
Heading 6306 provides for "Tarpaulins, awnings and sun blinds; tents; sails for boats, sailboards or landcraft; camping goods". Indented under this heading is subheading 6306.41.0000, which provides for pneumatic mattresses made of cotton; and 6306.49.0000, which provides for pneumatic mattresses made of other textile materials.
The ENs provide guidance as to the types of pneumatic mattresses included in heading 6306. EN 5 to heading 63.06 states: "(5) Camping goods. This group includes canvas buckets, water bags, wash basins; ground-sheets; pneumatic mattresses, pillows and cushions (other than those of heading 40.16); hammocks (other than those of heading 56.08)."
Based on the ENs it appears that the subheading covers the types of mattresses one would bring along on a camping trip for sleeping or sitting. The instant lounger is not of this type; it is designed as a float to be used in ponds and lakes. Thus, the lounger, even if described as a mattress, does not fall within heading 6306.
The ENs to heading 6307 state that this heading includes made up articles of any textile materials [including pneumatic cushions not considered camping goods] which are not included more specifically in other headings of Section IX or elsewhere in the Nomenclature. We have consistently held that pool floats similar to the lounge imported by your client are classifiable within heading 6307. See, HQ 083457, dated November 24, 1989, and NY 812445, dated July 18, 1995. The lounge is not included more specifically in other HTSUS headings and is, therefore, properly classifiable within Heading 6307.
The subject "Easy Spring Lounge", style 13002, is properly classified under subheading 6307.90.9889, HTSUSA, which provides for "Other made up articles, including dress patterns: Other: Other: Other, Other: Other." The lounge is dutiable at the general column one rate of 7 percent ad valorem.
NY H88842 is affirmed. The claim of treatment under 19 U.S.C. 1625 is denied.
Myles B. Harmon, Director
Commercial Rulings Division