CLA-2 CO:R:C:G 087998 WAW

Ms. Judy Kearney
Network Brokers International, Inc.
Airport Industrial Office Park, Building A2-C
145th Avenue & Hook Creek Blvd.
Valley Stream, N.Y. 11581

RE: Reconsideration and Revocation of Headquarters Ruling Letter (HRL) 086692; Decorative fabric rose leaf; artificial flowers and foliage of man-made fibers

Dear Ms. Kearney:

This letter is to inform you that we are revoking HRL 086692, dated April 18, 1990, which was issued to you. Since the issuance of this ruling, Congress has passed the "Customs and Trade Act of 1990," Pub. L. No. 101-382. Several tariff provisions of the Harmonized Tariff Schedule of the United States (HTSUSA) were amended by this Trade Act. Specifically, one of the amendments included in the Trade Act concerns the classification of imports of artificial foliage under the HTS. Upon review and reconsideration of the recent enactment of this Act, we have determined that it is necessary to revoke HRL 086692 to reflect the changes made in the tariff.

FACTS:

The instant merchandise is described as a decorative fabric rose leaf made of 100 percent polyester taffeta material. The decorative leaf is designed to be used with decorative bows to create a simulated flower arrangement. The artificial leaves will be manufactured in and imported from Korea. A sample of the article was submitted along with your original ruling request.

ISSUE:

Whether the provision for "artificial flowers, of man-made fibers," in subheading 6702.90.4000, HTSUSA, includes artificial foliage without blooms or flower buds, or whether such foliage is more properly classifiable as "other" in subheading 6702.90.6000, HTSUSA.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) set forth the manner in which merchandise is to be classified under the HTSUSA. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff and any relative section or chapter notes and, unless otherwise required, according to the remaining GRI's, taken in order. GRI 6 states that for legal purposes, classification is determined according to the terms of the subheadings and related subheading notes and, mutatis mutandis, to the GRI's, on the understanding that only subheadings at the same level are comparable.

Prior to enactment of the Customs and Trade Act, the relevant provisions of the HTSUSA which cover artificial flowers and foliage were the following:

6702 Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit:

6702.10 Of plastics Assembled by binding with flexible materials such as wire, paper, textile materials, or foil, or by gluing or by similar methods

* * *

6702.90 Of other materials: 6702.90.1000 Of feathers

Other: 6702.90.4000 Artificial flowers, of man-made fibers

6702.90.6000 Other

The issue that we are asked to address in this reconsideration is, in view of the amendment to subheading 6702.90.40, HTSUSA, made in the Customs and Trade Act of 1990, whether the provision for "artificial flowers, of man-made fibers," in subheading 6702.90.4000, HTSUSA, now includes artificial foliage without blooms or flower buds, or whether such foliage remains classified as "other" in subheading 6702.90.6000, HTSUSA,

In HRL 086692, dated April 18, 1990, a decorative fabric rose leaf consisting of 100 percent polyester taffeta was classified under subheading 6702.90.6000, HTSUSA, which provides for artificial flowers, foliage and fruit and parts thereof, of other materials, other, with a duty rate of 17 percent ad valorem. At the time we issued this ruling it was our position that artificial foliage was properly classified under subheading 6702.90.6000, HTSUSA, based on the reasons set forth below.

In applying the HTSUSA, the Customs Service is obligated to follow the terms of the statute. The superior heading 6702, HTSUSA, is divided into two separate sections; the first section covers "artificial flowers, foliage and fruits and parts thereof" and the second section covers "articles made of artificial flowers, foliage, or fruit." Subheading 6702.90.4000, HTSUSA, is limited to artificial flowers, foliage and fruit and parts thereof. . . of other materials, other: artificial flowers, of man-made fibers. The competing subheading at this level is 6702.90.6000, HTSUSA, which provides for artificial flowers, foliage and fruit and parts thereof. . . of other materials (than plastic), other (than feathers), other (than artificial flowers, of man-made fibers). Had no distinction between artificial flowers and the other articles enumerated in heading 6702 been intended, we can assign no reason why "artificial flowers" alone is mentioned in subheading 6704.90.4000, HTSUSA. The fact that the artificial foliage was specifically included in the superior heading and not in the subheading means that it was the intent of the drafters of the nomenclature to exclude artificial foliage from the "artificial flowers, of man-made fibers" subheading. Accordingly, in HRL 086692 we determined that artificial foliage of man-made fibers should be classified in subheading 6702.90.6000, HTSUSA, dutiable at 17 percent ad valorem.

Since the issuance of this ruling letter, however, Congress passed the "Customs and Trade Act of 1990." This Act was signed into law by the President on August 20, 1990 and took effect on October 1, 1990. Included in the Trade Act was an amendment to subheading 6702.90.4000 of the HTS. Prior to enactment of this legislation, in an effort to ensure uniform treatment for all importers of artificial flowers and foliage, the various customs ports were instructed to withhold liquidation on all entries with regard to artificial flowers and foliage until a final determination is made by this office.

Under the Tariff Schedules of the United States (TSUSA), Customs had a practice of classifying foliage-type artificial flowers, including foliage without buds or blooms, in chief value of man-made fibers, under the same TSUSA heading, as imports of artificial flowers, subject to the same nine percent ad valorem duty rate. In the course of converting the TSUSA to the HTS, efforts were made to avoid tariff rate changes to the extent practicable and to simplify the tariff where possible without rate changes significant for United States trade. Because of an inadvertent change in the conversion of the HTS, however, Customs was classifying imports of artificial foliage under an HTS subheading which was subject to a duty rate of 17 percent ad valorem. To restore the tariff treatment of foliage-type artificial flowers of man-made fibers to the previous duty treatment under the TSUSA, this subheading was amended by Congress in Section 479C of the Customs and Trade Act of 1990.

Section 479C of the Customs and Trade Act of 1990, states the following:

Subheading 6702.90.40 is amended by striking out "Artificial flowers, of" in the article description and inserting in lieu thereof "Of".

In view of the above amendment to subheading 6702.90.40, HTSUSA, the tariff schedule now reads as follows:

* * * Other: 6702.90.40 Of man-made fibers

6702.90.60 Other

* * *

Subheading 6702.90.40, HTSUSA, as amended, now includes artificial flowers, foliage and fruit and parts thereof of man- made fibers. Artificial flowers, foliage, and fruit and parts thereof which consist of other than plastics, other than feathers and other than man-made fibers are now classified in the basket provision of Heading 6702 under subheading 6702.90.6000, HTSUSA.

Furthermore, according to Section 485 of the Customs and Trade Act of 1990, this amendment is to apply with respect to articles entered, or withdrawn from warehouse for consumption on or after October 1, 1990. Until October 1, 1990, artificial foliage of man-made fibers continued to be classified pursuant to HRL 086692 in subheading 6702.90.60, HTSUSA. On October 1, 1990 and thereafter, both flowers and foliage, of man-made fibers, are to be classifiable in subheading 6702.90.40, HTSUSA, based on the above amemdment to the tariff schedule. Accordingly, until October 1, 1990, entries of artificial foliage continued to be classified, in conformity with HRL 086692, under subheading 6702.90.60, HTSUSA, and duties deposited, with liquidation suspended.

The Customs and Trade Act also provides for the retroactive liquidation and reliquidation of entries of artificial foliage. Section 485 of the Act states the following:

(1) Notwithstanding section 514 of the Tariff Act of 1930 or any other provision of law, upon proper request filed with the appropriate customs officer after September 30, 1990, and before April 1, 1990, any entry--

(A) which was made after the applicable date and before October 1, 1990, and

(B) with respect to which there would have been no duty, or a lesser duty, if any amendment made by section . . .479C. . . . applied to such entry,

shall be liquidated or reliquidated as though such amendment applied to such entry.

The term "upon request filed with the appropriate Customs officer" means that a written request must be submitted to the District, Area or Port Director at the location where the entry was filed. The request should state that the liquidation or reliquidation is being requested under the provisions of the Customs and Trade Act of 1990. The entry number(s) of the entry or entries for which liquidation or reliquidation is being requested must be identified so that Customs may retrieve the proper documents. A request for liquidation or reliquidation may list more than one entry number provided that the issue on each entry is identical. It is not necessary that a separate request be filed for each entry. Requests may be submitted after September 30, 1990 and before April 1, 1991.

HOLDING:

Pursuant to Section 177.9(d) of the Customs Regulations (19 CFR 177.9(d)), Headquarters Ruling Letter 086692, which classified a decorative fabric rose leaf under subheading 6702.90.6000, HTSUSA, is hereby revoked. Based on Section 479C of the Customs and Trade Act of 1990, the subject merchandise should be classified under subheading 6702.90.4000, HTSUSA. Articles classified under this provision are subject to a duty rate of 9 percent ad valorem.

The effective date of this tariff change with respect to articles entered or withdrawn from warehouse for consumption is October 1, 1990. A copy of this ruling letter should be attached to the entry documents filed at the time this type of merchandise is imported.

Sincerely,

John Durant, Director
Commercial Rulings Division