CLA-2 CO:R:C:M 953261 MMC
District Director
U.S. Customs Service
511 N.W. Broadway Federal Building
Portland, OR 97209
Re: Protest No. 2904-93-100013; wicker chairs; 9903.10.42;
Customs Trade Act of 1990; Pres. Proc. 6030; U.S. Note 1 to
subchapter II of Chapter 99; U.S. Note 1 to subchapter III of
Chapter 99; Notes 1 and 2 to Chapter 99; GRI 3
Dear District Director:
The following is our decision regarding the request for
further review of Protest No. 2904-93-100013 which concerns the
qualification of wicker chairs and settees for a reduction or
suspension of duties under Chapter 99 of the Harmonized Tariff
Schedule of the United States (HTSUS). The merchandise was
entered on 5/19/92. The entries were liquidated on 10/9/92 and a
protest was timely filed on 12/29/92.
FACTS:
The articles are wicker chairs and settees imported from
Hong Kong. The merchandise was originally entered under
subheading 9902.94.01/9401.50.00, HTSUS, with duties temporarily
suspended. Subsequently, a proposed notice of action to
reclassify the articles under subheading 9903.10.42/9401.50.00,
HTSUS, was issued. On 9/9/92, protestant requested that the
notice be canceled; it was not and the articles were liquidated
at 5.6% ad valorem.
Protestant contends that the chairs and settees were
properly classified when entered. The subheadings under
consideration are:
9902.94.01 Furniture, seats, and parts thereof, of cane,
osier, bamboo or other similar materials,
including rattan (provided for in subheading
9401.50.00, 9401.90.25, 9403.80.30, or
9403.90.25) Free
9903.10.42 Seats, (other than those of 9402) of cane,
osier, bamboo or similar materials (provided
for in subheading 9401.50.00) 5.6%
Both provisions were in effect when the articles were
entered, but have since expired. Subheading 9902.94.01, HTSUS,
became a temporary provision by enactment of the Customs and
Trade Act of 1990 (P.L. 101-382), on 8/29/90 and expired on
12/31/92. Subheading 9903.10.42, HTSUS, took effect on 10/13/89,
by Presidential Proclamation 6030 dated 9/28/89.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order. GRI 1, HTSUS, states in part that for legal
purposes, classification shall be determined according to the
terms of the headings and any relative section or chapter notes.
U.S. Note 1 to subchapter II of Chapter 99 states:
[a]ny article described in the provisions of this
subchapter, if entered during the period specified in the
last column, is subject to duty at the rate set forth herein
in lieu of the rate provided therefor in chapters 1 to 98,
inclusive.
U.S. Note 1 to subchapter III of Chapter 99 states:
[t]his subchapter contains the temporary modifications of
the provisions in the tariff schedule established pursuant
to trade legislation. Unless otherwise stated, the modified
provisions are effective until suspended or terminated.
Unless the context requires otherwise, any article described
in the provisions of this subchapter, for which rates of
duty are herein provided, if entered during the period
specified, is subject to duty at the rate set forth herein
in lieu of the rated provided therefor in chapters 1 to 98.
The subchapter notes indicate that each provision only
suspends or reduces rates of duty in chapters 1 through 98 and
not another Chapter 99 provision. It is unclear from examination
of the subchapter notes whether or not the most recent chapter 99
provision can suspend another chapter 99 provision. Therefore,
the legislative history of the Customs Trade Act of 1990, any
history of Presidential Proclamation 6030, and any other
applicable HTSUS notes must be examined.
The legislative history for subheading 9902.94.01, HTSUS,
indicates that there was no domestic opposition to the provision
and no awareness of the previous presidential proclamation
addressing seats. (see Senate Report No. 101-252 p. 22; House
Conference Report p. 101-650 p.194; 136 Cong. Rec. No. 43,
4/19/90 p. s 4532-4533.) The presidential proclamation explains
that subheading 9903.10.42, HTSUS, was enacted to implement a
GATT trade agreement regarding tropical products.(see: 54 Fed.
Reg. No. 190, 10/3/89 pgs. 40839-40845). While the histories of
the provisions do not clearly indicate which is applicable, Notes
1 and 2 to Chapter 99 do indicate a possible method for
determining which subheading provides for the merchandise.
Notes 1 and 2 to Chapter 99 state:
1. The provisions of this chapter relate to legislation and
to executive and administrative actions pursuant to duly
constituted authority under which:
(a) One or more of the provisions in chapters 1 through
98 are temporarily amended or modified; or
(b) Additional duties or other import restrictions are
imposed by, or pursuant to, collateral legislation.
2. Unless the context requires otherwise, the general notes
and rules of interpretation, the section notes, and the
notes in chapters 1 through 98 apply to the provisions of
this chapter.
This note indicates that if the context does not otherwise
require, the GRI's should be applied to resolve which heading
applies to the merchandise. However, this might be an instance
where the context requires otherwise. It could require that,
under the principles of legislative interpretation, the
subheading that was last promulgated applies.
If the GRI's were applied the problem would be resolved by
GRI 3 because the chairs are prima facie classifiable in two
headings. GRI 3 states in pertinent part that when, ... goods
are, prima facie, classifiable under two or more headings,
classification shall be effected as follows:
(a) The heading which provides the most specific
description shall be preferred to headings providing a more
general description. However, when two or more headings
each refer to part only of the materials or substances
contained in mixed or composite goods ...those headings are
to be regarded as equally specific in relation to those
goods, even if one of them gives a more complete or precise
description of the goods.
It has been suggested that subheading 9903.10.42, HTSUS, is
more specific because it only applies to seats of subheading
9401.50.00, HTSUS, while subheading 9902.94.01, HTSUS, applies to
both furniture and seats in subheadings 9401.50.00, 9401.90.25,
9403.80.30, and 9403.90.25, HTSUS. However, neither of these
provisions refer to just a part of the seat. They both refer to
seats and are therefore equally specific in their description of
the article.
GRI 3 (b) states:
(b) Mixtures, composite goods consisting of different
materials or made up of different components, and goods put
up for retail sale, which cannot be classified by reference
to 3(a), shall be classified as if they consisted of the
material or component which gives them their essential
character, insofar as this criterion is applicable.
However, the essential character of the articles is their
function as a seat. It is clear that these articles are seats of
cane, osier, bamboo or other similar material.
GRI 3 (c) states:
(c) When goods cannot be classified by reference to 3(a) or
3(b), they shall be classified under the heading which
occurs last in numerical order among those which equally
merit consideration.
According to GRI 3(c), subheading 9903.10.42, HTSUS, with a
dutiable rate of 5.6%, would be the subheading that covered
wicker chairs and settees.
However, the principles of legislative interpretation would
reach the opposite result. Subheading 9902.94.01, HTSUS, was
enacted on 8/29/90 by Congress, after subheading 9903.10.42,
HTSUS, was proclaimed by the President to take effect on
10/13/89, making it the last provision created for seats of
bamboo etc.. We must presume that Congress was aware of the
Presidential Proclamation when it enacted the law which set forth
subheading 9902.94.01, HTSUS.
We believe that this legal question, whether GRI 3(c) or
principles of legislative interpretation should apply, is a
unique one. It may have been created by an oversight on the part
of the drafters. Both provisions have expired making further
administrative or court review of the legal question unlikely.
Therefore, inasmuch as the goods were entered during the period
that subheading 9902.94.01, HTSUS, was in effect, allowing for
free entry, we believe that the protestant should be given the
benefit and that the protest should be granted.
HOLDING:
The protest should be granted in full. A copy of this
decision should be attached to the Customs Form 19 and provided
to the protestant as part of the notice of action on the protest.
Sincerely,
John Durant, Director