CLA-2 R:C:M 958112

Ms. Kelly M. Callahan
Traffic Manager
New Balance Athletic Shoe, Inc.
5 S. Union St.
Lawrence, MA 01841

RE: Footwear; Formed uppers; Parts of footwear; HRL's 955606, 950946

Dear Ms. Callahan:

Your letter dated May 23, 1995, addressed to U.S. Customs, New York, New York, concerning the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS), of footwear uppers has been referred to this office for a response. Samples were submitted for examination along with laboratory reports which detail the material composition of the uppers.

FACTS:

The three samples are identified as Styles M705WN, M705CW and W705WP. The samples are mesh fabric slip-lasted uppers with closed bottoms. Over a dozen substantial (imitation leather) plastic pieces are stitched onto them, basically in the areas that will be "external" in the finished shoe. These uppers will be used after importation in the manufacture of athletic footwear.

ISSUES:

Are any of the styles considered a "formed upper" for tariff purposes?

What is the constituent material of the uppers?

LAW AND ANALYSIS:

Classification of goods under the HTSUS 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, and, provided such headings or notes do not otherwise require, according to [the remaining GRI's]." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes. Footwear is provided for in Chapter 64, HTSUS. Additional U.S. Note 4 to chapter 64, HTSUS, provides in pertinent part, as follows:

. . . Provisions for 'formed uppers' covers uppers, with closed bottoms, which have been shaped by lasting, molding or otherwise but not by simply closing at the bottom.

Heading 6406, HTSUS, provides in pertinent part, for parts of footwear (including uppers whether or not attached to soles other than outer soles). . . . Uppers and parts thereof, other than stiffeners are provided for in subheading 6406.10, HTSUS. Breakouts at the 8 and 10 digit level are determined according to component material and value. Style W705WP is clearly not a formed upper noting that it lies flat on its side in a very unshaped manner. Further, it appears there was no process performed that was not necessary to either close the bottom or attach the flexible imitation leather plastic pieces to each other and or to the mesh slip-lasted upper. With respect to styles M705WN and M705CW a significant extra step is involved: a semi-rigid inside back counter has been bent, probably by hand, into a curve and stitched at both of its ends to the large, imitation leather, outside back counter-side flash-anchor piece. This gives the back of the upper the rounded, basically semi-circular shape of a shoe, and the step was clearly not necessary for the "closing" of the bottom since style W705WP lacks it.

The counters are not quite as fully shaped as the one in the formed upper which was the subject of Headquarters Ruling Letter (HRL) 955606 dated May 27, 1994, because they have not yet been given the curve in the vertical plane that they will almost certainly get when they are, we presume, softened and bent further by a back part lasting machine. Thus, they were not partially shaped by lasting as was the upper in HRL 955606. However, uppers can be shaped "otherwise" than by lasting or molding as stated in Additional U.S. Note 4 to Chapter 64, supra. As implied in HRL 950946 dated June 22, 1992, the presence of a relatively rigid piece which requires the upper to maintain at least in part, its imported shape in the finished shoe is a critical consideration. Although M705WN and M705CW are close cases, we believe it is more correct to say that they were shaped otherwise than by a simple closing of the bottom, than the contrary.

Note 3 to chapter 64, HTSUS, reads, as follows:

3. For the purposes of this chapter, the expression "rubber or plastics" includes any textile material visibly coated (or covered) externally with one or both of those materials.

Note 4(a) to chapter 64, HTSUS, reads, as follows:

4. Subject to note 3 to this chapter:

(a) The material of the upper shall be taken to be the constituent material having the greatest external surface area, no account being taken of accessories or reinforcements such as ankle patches, edging, ornamentation, buckles, tabs, eyelet stays or similar attachments[.]

The Harmonized Commodity Description and Coding System Explanatory Notes to the HTSUS (EN), although not dispositive, or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 FR 35127, 35128 (August 23, 1989). General EN (D) to chapter 64, HTSUS, which is relevant here, reads, in pertinent part as follows:

If the upper consists of two or more materials, classification is determined by the constituent material which has the greatest external surface area, no account being taken of accessories or reinforcements such as ankle patches, protective or ornamental strips or edging, other ornamentation (e.g., tassels, pompons or braid), buckles, tabs, eyelet stays, laces or slide fasteners.

According to the independent laboratory reports furnished, the external surface area of the uppers of each style is slightly less than 80% rubber/plastics and slightly more than 20% textile. We do not agree with the laboratory analyses. It is clear to us that there was a complete mesh upper before any of the imitation leather plastic pieces were added, not just the "Triangular Plastic Eyelet Tabs" excluded from the laboratory measurement. Thus, we consider the upper exclusive of accessories and reinforcements (A-R) to be 100% textile materials (TM), not in the low twenties, as found. However, it is obvious that when all the plastic A-R's, including the Eyelet Tabs excluded from the laboratory's measurement, are included for the purposes of the U.S. break-outs, that the external surface is far less than 50% TM. See note 4(a) to Chapter 64, supra.

HOLDING:

Style W705WP is an unformed upper classifiable under subheading 6406.10.85, HTSUS, which provides for parts of footwear (including uppers whether or not attached to soles other than outer soles), uppers and parts thereof, other than stiffeners, other, other, uppers of which less than 50 percent of the external surface area (including any leather, rubber or plastics accessories or reinforcements such as mentioned in note 4(a) to this chapter) is textile materials. The applicable rate of duty for this provision is 8.6% ad valorem.

Styles M705WN and M705CW are formed uppers classifiable under subheading 6406.10.35, HTSUS, which provides for parts of footwear (including uppers whether or not attached to soles other than outer soles), uppers and parts thereof, other than stiffeners, formed uppers of textile materials, other, valued over $6.50 but not over $12/pair. The applicable rate of duty for this provision is 84.4 cents per pair plus 18.7% ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division