CLA-2 OT:RR:CTF:TCM H249993 HvB
Port Director
U.S. Customs and Border Protection
200 East Bay St
Charleston, SC 29401-2611
Attn.: Import Specialist Gregory Riley, or Senior Import Specialist Drucilla Clark-Addison
RE: Application for Further Review of Protest No. 1601-13-100180; tariff classification of water shoes constructed with rubber or plastic outer soles that are embedded with polyester textile material
Dear Port Director:
This is reference to the Application for Further Review (AFR) of Protest No. 1601-13-100180, timely filed on June 12, 2013, on behalf of Strand Import & Distributors, Inc. (Strand). The Protest/AFR concerns U.S. Customs and Border Protection’s (CBP) tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of footwear constructed with rubber or plastic outer soles that is embedded with a textile knit fabric, or in the case of certain styles, partially embedded with textile knit fabric.
We are returning the samples to you.
FACTS:
The merchandise at issue consists of footwear that is identified as “beach shoes” or “aqua shoes.” Strand states that the shoes are designed for use in the water, the beach, or poolside. On its entry documentation, Strand indicates that the subject footwear are not waterproof. Each style is a slip-on type shoe with a closed toe and closed heel that does not cover the ankle.
Eighteen styles are at issue in this protest. The men’s styles are identified as style nos. SH766M, SH1759M, and SH1110M. The women’s styles are identified as style nos. SH17589L, SH765HL and SH1111L. The children/infant styles are identified as style nos. SH756C, SH1786C, SH17681, SH012, and SH013.
The subject footwear have uppers that are constructed from polyester textile material and outer soles that are made from rubber or plastic. A representative sampling of seven styles were sent to CBP’s Laboratory and Scientific Services (LSS) for analysis to determine the component breakdown of the merchandise’s outer sole and upper. For each of the samples tested, LSS determined that the outer sole is composed of plastics and is embedded or partially embedded with a textile knit fabric. See, e.g., LSS Report # 20130722 (April 2, 2013) for Women’s style #SH1758L. Strand identifies the textile knit fabric as polyester. For each sample tested, LSS determined that “the textile material added to the outer sole did not possess the necessary durability and strength as required by note 5 to Chapter 64 of the HTSUS.” LSS also found that each style of shoe had a foxing like band that covers the perimeter of the shoe. See, e.g. LSS Report # SV20130742, dated April 2, 2013 for Child’s Style #SH013. LSS found that the embedded textile has the greatest area in contact with the ground. Ibid. With regard to the constituent materials of the outer soles, in its AFR memorandum dated May 25, 2013, Strand states that while the aqua shoes do not possess the strength and durability of a normal shoe, the shoes are durable enough for the intended use, i.e., to be worn at the beach or around the pool.
Strand entered the subject footwear on January 3 and April 9, 2012 as “zori’s” under subheading 6402.20.0000, HTSUS. Upon receipt of CBP LSS’s laboratory analysis of the footwear samples, the Port issued Notices of Action, in which it rate advanced both the subject footwear under subheading 6404.19.59, HTSUS, which provides for: “Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Other: Valued over $3/a pair: Other: Other.” The Port liquidated the merchandise on January 19, 2013. Subsequently, Strand filed a timely Protest/AFR.
Per its AFR memorandum dated May 25, 2013, Strand agrees with CBP that the merchandise is not classifiable as “zori’s”, stating that the merchandise was erroneously entered as “zori’s”, because it did not understand the scope of subheading 6402.20.0000, HTSUS. Strand now asserts in its Protest/AFR that the subject footwear is classified in subheading 6405.20.90, HTSUS, which provides for: “Other footwear: With uppers of textile materials: Other.” In the alternative, Strand submits that the subject footwear is classified in subheading 6404.19.57, HTSUS, which provides for “Footwear with outer soles of rubber or plastics…and uppers of textile materials: Footwear with outer soles of rubber or plastic: Other: Other: Valued not over $3/pair: Other: With uppers of textile materials and having outer soles with textile materials having the greatest surface area in contact with the ground, but not taken into account under the terms of additional U.S. note 5 to Chapter 64.”
ISSUE:
Whether the instant water shoes are classified under subheading 6404.19.57, HTSUS, as “Footwear with outer soles of rubber or plastics…and uppers of textile materials: Footwear with outer soles of rubber or plastic: Other: Other: Valued not over $3/pair: Other: With uppers of textile materials and having outer soles with textile materials having the greatest surface area in contact with the ground, but not taken into account under the terms of additional U.S. note 5 to Chapter 64,” or under subheading 6405.20.90, HTSUS, as “Other footwear: With uppers of textile materials: Other.”
LAW AND ANALYSIS:
As an initial matter, CBP notes that the matter protested is protestable under 19 U.S.C. § 1514(a)(2) as a decision on tariff classification. The Protest/AFR was timely filed, within 180 days of liquidation. Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 1601-13-100180 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a), because the decision against which the protest was filed is alleged to be inconsistent with a ruling by the Commissioner of Customs or his designee or with a decision made at any port with respect to the same or substantially similar merchandise. Specifically, Strand cites to New York Ruling Letter (NY) I84526, dated July 31, 2002, in which CBP classified “aqua-socks” in heading 6405.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provision of law for all purposes. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order.
The 2012 HTSUS provisions under consideration are the following:
6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials:
Footwear with outer soles of rubber or plastics:
6404.19 Other:
Other:
Valued not over $3/pair:
6404.19.57 With uppers of textile material other than vegetable fibers and having outer soles with textile materials having the greatest surface area in contact with the ground, but not taken into account under the terms of additional U.S. note 5 to this chapter
6404.19.59 Other
6405 Other footwear:
6405.20 Having uppers of textile material
6405.20.90 Other
* * * * *
Note 4(b) to Chapter 64, HTSUS, states, in relevant part:
4. Subject to note 3 to this chapter:
[…]
(b) The constituent material of the outer sole shall be taken to be the material having the greatest surface area in contact with the ground, no account being taken of accessories or reinforcements such as spikes, bars, nails, protectors or similar attachments.
* * * * *
Additional U.S. Note 5 to Chapter 64, HTSUS, states, in relevant part:
5. For the purposes of determining the constituent materials of the outer sole pursuant to note 4(b) of this chapter, no account shall be taken of textile materials which do not possess the characteristics usually required for normal use of an outer sole, including durability and strength.
* * * * *
As an initial matter, we note that the decision, NY I84526, to which Protestant cites in support of its assertion that the subject footwear is classifiable in heading 6405, HTSUS, has been superseded by Additional U.S. Note 5 to Chapter 64 (Note 5). On November 3, 2011, the President of the United States enacted certain modifications to the HTSUS, including the insertion of Note 5. Proclamation 8742 was published in the Federal Register (76 FR 68271) on November 3, 2011. CBP explained in a Final Notice:
Accordingly, Note 5 provides the authoritative legal standard to be used in determining the classification of footwear with textile material on the outer soles. Previous rulings on this issue have been superseded by Note 5.
We agree with Protestant that the outer sole of the subject footwear lack the requisite strength and durability of a normal shoe. LSS analysis confirmed that the textile material embedded in the plastic or rubber outer sole does not meet the characteristics usually required for normal use of an outer sole, including durability and strength. Thus, it follows that the polyester material that is embedded in the plastic outer sole does not meet Note 5. Hence, the footwear is prima facie classifiable in subheading 6404.19, as “Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastic.”
Subheading 6404.19.57, HTSUS, provides for “Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Other: Other: Valued not over $3/pair: Other: With uppers of textile materials and having outer soles with textile materials having the greatest surface area in contact with the ground, but not taken into account under the terms of additional U.S. note 5 to Chapter 64.” The terms of this subheading describe the subject merchandise in its entirety, from the material of its soles and uppers, to the textile material that does not meet the terms of Additional U.S. Note 5 to Chapter 64, HTSUS, to the cost of the merchandise. As a result, the subject merchandise is classified in subheading 6404.19.57, HTSUS, and cannot be classified as “other” in subheading 6404.19.59.
HOLDING:
By application of GRI 1, the subject aqua shoes, styles no. SH766M, SH1759M, SH1110M, SH17589L, SH765HL, SH1111L, SH756C, SH1786C, SH17681, SH012, and SH013 are classified in subheading 6404.19.57, HTSUS, which provides for “Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Other: Other: Valued not over $3/pair: Other: With uppers of textile materials and having outer soles with textile materials having the greatest surface area in contact with the ground, but not taken into account under the terms of additional U.S. note 5 to Chapter 64.” The 2012 column one, general rate of duty is 12.5% ad valorem.
You are instructed to DENY the protest with respect to classification under subheading 6405.20.90. You are instructed to GRANT the protest with respect to subheading 6404.19.57. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any re-liquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at http://www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division