CLA-2 OT:RR:CTF:FTM H282781 PJG
Dipak Mavar
FTZ Administrator
PRB Inc. dba SKAPS Industries
335 Athena Drive
Athens, Georgia 30601
RE: Tariff classification of nonwoven geotextile fabrics manufactured in a Foreign Trade Zone from privileged foreign status polypropylene staple fiber and tariff classification of rolls or bales of trimmings/cuttings of fabric resulting from the production of the nonwoven geotextile fabrics
Dear Mr. Mavar:
This ruling is in response to your letter dated December 20, 2016, filed by you on behalf of PRB Inc. dba SKAPS Industries (“SKAPS”), requesting a binding ruling on the tariff classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of nonwoven geotextile fabrics manufactured in a Foreign Trade Zone (“FTZ”) from privileged foreign status polypropylene staple fiber and the tariff classification of rolls or bales of trimmings/cuttings of fabric resulting from the production of the nonwoven geotextile fabrics. In Headquarters Ruling Letter (“HQ”) H282598, the Entry Process and Duty Refunds Branch addressed your request for a ruling concerning your proposed accounting method to track domestic and privileged foreign status fiber used to manufacture fabric in a FTZ, and how to determine the value of waste or scrap recovered from the manufacturing process. You submitted three 8 inches by 8 inches sample swatches of the nonwoven geotextile fabric with product numbers GT 135, GT 140, and GT 160.
FACTS:
You indicate that the SKAPS’ facility in Athens, Georgia, which is a FTZ, manufactures nonwoven geotextile fabrics from privileged foreign and domestic polypropylene staple fiber. You explain the production process as follows:
In order to create the finished non-woven geotextile fabric, raw polypropylene staple fiber is fed through a series of machines that card, cross lap, stretch, needle punch, draft, tenter, and heat the fiber to create the finished fabric . . . . The finished fabric is created solely from polypropylene staple fiber and no additional inputs are included in the production process. Polypropylene staple fiber bales may be sourced from both domestic and foreign sources. Foreign-sourced polypropylene staple fiber is admitted to the FTZ in [privileged foreign] status.
The SKAPS website provides informational sheets concerning the three styles of fabrics at issue in this ruling. With respect to each, it states, in relevant part:
… a needle-punched nonwoven geotextile made of 100% virgin polypropylene staple fibers, which are formed into a random network for dimensional stability. … resists ultraviolet deterioration, rotting, biological degradation, naturally encountered alkalis and acids. Polypropylene is stable within the pH range of 2 to 13.
You state that the nonwoven geotextile fabrics are used as “drainage products for environmental and civil use.” Your website lists the following applications for SKAPS nonwoven geotextiles: separation and stabilization; subsurface drainage; erosion control; asphalt overlay paving; interlayer bond breaker fabrics; and silt fence.
You also state that the trimmings/cuttings of nonwoven geotextile fabric are generated in three ways:
As part of the production process, the ends of the fabric are trimmed for uniformity and the trimmings spooled for recycling.
Depending on customer demand, a finished roll of fabric may be further cut down to a specific size, and the trimmings collected for recycling.
Partially finished processed material is removed from the machines at the end of each production run and any leftover trimmings/cuttings as the result of the trimming process described in #1 above are gathered from the production floor and bundled together for recycling.
You indicate that the trimmings/cuttings are then “rolled or baled and set aside for sale to a recycler.” You further state that “SKAPS may also elect to include defective finished fabric from a production run together with its waste trimmings for sale to a recycler if it does not meet quality standards and cannot be sold as a finished product.”
ISSUES:
What is the tariff classification of the nonwoven geotextile fabrics manufactured in a FTZ from privileged foreign status polypropylene staple fiber?
What is the tariff classification of rolls or bales of trimmings/cuttings of fabric resulting from the production of the nonwoven geotextile fabrics manufactured in a FTZ from privileged foreign status polypropylene staple fiber?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The 2017 HTSUS provisions under consideration are as follows:
5503 Synthetic staple fibers, not carded, combed or otherwise processed for spinning:
5505 Waste (including noils, yarn waste and garneted stock) of man-made fibers:
5602 Felt, whether or not impregnated, coated, covered or laminated:
5603 Nonwovens, whether or not impregnated, coated, covered or laminated:
5911 Textile products and articles, for technical uses, specified in note 7 to this chapter:
6310 Used or new rags, scrap twine, cordage, rope and cables, and worn out articles of twine, cordage, rope or cables, of textile materials:
Note 7 to Chapter 59, states as follows:
Heading 5911 applies to the following goods, which do not fall in any other heading of section XI:
(a) Textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other than those having the character of the products of headings 5908 to 5910), the following only:
(i) Textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber, leather or other material, of a kind used for card clothing, and similar fabrics of a kind used for other technical purposes, including narrow fabrics made of velvet impregnated with rubber, for covering weaving spindles (weaving beams);
(ii) Bolting cloth;
(iii) Straining cloth of a kind used in oil presses or the like, of textile material or of human hair;
(iv) Flat woven textile fabrics with multiple warp or weft, whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes;
(v) Textile fabric reinforced with metal, of a kind used for technical purposes;
(vi) Cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing or lubricating materials;
(b) Textile articles (other than those of headings 5908 to 5910) of a kind used for technical purposes (for example, textile fabrics and felts, endless or fitted with linking devices, of a kind used in papermaking or similar machines (for example, for pulp or asbestos-cement), gaskets, washers, polishing discs and other machinery parts).
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to 56.02 states, in pertinent part:
Needled webs of staple fibres in which the needling is complementary to other types of bonding and needled filament based webs are regarded as nonwovens (heading 56.03).
The EN to 56.03 states, in pertinent part:
A nonwoven is a sheet or web of predominantly textile fibres oriented directionally or randomly and bonded. These fibres may be of natural or man made origin. They may be staple fibres (natural or man made) or man made filaments or be formed in situ.
Nonwovens can be produced in various ways and production can be conveniently divided into the three stages : web formation, bonding and finishing.
* * *
II. Bonding
Afterweb formation the fibres are assembled throughout the thickness and width of the web (continuous method) or in spots or patches (intermittent method).
This bonding can be divided into three types :
(a) Chemical bonding, in which the fibres are assembled by means of a bonding substance. This may be done by impregnation with an adhesive binder such as rubber, gum, starch, glue or plastics, in solution or emulsion, by heat treatment with plastics in powder form, by solvents, etc. Binding fibres can also be used for chemical bonding.
(b) Thermal bonding, in which the fibres are assembled by submitting them to a heat (or ultrasonic) treatment, passing the web through ovens or between heated rollers (area bonding) or through heated embossing calenders (point bonding). Binding fibres can also be used for thermal bonding.
(c) Mechanical bonding, in which webs are strengthened by the physical entanglement of the constituent fibres. This may be achieved by means of high pressure air or water jets. It may also be achieved by needling but not by stitch bonding. However, needled products regarded as nonwovens are restricted to :
filament based webs;
staple fibre webs where the needling is complementary to other types of bonding.
These various bonding processes may also frequently be combined.
* * *
Except where they are covered more specifically by other headings in the Nomenclature, the heading covers nonwovens in the piece, cut to length or simply cut to rectangular (including square) shape from larger pieces without other working, whether or not presented folded or put up in packings (e.g., for retail sale). These include : facing webs (overlay) for incorporation in laminated plastics; top sheets for the manufacture of disposable baby napkins (diapers) or sanitary towels; fabrics for the manufacture of protective clothing or garment linings; sheets for filtering liquids or air, for use as stuffing materials, for sound insulation, for filtration or separation in road building or other civil engineering works; substrates for manufacturing bituminous roofing fabrics; primary or secondary backing for tufted carpets, etc.; handkerchiefs, bed linen, table linen, etc.
The heading also excludes :
* * *
(c) Needleloom felts (heading 56.02).
* * *
(ij) Nonwovens for technical uses, of heading 59.11.
The EN to 63.10 states, in pertinent part:
This heading covers the following textile products :
Rags of textile fabrics (including knitted or crocheted fabrics, felt or nonwovens). Rags may consist of articles of furnishing or clothing or of other old textile articles so worn out, soiled or torn as to be beyond cleaning or repair, or of small new cuttings (e.g., dressmakers’ or tailors’ snippings).
(2) Scrap pieces of twine, cordage, rope or cables, used or unused (e.g., scrap pieces resulting from the manufacture of twine, cordage, rope or cables, or of articles thereof), and old twine, cordage, rope and cables and worn out articles of such materials.
To fall in the heading, these products must be worn, dirty or torn, or in small pieces. They are generally fit only for the recovery (e.g., by pulling) of the fibres (which are usually re spun), for the manufacture of paper or plastics, for the manufacture of polishing materials (e.g., polishing wheels), or for use as industrial wipers (e.g., machine wipers).
All other textile waste and scrap, however, is excluded from this heading. This exclusion applies particularly to tangled yarn obtained during the process of manufacturing knitted and crocheted fabrics, or by unravelling worn out knitted or crocheted articles; any other waste or scrap textile yarns or fibres (including those obtained from the padding of old mattresses, cushions, bedspreads, etc.); garnetted stock. These products are classified in Chapters 50 to 55 in the relevant headings relating to “waste” or “garnetted stock”.
The heading also excludes fabrics showing faults in weaving, dyeing, etc., but which do not fulfil the conditions mentioned above. These fabrics are classified in the headings appropriate to new fabrics.
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° °
Subheading Explanatory Note.
Subheading 6310.10
Products of heading 63.10 are considered “sorted” when graded according to specific criteria or when resulting from the use of a particular textile product (e.g., goods of the same nature or the same textile material, twine of uniform textile composition, new snippings all of the same colour).
In your ruling request, you suggested classification of the nonwoven geotextile fabrics (styles GT 135, GT 140, and GT 160) in heading 5603, HTSUS. You also suggest classifying the rolls or bales of trimmings/cuttings of fabric under this heading. We will address each product in turn.
The photograph that you submitted to us shows that the subject nonwoven geotextile fabrics are placed on large rolls. Based on the description of the manufacturing process for the subject fabrics as well as an examination of the samples that you provided, we agree that the fabrics are of a nonwoven nature, consistent with the definition provided in EN 56.03, and are therefore classifiable in heading 5603, HTSUS. However, we note that EN 56.03 states that the heading excludes needleloom felts (heading 56.02) and nonwovens for technical uses (heading 59.11). Therefore, we must first consider whether the subject nonwoven geotextile fabrics are classifiable in headings 5602 and 5911, HTSUS.
Based on the production process that you described in your submission, the subject nonwoven geotextile fabrics cannot be classified in heading 5602, HTSUS. EN 56.02 indicates that “[n]eedled webs of staple fibres in which the needling is complementary to other types of bonding and needled filament based webs are regarded as nonwovens (heading 56.03).” The Fairchild Dictionary of Textiles defines the term “web” as follows:
Fibers of cotton, wool, or manufactured staple as they are doffed from the card cylinder and before they are condensed or processed further.
Sheet-like array of fibers formed on garnett, air laying machine, or wet laying machine.
Cloth on the loom in the process of weaving.
Nonwoven fabric, especially if lighter weight
* * *
Fairchild Dictionary of Textiles 625 (7th ed. 1996).
Since the production of the subject nonwoven geotextile fabrics involves needling as well as heating, the merchandise is excluded from classification in heading 5602, HTSUS, because the needling is complementary to the heating process.
Heading 5911, HTSUS, provides for “Textile products and articles, for technical uses, specified in note 7 to this chapter.” The uses for the subject fabrics, as identified in the ruling request and listed on the SKAPS website, are not provided for in the list of technical uses found in Note 7 to Chapter 59, HTSUS. We conclude that the subject nonwoven geotextile fabrics are not classifiable in headings 5602 or 5911, HTSUS, and therefore are classifiable in heading 5603, HTSUS.
In your description of the merchandise, you state that the fabric consists wholly of staple fibers. Based on this description, the subject nonwoven geotextile fabrics are not classifiable in subheadings 5603.11.00, 5603.12.00, or 5603.13.00, because those subheadings provide for nonwovens of man-made filaments. Instead, the subject nonwoven geotextile fabrics are classifiable in subheadings 5603.91.00-5603.94, HTSUS, which provide for “Nonwovens, whether or not impregnated, coated, covered or laminated: Other” depending on the weights in grams per square meter of each of the fabrics. Please note that in accordance with EN 63.10, “fabrics showing faults in weaving, dyeing, etc., but which do not fulfil the conditions mentioned” in EN 63.10 “are classified in the headings appropriate to new fabrics.” Therefore, SKAPS’ “defective finished fabric[s]” would also be classifiable in subheadings 5603.91-5603.94, HTSUS, depending on the weights in grams per square meter of each of the fabrics.
You also requested the tariff classification of the rolls or bales of trimmings/cuttings of fabric produced as a result of the production of the nonwoven geotextile fabric. Heading 6310, HTSUS, provides for “Used or new rags, scrap twine, cordage, rope and cables, and worn out articles of twine, cordage, rope or cables, of textile materials.” EN 63.10 explains that the heading covers rags of textile fabrics, which “may consist … of small new cuttings (e.g., dressmakers’ or tailors’ snippings).” EN 63.10 further states that the products of heading 6310, HTSUS, “are generally fit only for the recovery (e.g., by pulling) of the fibres (which are usually re-spun), for the manufacture of paper or plastics, for the manufacture of polishing materials (e.g., polishing wheels), or for use as industrial wipers (e.g., machine wipers).” You indicate three instances wherein SKAPS produces trimmings/cuttings of fabric as a result of the production of the nonwoven geotextile fabric. Each of the described instances involves the creation of waste by trimming/cutting the fabric and, in each instance, the fabric is sold to be recycled. This description is consistent with EN 63.10 because these trimmings/cuttings are “small new cuttings” and they are recycled. Therefore, we find that the trimmings/cuttings of fabric produced as a result of the production of the nonwoven geotextile fabrics are classifiable in heading 6310, HTSUS.
With respect to the classification of the subject rolls or bales of trimmings/cuttings at the subheading level, we must determine whether the trimmings/cuttings are “sorted.” EN 6310.10 states that “[p]roducts of heading 63.10 are considered ‘sorted’ when graded according to specific criteria or when resulting from the use of a particular textile product (e.g., goods of the same nature or the same textile material, twine of uniform textile composition, new snippings all of the same colour).” The trimmings/cuttings from the nonwoven geotextile fabric are of the same textile material and we have no reason to believe that the trimmings/cuttings are not of the same color as well. Therefore, the subject rolls or bales of trimmings/cuttings from the nonwoven geotextile fabric are classifiable in subheading 6310.10, and more specifically, under subheading 6310.10.20, HTSUS, which provides for “Used or new rags, scrap twine, cordage, rope and cables, and worn out articles of twine, cordage, rope or cables, of textile materials: Sorted: Other: Of man-made fibers.”
You state that the nonwoven geotextile fabric will be produced and trimmed/cut in a FTZ using domestic and privileged foreign status polypropylene staple fiber. You indicate that the privileged foreign polypropylene staple fibers are classified under subheading 5503.40.00, HTSUS, which provides for “Synthetic staple fibers, not carded, combed or otherwise processed for spinning: Of polypropylene.”
In accordance with Title 19, Code of Federal Regulations (“C.F.R.”) section 146.41(e) (19 C.F.R. § 146.41(e)), “[a] status as privileged foreign merchandise cannot be abandoned and remains applicable to the merchandise even if changed in form by manipulation or manufacture, except in the case of recoverable waste (see §146.42(b)), as long as the merchandise remains within the purview of the Act.” Moreover, 19 C.F.R. § 146.65(a) states, in relevant part, that “[p]rivileged foreign merchandise provided for in this section will be subject to tariff classification according to its character, condition and quantity, at the rate of duty and tax in force on the date of filing, in complete and proper form, the application for privileged status.” Therefore, while the subject nonwoven geotextile fabrics would be classified under heading 5603, HTSUS, if they were not subject to the FTZ regulations, importation of these goods from a FTZ into the Customs territory under privileged status means that the merchandise is classified under the tariff classification of the polypropylene staple fiber from the date of filing the application for privileged foreign status. In this case, you claim that the merchandise was classified in subheading 5503.40.00, HTSUS, therefore, the nonwoven geotextile fabric imported into Customs territory will maintain that classification. Also, please note that the SKAPS’ “defective finished fabric[s]” would also be classified in this subheading.
With regard to the tariff classification of the bales or rolls of trimmings/cuttings of fabric resulting from the production of the nonwoven geotextile fabrics in the FTZ, we must refer to Title 19 of the United States Code, section 81c (19 U.S.C. § 81c), which concerns customs laws concerning FTZs, and revisit the regulations. Section 81c states, in relevant part, that “if recoverable waste is sent into customs territory, it shall be dutiable and taxable in its condition and quantity and at its weight at the time of entry.” Section 146.42(b) states that “[w]aste recovered from any manipulation or manufacture of privileged foreign merchandise in a zone” will have nonprivileged foreign merchandise status. See also 19 C.F.R. § 146.41(e). Section 146.65(a)(2) states that “[n]onprivileged foreign merchandise provided for in this section will be subject to tariff classification in accordance with its character, condition and quantity as constructively transferred to Customs territory at the time the entry or entry summary is filed with Customs.” The term “waste” was discussed in HQ 229589, dated October 24, 2002. That ruling referred to court cases that defined the term:
Waste in various Customs’ contexts has been the subject of the following court decisions. In Patton v. United States, 159 U.S. 500, 503, 16 S. Ct. 89 (1895), the Court stated that
[t]he prominent characteristic running through all these definitions [of waste] is that of refuse, or material that is not susceptible of being used for the ordinary purposes of manufacture. It does not presuppose that the article is absolutely worthless, but that it is unmerchantable, and used for purposes for which merchantable material of the same class is unsuitable.
See also, Latimer v. United States, 223 U.S. 501, 504, 32 S. Ct. 242 (1912), in which the Court stated that "[t]he word [waste] as thus used generally refers to remnants and by-products of small value that have not the quality or utility either of the finished product or of the raw material." These Supreme Court cases were cited and relied upon in Mawer-Gulden-Annis (Inc.) v. United States, (17 CCPA 270, T.D. 43689 (1929)), in which broken green olives, imported in casks in brine and used to make garnishing or sandwich material, were held not to be waste on the basis that the broken green olives "possess[ed] the same food qualities and some of the uses of whole pitted green olives" (17 CCPA at 272). See also, Willits & Co. v. United States, 11 Ct. Cust. App. 499, 501-502, T.D. 39657 (1923), in which certain beef cracklings were held to be waste as material not susceptible of being used in the ordinary operations of a packing house, material not sought or
purposely produced as a by-product in the industry, material not processed after it became a waste, and not possessing the characteristics of its original estate.
Id.
HQ 228969, dated September 27, 2002, applied the “common usage of the term recoverable” in determining whether a product constituted recoverable waste. We note that the Oxford English Dictionary defines the term “recoverable” as “[a]ble to be recovered or regained; retrievable, reusable.”
Based on the foregoing, the bales or rolls of trimmings/cuttings are recoverable waste from the manufacture of privileged foreign merchandise in a FTZ because they are of small value, and they do not have the same utility as the original nonwoven geotextile fabric as supported by your statement that they are sold to a recycler rather than being used as drainage products for environmental and civil use. We find that the trimmings/cuttings are recoverable because they may be retrieved and reused or recycled. The subject rolls or bales of trimmings/cuttings, therefore, have nonprivileged foreign merchandise status and are classified “in accordance with [their] character, condition and quantity as constructively transferred to Customs territory at the time the entry or entry summary is filed with Customs.” 19 C.F.R.
§ 146.65(a)(2). Accordingly, the subject rolls or bales of trimmings/cuttings are classified under subheading 6310.10.20, HTSUS, which provides for “Used or new rags, scrap twine, cordage, rope and cables, and worn out articles of twine, cordage, rope or cables, of textile materials: Sorted: Other: Of man-made fibers.”
HOLDING:
Under the authority of GRIs 1 and 6, the nonwoven geotextile fabrics with product numbers GT 135, GT 140, and GT 160, and the “defective finished fabric[s]”, are classified in heading 5503, HTSUS, and specifically, under subheading 5503.40.00, HTSUS, which provides for “Synthetic staple fibers, not carded, combed or otherwise processed for spinning: Of polypropylene.” The 2017 column one, general rate of duty for each of these subheadings is 4.3 percent ad valorem.
Under the authority of GRIs 1 and 6, the rolls or bales of trimmings/cuttings of fabric produced as a result of the production of the nonwoven geotextile fabric, are classified in heading 6310, HTSUS, and specifically under subheading 6310.10.20, HTSUS, which provides for “Used or new rags, scrap twine, cordage, rope and cables, and worn out articles of twine, cordage, rope or cables, of textile materials: Sorted: Other: Of man-made fibers.” The 2017 column one, general rate of duty for each of these subheadings is Free.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
Sincerely,
Ieva K. O’Rourke, Chief
Food, Textiles and Marking Branch