CLA-2 CO:R:C:G 087341 KWM
Ms. Ann M. Williams
A.N. Deringer, Inc.
30 West Service Road
Champlain, New York 12919-9703
RE: Labels; Clothing labels; man-made fiber; coated non-woven
material; coated woven material; coated textiles; parts
of clothing; American goods returned; Substantial
transformation.
Dear Ms. Williams:
This will acknowledge receipt of your correspondence
dated May 24, 1990, requesting a binding classification ruling
of "'Remay' man-made fiber labels" and "'Acetate' man-made
fiber labels" under the Harmonized Tariff Schedule of the
United States Annotated. After considering your request, we
find that the proper classification is as described below.
FACTS:
Two distinct types of merchandise are presented for
classification. The first is a man-made fiber label described
as a "Remay" label. It is composed of a non-woven polyester
coated with an acrylic material. The second is described as
"Acetate", and is composed of woven acetate coated with a
polyester material.
Both types of material are of U.S. origin. The
merchandise is sent to Canada, presumably in sheet form,
without marking or other working. In Canada the material is
perforated and holes are punched along the edges of the
material. The samples provided indicate that the holes
provide a pin-feed capability for printing. The punched and
perforated sheets are then shipped back to the U.S. where they
are printed. Your letter emphasizes that no printing is
performed in Canada.
Your first request is for classification of the punched
and perforated merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA). Secondly,
you have inquired as to whether heading 9802, HTSUSA,
regarding articles exported and returned, advanced or
improved abroad, may be applicable to the importation of the
goods.
ISSUES:
How is this merchandise classified under the Harmonized
Tariff Schedule of the United States Annotated?
Is heading 9802 of the Harmonized Tariff Schedule of the
United States Annotated applicable to the importation of these
goods?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of
the United States Annotated (HTSUSA) is made in accordance
with the General Rules of Interpretation (GRI's). The
systematic detail of the harmonized system is such that
virtually all goods are classified by application of GRI 1,
that is, according to the terms of the headings of the tariff
schedule and any relevant 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 be applied, taken in order.
In reviewing the HTSUSA, we note the following headings,
the terms of which indicate that they may be eligible for
classification of these goods:
"Remay" labels:
5603 Nonwovens, whether or not impregnated, coated,
covered or laminated:
or:
5807 Labels, badges and similar articles of textile
materials, in the piece, in strips or cut to
shape or size, not embroidered:
or:
6217 Other made up clothing accessories; parts of
garments or of clothing accessories, other than
those of heading 6212:
"Acetate" labels:
5903 Textile fabrics impregnated, coated, covered or
laminated with plastics, other than those of
heading 5902:
or:
5807 (See Above)
or:
6217 (See Above)
Your submission of May 24, 1990 suggested heading 5807,
HTSUSA, and we have also considered heading 6217, HTSUSA.
However, after reviewing the terms of the headings and
accompanying Explanatory Notes, we find that the instant goods
are not provided for under either of these headings, but
rather should be classified as textile materials based on
their composition.
Heading 5807, HTSUSA, Labels of Textile Material
Although your submission refers to both products as
"labels", they are essentially perforated sheets of textile
material, they have not acquired the characteristics of
clothing labels, and are not yet of a size or description
suitable for use as clothing labels. Also, your submission
points out that no printing is performed prior to importation.
Clothing labels are intended primarily, if not solely, to
convey printed information to a purchaser. Without such
printing, we cannot say here that the instant merchandise is
either a label or has acquired the essential character of a
label.
Heading 6217, HTSUSA, Parts and Made Up Accessories of
Garments
Both parts and accessories must be suitable for use
solely or principally with their primary good. Parts must be
essential or integral to the use of the good, while
accessories are intended to facilitate or improve the use.
Neither characterization is applicable here. Labels are not
integral to the use of a garment, nor do they facilitate its'
use. In addition, without printing which would be tailored
specifically to the garment in which the label was sewn, these
goods are not suited solely or principally with that garment.
Lastly, these goods are not "made up" as that term is used in
the nomenclature. Legal Note 7 to Section XI, HTSUSA,
indicates that a made up article may be cut otherwise than
into squares or rectangles, or produced in the finished state,
or cut to size having undergone a process of drawn thread
work. The instant merchandise meets none of these criteria.
It is not in a finished state, nor has it been 'cut' in the
common sense, merely perforated for separation at a later
stage.
Classification as Textile Materials
Having found that these goods are not made up, are not
parts or accessories, or that they have the essential
character of labels, the remaining eligible headings provide
for classification as a textile material.
"Remay", a composite material of non-woven man-made
polyester fibers coated with acrylic is provided for in
subheading 5603.00.90, HTSUSA. "Acetate", a composite
material of woven acetate man-made fiber coated with
polyurethane plastics is provided for in subheading
5903.20.2500, HTSUSA. The description of the goods classified
in each of these headings is set out above.
Applicability of Heading 9802.00.5040, HTSUSA
Your letter also requested a ruling on the applicability
of the partial duty exemption under subheading 9802.00.50,
HTSUSA, to the returned merchandise. This tariff provision
provides for the assessment of duty on the value of repairs or
alterations performed on articles sent abroad for that
purpose. However, such treatment is precluded where the
exported articles are incomplete for their intended use and
the foreign processing is a necessary step in the preparation
or manufacture of finished articles. Dolliff & Company, Inc.
v. United States, 81 Cust. Ct. 1, C.D. 4755, 455 F.Supp. 618
(1978), aff'd, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1979).
As the merchandise in this case clearly is not complete
for its intended use when exported to Canada, it is our
opinion that the perforating and punching operations exceed
the meaning of the terms "repairs" and "alterations."
Therefore, the returned labels will not be eligible for
reduced duty treatment under subheading 9802.00.50, HTSUSA.
HOLDING:
The labels referred to as "Remay" labels are classified
as coated nonwoven textile material of subheading 5603.00.90,
HTSUSA, dutiable at the rate of 12.5 percent ad valorem. The
applicable textile category is 223.
The labels referred to as "Acetate" labels are classified
as textile fabric of man-made fibers coated with polyurethane
of subheading 5903.20.2500, HTSUSA, dutiable at the rate of
8.5 percent ad valorem. The applicable textile category is
229.
The designated textile and apparel category may be
subdivided into parts. If so, the visa and quota category
requirements applicable to the subject merchandise may be
affected. Since part categories are the result of
international bilateral agreements which are subject to
frequent renegotiations and changes, to obtain the most
current information available, we suggest you check, close to
the time of shipment, the Status Report on Current Import
Quotas (Restraint Levels), an issuance of the U.S. Customs
Service, which is updated weekly and is available at your
local Customs office.
Due to the changeable nature of the statistical
annotation (the ninth and tenth digits of the classification)
and the restraint (quota/visa) categories, you should contact
your local Customs office prior to the importation of this
merchandise to determine the current status of any import
restraints or requirements.
Articles that meet the definition of "goods originating
in the territory of Canada" (see General Note 3(c)(vii)(B),
HTSUSA) are subject to reduced rates of duty under the United
States-Canada Free Trade Agreement Implementation Act of 1988.
If the merchandise constitutes "goods originating in the
territory of Canada," the applicable rate of duty for the
Remay and Acetate labels would be 10 percent ad valorem and
6.8 percent ad valorem respectively.
Sincerely,
John A. Durant
Director,
Commercial Rulings Division