CLA-2: OT:RR:CTF:TCM H004162 KSH
Port Director
U.S. Customs and Border Protection
6747 Engle Road
Middleburg Heights, OH 44130-7939
RE: Application for Further Review of Protest 4101-06-100090
Dear Port Director:
This is in reply to your correspondence forwarding protest and Application for Further Review of Protest (AFR) 4101-06-100090, filed by Drinker Biddle Gardner & Carton, on behalf of its client, Synthetic Resources, Inc. The protest is against Customs and Border Protection’s (CBP) classification and liquidation of one entry of nylon woven fabrics coated with a clear layer of polyurethane under subheadings 5407.42.0060 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).
On January 23, 2006, protestant entered the merchandise subject to this protest in subheading 5903.20.2500, HTSUSA, which provides for “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: With polyurethane: Of man-made fibers: Other, Other.” The merchandise was liquidated on June 7, 2006, in subheading 5407.42.0060, HTSUSA, which provides for “Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics: Containing 85 percent or more by weight of filaments of nylon or other polyamides: Dyed, Weighing more than 170 g/m².”
On May 12, 2006, CBP issued a Notice of Action giving notice of a rate advance and proposing classification under subheading 5407.42.0060, HTSUSA. On August 2, 2006, protestant filed a protest and application for further review against the classification and liquidation of the merchandise in subheading 5407.42.0060, HTSUSA. Protestant’s AFR request and protest were subsequently granted. The protest was timely filed pursuant to 19 U.S.C. 1514 (c)(3).
In support of protestant’s application for further review, protestant alleges that the protest is inconsistent with a ruling of 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, protestant cites to New York Ruling Letters (NY) A85467, dated August 13, 1998; NY A86514, dated August 13, 1998; NY 810189, dated November 1, 1995; and M80456, dated March 7, 2006. Further review is warranted pursuant to 19 CFR §§174.24(b) and 174.25.
FACTS:
The two sample fabrics at issue are identified as style NA60026 and style NA60093. They are woven and coated on one side with a clear polyurethane coating. The fabrics are used to create backpacks, luggage and similar articles. Style NA60026 is a nylon packcloth fabric made from 400 denier nylon thread. The weight of the nylon is 4.127oz./yd² and style comprises 82% of the total weight of the fabric. The clear polyurethane coating weighs 0.929 oz./yd² and comprises 18% of the total weight. Style NA60093 is a nylon oxford fabric made from 60 denier nylon thread. The nylon fabric weighs 3 oz./yd² and comprises 86% of the total weight of the fabric. The clear polyurethane coating weighs 0.5 oz./yd² and comprises 14% of the weight fabric.
ISSUE:
Whether the fabrics are classified in heading 5407, HTSUSA, as woven fabrics of synthetic filament yarn or heading 5903, HTSUSA, as textile fabrics impregnated, coated, covered or laminated with plastics.
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized Tariff Schedule at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. It is Customs and Border Protections’ (CBP) practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUSA. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Heading 5407, HTSUSA, provides for the classification of "Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404." Materials of heading 5404, HTSUS, include, in part, "strip and the like (for example, artificial straw) of synthetic textile materials of an apparent width not exceeding 5 mm."
Heading 5903, HTSUSA, provides for “[t]extile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 59.02.” Chapter 59, Note 2 provides, in pertinent part: Heading 5903 applies to:
(a) Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than:
(1) Fabrics in which the impregnation, coating or covering cannot be seen with the naked eye…; for the purpose of this provision, no account should be taken of any resulting change in color.
The EN to heading 5903, HTSUSA, provides in relevant part:
This heading covers textile fabrics which have been impregnated, coated, covered or laminated with plastics (e.g., poly(vinyl chloride)).
Such products are classified here whatever their weight per m² and whatever the nature of the plastic component (compact or cellular), provided:
(1) That, in the case of impregnated, coated or covered fabrics, the impregnation, coating or covering can be seen with the naked eye otherwise than by a resulting change in colour.
Textile fabrics in which the impregnation, coating or covering cannot be seen with the naked eye or can be seen only by reason of a resulting change in colour usually fall in Chapters 50 to 55, 58 or 60. Examples of such fabrics are those impregnated with substances designed solely to render them crease-proof, moth-proof, unshrinkable or waterproof (e.g., waterproof gabardines and poplins). Textile fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments are also classified in Chapters 50 to 55, 58 or 60.
It is undisputed that the subject fabrics have been coated with a clear polyurethane layer. At issue is whether this coating is visible to the naked eye. If the coating is not visible to the naked eye, the fabrics will be excluded from heading 5903, HTSUSA, and will be classified in heading 5407, HTSUSA.
A fabric is considered a fabric of heading 5903, HTSUSA, if its impregnation, coating or covering of plastics is visible to the naked eye as required by Note 2(a)(1) to Chapter 59, HTSUSA, with no account taken of any resulting change in color. It is CBP’s longstanding view that the wording of Note 2(a)(1), "visible to the naked eye," is a clear expression by the drafters of the Harmonized System that a significant, if not substantial, amount of material must be added to a fabric for it to be considered impregnated, coated or covered. The plastic material added to the fabric must be visibly distinguishable from the fabric without the use of magnification. CBP believes this criterion is satisfied when the application of plastics material visibly affects the surface character of the fabric (Headquarters Ruling (HQ) 967884, dated October 26, 2005); the plastic is visible in the interstices of the fabric HQ 961172, dated August 6, 1998); the thread or weave is blurred or obscured, (HQ 089772, September 11, 1991); or the surface of the fabric is leveled or smoothed and the coating itself creates a distinct visible pattern (Id.). These factors are not exclusive and none is determinative.
No account should be taken of any resulting change in only shine, reflectivity, dullness or other property which causes the viewer to see the effect rather than presence of plastic material. See generally HQ 967884, dated October 26, 2005, on the classification of certain pants with polyurethane coating; HQ 082219, dated November 21, 1988, on the classification of three fabrics; HQ 085245, dated August 31, 1989, on the classification of a men's nylon coat made of certain coated fabrics; HQ 087941, dated December 12, 1990, on the classification of certain fusible interlining fabrics from Japan; and HQ 084165, dated June 26, 1989, on the classification of certain fusible interlining fabrics. Applying the "visible to the naked eye" test on the fabric of styles NA60026 and NA60093, using normally corrected vision in a well-lighted room, we find that the clear polyurethane coating has filled the gaps in the interstices and/or the surface of the fabric is leveled or smoothed. Accordingly, the coating is visible to the naked eye and the fabrics are classified in heading 5903, HTSUSA.
Our decision is in accord with NYA85467, dated August 13, 1998; NY A86514, dated August 13, 1998; NY 810189, dated November 1, 1995; and M80456, dated March 7, 2006, in which substantially similar merchandise was classified in subheading 5903.20.2500, HTSUSA.
HOLDING:
By application of GRI 1, the fabrics are classified in heading 5903, HTSUSA. They are provided for in subheading 5903.20.2500, HTSUSA, which provides for “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: With polyurethane: Of man-made fibers: Other, Other.” The general column one rate of duty is 7.5% ad valorem.
Merchandise classified in subheading 5903.20.2500, HTSUSA, falls within textile category 229. Quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries. The textile category number above applies to merchandise produced in non-WTO member-countries. Quota and visa requirements are the result of international agreements that are subject to frequent negotiations and changes. To obtain the most current information on quota and visa requirements applicable to this merchandise, we suggest you check, close to the time of shipment, the "Textile Status Report for Absolute Quotas," which is available on our web site at www.cbp.gov. For current information regarding possible textile safeguard actions on goods from China and related issues, we refer you to the web site of the Office of Textiles and Apparel of the Department of Commerce at http://otexa.ita.doc.gov.
Protest number 4101-06-100090 is granted in full. In accordance with the Protest/Petition Processing Handbook, (CIS HB, January 2002, pp 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of 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 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