OT:RR:CTF:CPMM H294847 APP
Industrial and Manufacturing Materials
Center of Excellence and Expertise
U.S. Customs and Border Protection
726 Exchange Street, Suite 400
Buffalo, NY 14210
Attn.: Jose Estrada, Import Specialist
RE: Protest and Application for Further Review Number 4601-17-102281; Tariff classification of demo bags
Dear Mr. Estrada:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 4601-17-102281, timely filed on May 2, 2017, on behalf of Global Strategies, Inc. (“protestant”). The AFR concerns U.S. Customs and Border Protection’s (“CBP”) tariff classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of demo bags.
FACTS:
The demo bags at issue are tear resistant bags composed of woven polypropylene (“PP”) strips measuring less than 5mm in width and laminated on the outside. The bags are made of poly-woven plastic fiber construction. The composition of the bags is described as: “Pp milky white, Fabric size: 750mm (variation on + side), Bag size: 75cm*120cm, Bag weight: 140gm (7% negative side), Fabric strength: 110lbs minimum, Mesh: 10 x 10.” The bags are advertised as “Demo Bags, Tear Resistant Bags, “The Ultimate Contractor Clean-up Bag,” “Heavy Duty Stuff! Strong Enough for Anything!,” “Ideal For: Wood, brick, metal, dry wall, shingles, pipe, glass, cable, gravel, insulation, wire, slate, tiles, masonry, shrubbery.” The importer’s website states that the bags are “highly tear resistant … reusable 3-5 times, water and weather proof … tough and durable.” The price per bag is $0.33. The bags are used by masons, plasterers, carpenters, plumbers, and landscapers.
The Protest and AFR cover seven entries of the subject demo bags from India made from September 9, 2015 through June 6, 2016, under subheading 3923.29.0000, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), at 3 percent ad valorem, which provided for “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of other plastics.” Articles from India classified under subheading 3923.29.0000, HTSUSA, were marked with the symbol “A” in the harmonized tariff schedule and were eligible for duty-free treatment under the General System of Preferences (“GSP”) at the time of entry. From November 4-18, 2016, five entries were liquidated under subheading 3923.29.0000, HTSUSA, as entered, and two entries were liquidated under
subheading 6305.33.0010, HTSUSA, dutiable at 8.4 percent ad valorem, which provided for “Sacks and bags, of a kind used for the packing of goods: Of man-made textile materials: Other, of polyethylene or polypropylene strip or the like: Weighing one kg or more.” Articles from India classified under subheading 6305.33.0010, HTSUSA, were not eligible for GSP. This Protest/AFR, filed on May 2, 2017, requests reliquidation under subheading 3923.29.0000.
ISSUE:
What is the tariff classification of the instant demo bags?
LAW AND ANALYSIS:
CBP first notes that the matter is protestable under 19 U.S.C. § 1514(a)(2), as a matter on classification. The Protest/AFR was timely filed within 180 days of liquidation of the entries. See 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 this Protest is properly accorded to protestant pursuant to 19 C.F.R.
§ 174.24(b) because the decision against which the Protest was filed involves questions of law or fact, which have not been ruled upon by the Commissioner of Customs or his designee, or by the courts.
Merchandise imported into the United States is classified under the HTSUS, in accordance with the General Rules of Interpretation (“GRIs”). 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 order. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level.
The HTSUS provisions under consideration are as follows:
3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics:
6305 Sacks and bags, of a kind used for the packing of goods:
6307 Other made up articles, including dress patterns:
Additional U.S. Rule of Interpretation (“AUSRI”) 1(a) provides that:
In the absence of special language or context which otherwise requires-- (a) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.
Note 1(g) to Section XI, HTSUS, which covers chapter 63, HTSUS, states:
This Section does not cover:
(g) Monofilament of which any cross-sectional dimension exceeds 1 mm or strip or the like (for example, artificial straw) of an apparent width exceeding 5 mm, of plastics (chapter 39), ….
In interpreting the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) may be utilized. The ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed.
Reg. 35127, 35128 (August 23, 1989).
The General Notes to chapter 39 (Plastic and Textile Combinations), provide, in relevant part:
… The following products are also covered by this Chapter: … (b) Textile fabrics and nonwovens, either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour; ….
EN 39.23 states, in relevant part:
This heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products. The articles covered include:
(a) Containers such as … sacks and bags (including cones and refuse sacks), ….
The General Notes to EN 63 state, in relevant part:
This Chapter includes:
(1) Under headings 63.01 to 63.07 (sub Chapter I) made up textile articles of any textile fabric (woven or knitted fabric, felt, nonwovens, etc.) which are not more specifically described in other Chapters of Section XI or elsewhere in the Nomenclature. (The expression “made up textile articles” means articles made up in the sense defined in Note 7 to Section XI (see also Part (II) of the General Explanatory Note to Section XI.)
EN 63.05 states, in relevant part:
This heading covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale.
These articles, which vary in size and shape, include in particular flexible intermediate bulk containers, coal, grain, flour, potato, coffee or similar sacks, mail bags, and small bags of the kind used for sending samples of merchandise by post. The heading also includes such articles as tea sachets.
Packing cloths which, after use as bale wrappings, are roughly or loosely stitched together at the edges, but which do not constitute finished or unfinished sacks or bags, are excluded (heading 63.07).
EN 63.07 states, in relevant part:
This heading covers made up articles of any textile material which are not included more specifically in other headings of Section XI or elsewhere in the Nomenclature.
Protestant asserts that the instant bags are coated on both sides with heat sealed seems and as such are classifiable in heading 3923, HTSUS, specifically under subheading 3923.29.00, HTSUS. Protestant claims that the bags are not designed or used consistent with heading 6305.
The classification of the bags is dependent upon whether the material from which the bags are made is a textile or plastic material. The demo bags are comprised of woven polypropylene strips measuring less than 5mm in width, which renders them a textile material of chapter 63, HTSUS, for tariff classification purposes pursuant to section XI, note 1(g), HTSUS. The specifications provided by protestant do not reveal any coating and the submitted master purchase order reveals that the bags were laminated only on one side. Without coating, the strips from which the fabric is made meet the width requirement of section XI, note 1(g) as textile materials and not plastics. Since, based on the information presented, the bags are not coated on both sides with plastic, they are not classifiable in chapter 39, HTSUS, which covers “Textile fabrics and nonwovens, either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of colour.” General ENs to chapter 39. The polypropylene packaging bags in NY N031699 and the polyethylene container liner bags in NY N013534, cited by protestant, are distinguishable because unlike the instant bags they had plastic coating.
We will next determine the correct heading within chapter 63, HTSUS. Heading 6305, HTSUS, covers sacks and bags, of a kind used for the packing of goods. This heading covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale composed of polyethylene or polypropylene strip such as coal, grain, flour, potato, coffee or similar sacks. See EN 65.03. Heading 6305, HTSUS, includes the tariff term “of a kind,” which means that it is a principal use provision. Under AUSRI 1(a), tariff classification under a principal use provision must be determined in accordance with the use in the United States of that class or kind to which the imported goods belong. Thus, in order to be classified as a sack or bag of a kind used for packing, the demo bags must belong to the same kind or class of goods as those used for packing.
In United States v. Carborundum Co., 63 C.C.P.A. 98, 102, 536 F.2d 373, 377 (1976), cert. denied, 429 U.S. 979 (1976), the court considered various factors to determine whether an article is included in a particular class or kind of merchandise, including: (1) the general physical characteristics of the merchandise; (2) the channels, class or kind of trade in which the merchandise moves (where the merchandise is sold); (3) the expectation of the ultimate purchasers; (4) the environment of the sale such as the accompanying accessories and marketing; (5) usage, if any, in the same manner as merchandise which defines the class; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use. While these factors were developed under the Tariff Schedule of the United States (predecessor to the HTSUS), the courts have also applied them under the HTSUS. See Aromont USA, Inc. v. United States, 671 F.3d 1310 (Fed. Cir. 2012); Essex Mfg., Inc. v. United States, 30 CIT 1 (2006).
Thus, we need to apply the Carborundum factors to the demo bags to determine if the bags are of the same class or kind of good as goods used for packing of heading 6305, HTSUS. Looking at the demo bags’ physical characteristics, they are reusable tear resistant bags of polypropylene strips measuring less than 5mm in width and laminated on the outside. In terms of channels of trade, the demo bags are sold in Home Depot, Home Depot Canada, Timbermart, Lowes, Do-It-Best and Ace Hardware, True Value Lumber Merchandizing Cooperative and KAMCO, White Cap/HD Supply, and several small retailers nationally and internationally. According to the protestant’s website, the bags have been tested and certified. The primary target markets for the bags include contractors, builders, pro-remodelers, and landscapers. Secondary markets include do-it-yourselfers, farmers, junk-removers, businesses, and homeowners.
CBP has previously issued rulings, which describe and classify bags used for the packing of goods of heading 6305, HTSUS. In Headquarters Ruling Letter (“HQ”) 958078, dated December 12, 1995, CBP examined textile drawstring bags used to transport experimental seeds. Researchers extracted seeds from experimental plots, placed them in the bags, and packed the bags into boxes. The boxes were shipped to research facilities for evaluation. After evaluation, the researchers discarded the textile bags. CBP classified these and similar textile bags for shipping laboratory specimens under heading 6305, HTSUS. See HQ 962003, dated August 31, 1999 (mineral laboratory test bags classified under 6305, HTSUS).
In HQ 967610, dated August 5, 2005, CBP classified sea-bulk woven liners used to transport bulk merchandise in an ocean shipping container made from a fabric of polyethylene strips woven into a fabric in heading 6305, HTSUS. In HQ H275824, dated March 13, 2017, CBP classified reusable bags of woven polypropylene strips used to store yard waste and to pack and transport recycled material in heading 6305, HTSUS. In HQ 963508, dated December 21, 2000, CBP classified a polypropylene woven bag that was circular in shape and used to transport sand under heading 6305, HTSUS. In HQ 961938, dated June 11, 1999, CBP classified a bag woven from polypropylene fabric with a lining used to transport sand under heading 6305, HTSUS. In HQ H238478, dated September 4, 2014, CBP classified an absorbent test tube holder made of nonwoven textile fabric designed for the safe transport of laboratory specimen tubes under heading 6305, HTSUS.
There is no requirement that sacks or bags of heading 6305, HTSUS, must transport or store only commercial merchandise for sale. This proposition is not supported by the text of heading 6305, the EN thereto, or our rulings. The instant demo bags are of the same class or kind as bags used for packing goods. Just like the bags in the rulings above, the demo bags are used to store and transport waste and other materials, and as such they are classifiable under heading 6305, HTSUS.
Heading 6307, HTSUS, is a residual provision that provides for other made up textile articles not specifically provided for elsewhere in the tariff. Since the instant demo bags are classified in heading 6305, HTSUS, they cannot be classified under heading 6307, HTSUS.
HOLDING:
By application of GRIs 1 and 6, the instant demo bags are classified in heading 6305, HTSUS, specifically under subheading 6305.33.0010, HTSUSA, which provides for “Sacks and bags, of a kind used for the packing of goods: Of man-made textile materials: Other, of polyethylene or polypropylene strip or the like: Weighing one kg or more.” The column one, general rate of duty at the time of entry, was 8.4 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
With respect to the five entries liquidated under subheading 3923.29.0000, HTSUSA, since the rate of duty under the classification indicated above is more than the liquidated rate, you are instructed to deny the protest in full with respect to these entries. You are instructed to grant the protest with respect to the two entries liquidated under subheading 6305.33.0010, HTSUSA. A copy of this decision should be attached to the Form 19 Notice of Action.
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 Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division