Protest No. 2704-98-100050; classification of leather hides; upholstery leather; garmentleather

HQ 961952 March 12, 1999 CLA-2 RR:CR:TE 961952 RH CATEGORY: Classification TARIFF NO.: 4104.31.6040 Port Director United States Customs Service 300 South Ferry Street Los Angeles, CA 90731 RE: Protest No. 2704-98-100050; classification of leather hides; upholstery leather; garment leather Dear Sir: This is in reply to your memorandum dated May 26, 1998, concerning the Application for Further Review of Protest (AFR) number 2704-98-100050, filed by the law firm of Grunfeld, Desiderio, Lebowitz & Silverman, LLP, on behalf of Guess, Inc., concerning the classification of upholstery leather. Counsel submits that denial of the protest would be inconsistent with previous rulings and that the issue has not been previously ruled upon by the Commissioner or the Customs Courts. Thus, we find that review is warranted pursuant to 19 CFR §§174.24(a) and (b). FACTS: The record reveals that the protestant entered 470 pounds (3024,75 sq.ft.) of whole leather hides into the United States on July 2, 1997, and classified the merchandise under subheading 4104.31.4000 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as upholstery leather. Based on the fact that the protestant was an importer/manufacturer of wearing apparel, that the protestant admitted that the leather hides would be used in the manufacture of wearing apparel, and that a Customs laboratory determined that leather hides imported by the protestant from the same supplier in another entry had the characteristics of garment leather, Customs reclassified the merchandise under subheading 4104.31.6040, HTSUSA, as glove and garment leather. The entry was liquidated on November 7, 1997.  - 2 - ISSUE: Are the leather hides classifiable under subheading 4101.31.4000, HTSUSA, as upholstery leather, or under subheading 4104.31.6040, HTSUSA, as glove and garment leather? LAW AND ANALYSIS: Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Counsel admits that the protestant purchases the leather hides in order to make trim, e.g., collars, cuffs or patches, for its apparel products. However, the protestant contends that it generally orders the leather hides in a lower range of thickness used by an upholsterer (e.g., 6 to 8 millimeters) and that the Canadian supplier refers to the merchandise as “upholstery leather” because of its size (35 to 42 sq. ft.”). Thus, counsel argues that the merchandise is classifiable as “upholstery leather” under subheading 4104.31.6000, regardless of its ultimate use as apparel trim. Counsel did not produce any evidence to substantiate his claims. The record contains no invoices from the supplier. The protestant did not submit any documentation describing the size or other characteristics of the leather hides. The only direct evidence concerning the classification of the hides is the protestant’s admission that they are used in the manufacture of apparel. Moreover, we find persuasive, although not binding in this case, Customs laboratory report, number 7-97-01689-001, dated August 26, 1997, concerning leather hides imported by the protestant from the same manufacturer, which reads as follows: THE SAMPLE, A DARK BROWN COLORED SOFT AND DRAPABLE LEATHER HIDE DESCRIBED AS “WHOLE LEATHER HIDE.” MEASURES APPROXIMATELY 180 X 253 CENTIMETERS AND CONTAINS AN AVERAGE THICKNESS OF 1.20 MILLIMETERS. THE SAMPLE HAS THE CHARACTERISTICS OF GARMENT LEATHER (COWHIDE) THAT HAS BEEN CHROME TANNED. By statute, a Customs classification decision is presumed to be correct. 28 U.S.C. §2639(a)(1) (1994). In Universal Electronics, Inc. v. United States, 113 F. 3d 488 (Fed Cir. 1997), the court stated that the presumption of correctness is: [A] procedural device that is designed to allocate, between the two litigants to a lawsuit the burden of producing evidence in sufficient quantity. Specifically, the importer must produce evidence (burden of production portion of the burden of proof) that demonstrates - 3 - by a preponderance (the burden of persuasion portion of the burden of proof) that Customs classification decision is incorrect. The presumption of correctness certainly carries force on any factual components of a classification decision such as whether the subject imports fall within the scope of the tariff provision, because facts must be proven via evidence. Additionally, we considered various characteristics of the hides which substantiate that its principal use is not as upholstery leather. The hides at issue are relatively soft and drapable, which are not features generally characteristic of upholstery leather. Furthermore, the hides at issue are 1.20 mm thick, as stated in the Customs laboratory report. However, the Leather Technicians Handbook, by J.H. Sharphouse, B.Sc., establishes a normal thickness of 1.5 mm to 2.0 mm for upholstery leather. Finally, the hides in question have numerous imperfections (i.e., holes, indentations and dark discolorations) which would be noticeable on the large areas of upholstery leather. Finally, since the importer admits that the imported leather hides will be used as trim on wearing apparel and has not submitted any evidence to substantiate its claim that the principal use of the leather hides is for upholstery, we find that Customs correctly classified the hides as garment leather. HOLDING: The Protest should be DENIED. The leather hides are classifiable under subheading 4101.31.6040, of the 1997 HTSUSA, which provided for “Other bovine leather and equine leather, parchment-dressed or prepared after tanning: Full grains and full grain splits: Other: Other: Not fancy: Glove and garment.” They are classifiable under the general column one rate of 5 percent ad valorem. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, 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 or entries in accordance with the decision must be accomplished prior to mailing the decision. - 4 - Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs Personnel, and to the public on the Customs Home Page on the World Wide Web at ww.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, John Durant, Director Commercial Rulings Division