Revocation of Headquarters Ruling Letter (HQ) 960997;Portable, Soft-Sided, Insulated Cooler Bag; SGI,Incorporated v. United States, 122 F.3d 1468 (Fed. Cir.1997); Outer Layer of Fabric-backed, Compact Plastics

HQ 962242 March 17, 1999 CLA-2 RR:CR:TE 962242 GGD CATEGORY: Classification TARIFF NO.: 6307.90.9989 Ms. Sandy M. Rickert E. Besler & Company Post Office Box 66361 Chicago, Illinois 60666-0361 RE: Revocation of Headquarters Ruling Letter (HQ) 960997; Portable, Soft-Sided, Insulated Cooler Bag; SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997); Outer Layer of Fabric-backed, Compact Plastics Dear Ms. Rickert: In Headquarters Ruling Letter (HQ) 960997, issued to you June 18, 1998, on behalf of LTD Commodities, Inc., Customs classified a soft-sided, insulated cooler bag in subheading 3924.10.50, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), the provision for “Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other.” We have reviewed that ruling and have found it to be in error. Therefore, this ruling revokes HQ 960997. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of HQ 960997 was published on February 3, 1999, in the Customs Bulletin, Volume 33, Number 5. FACTS: In your initial request for a binding ruling, dated September 15, 1997, the merchandise at issue was described as a “Tote/Organizer” composed of 100 percent nylon with a PVC (polyvinyl chloride) lining. In HQ 960997, this office noted that the sample bag had an outer surface composed of PVC plastics embossed to resemble nylon material. It was subsequently determined that the PVC actually comprises the outward facing surface of a layer composed of a nylon woven fabric that is coated, covered or laminated with PVC, a non-cellular (compact) plastic. The “Tote/Organizer” is a portable, soft-sided, insulated cooler bag that is primarily designed to store and preserve food and/or beverages. The bag measures approximately 9 inches in height by 17 inches in width by 8-1/2 inches in depth, and is fitted on the interior of the lid with open mesh pockets. The inner lining of the bag (which is waterproof) is composed solely of PVC plastics. Between the outer layer and the lining is a layer of cellular plastic foam insulation material. The bag has a carrying strap of woven polypropelene. A zippered closure extends around the top flap on three sides. There are two open pockets extending the full width of the front and back of the bag’s exterior. ISSUE: Whether the insulated cooler bag is classified under heading 3924, HTSUSA, as a container with outer surface of plastics, or under heading 6307, HTSUSA, as an other made up (textile) article with outer surface of fabric-backed compact plastics. LAW AND ANALYSIS: Classification under the 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 GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI. As noted in HQ 960997, the classification of certain portable, soft-sided, insulated cooler bags with outer surface of plastics, was examined by the Court of Appeals for the Federal Circuit (CAFC) in SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997). The CAFC focused on whether food or beverages were involved with the eo nomine exemplars set forth in the tariff provisions at issue and, without discussion of heading 4202 exemplars that organize, store, protect, and/or carry food or beverages, the CAFC held that the appropriate classification for the cooler bags was subheading 3924.10.50, HTSUS, the provision for “Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other.” The Court stated that this classification “does encompass exemplars that are ejusdem generis with the coolers because their purpose is to contain food and beverages.” The exemplars (specifically enumerated in subheading 3924.10.10) which the Court noted in particular were the “various household containers for foodstuffs such as salt, pepper, mustard, and ketchup dispensers and serving pieces for food.” This office concluded that the CAFC’s decision in SGI should be implemented. Instructions were issued to Customs field personnel on March 18, 1998, and September 10, 1998 (and approved for dissemination to members of the importing community), by which the principles of the CAFC’s decision were expressly extended to portable, hard or soft-sided, insulated coolers and similar insulated containers (whose primary purpose is to store and preserve food and/or beverages), with outer surface of plastics and with outer surface of textile materials (classified in subheading 6307.90.9905, 6307.90.9907, or 6307.90.9909, HTSUSA, depending upon whether the outer surface is composed of cotton, man-made fibers, or other textile materials, respectively). The instruction issued on September 10, 1998, expressly extended the principles of the CAFC’s decision to foodstuff-related, insulated containers whose exterior layer is composed of a textile fabric that is coated, covered or laminated with compact plastics, with the plastic surface of the layer facing outward. Such containers are classified in subheading 6307.90.9989, HTSUSA, a provision which is currently not subject to quota/visa requirements. In light of the principles of the SGI decision, the instructions noted above, and the fact that the subject cooler bag has an outer layer that is composed of fabric-backed compact plastics, the “Tote/Organizer” is classified in subheading 6307.90.9989, HTSUSA. HOLDING: The portable, soft-sided, insulated cooler bag described as a “Tote/Organizer” is classified in subheading 6307.90.9989, HTSUSA, the provision for “Other made up [textile] articles, including dress patterns: Other: Other: Other, Other: Other.” The general column one duty rate is 7 percent ad valorem. HQ 960997, issued June 18, 1998, is hereby revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. Sincerely, John Durant, Director Commercial Rulings Division