Application for Further Review of Protest No. 1601-07-100057; Classification of warp knit open-work tubular fabric.

HQ H008546 April 18, 2008     CLA-2 OT:RR:CTF:TCM H008546 KSH CATEGORY: Classification TARIFF NO.: 6003.30.1000  Port Director United States Customs and Border Protection 200 East Bay Street Charleston, SC 29401   RE: Application for Further Review of Protest No. 1601-07-100057; Classification of warp knit open-work tubular fabric.Dear Port Director: This is in reply to your correspondence forwarding Application for Further Review of Protest (AFR) 1601-07-100057, timely filed by Fuerst, Humphrey Ittleman, on behalf of GIRO Pack, Inc. The protest is against Customs and Border Protection’s (CBP) classification and liquidation of 43 entries of warp knit open-work tubular fabric under heading 6005 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for " Warp knit fabrics (including those made on galloon knitting machines), other than those of headings 6001 to 6004." Protestant entered the merchandise subject to this protest on various dates from July 12, 2005 to July 5, 2006, in heading 5608, HTSUS, which provides for “Knotted netting of twine, cordage or rope, made up fishing nets, and other made up nets of textile material.” The merchandise was liquidated in heading 6005, HTSUS, which provides for “Warp knit fabrics (including those made on galloon knitting machines), other than those of headings 6001 to 6004.” Liquidation of the entries occurred on September 8, 2006 and September 22, 2006. Protestant filed the protest with an AFR on February 6, 2007, challenging the reclassification and liquidation of the entries at issue. The protestant’s request for AFR was approved. The protest was timely filed pursuant to 19 U.S.C. 1514(c)(3). Protestant has alleged the decision against which the protest is filed 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 New York Rulings (NY) K82761, N004180, 859902 and Headquarters Ruling Letters (HQ) 083885, 223654, 952077, 967341, 950788 and 083272. Thus, further review is warranted pursuant to 19 CFR §§174.24(a) and 174.25. In reaching our decision herein, consideration was given to the telephone conference held between counsel for protestant and a member of my staff on April 8, 2008. FACTS: The merchandise at issue is identified as “GC-80-46-2225 USA AZUL-U, Bale of 3 of 1500 MT = 4500 MT.” It is a tubular polyethylene net mesh fabric imported in lengths of 1500 meters. The fabric is made from polyethylene strip that is twisted, heated and stretched to make the yarn to construct the fabric. After importation the netting is mounted into machinery at a packing station located on or near agricultural farms. The machine cuts the fabric into small bag-size pieces that are finished into individual bags to hold fresh produce.    ISSUE:   Whether the fabric is classified in heading 8422, HTSUS, as a part of packing or wrapping machinery, heading 5911, HTSUS, as a fabric for technical use, heading 5608, HTSUS, as other made up nets or heading 6003, HTSUS, as warp knit open-work fabric.   LAW AND ANALYSIS:   Classification of goods under the HTSUS 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 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 Protection’s (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). The protestant argues that the fabric is a part of packing machinery classifiable in heading 8422, HTSUS, because at the time of importation its identity is fixed with certainty, it is in an advanced state of manufacture and it is dedicated to one use, i.e., packing machinery. Alternatively, protestant argues that the fabric is classified in heading 5911, HTSUS, as it meets the requirements of Note 7(a)(vi) to Section XI, HTSUS, as cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing or lubricating materials. Failing classification in heading 8422, HTSUS, or heading 5911, HTSUS, protestant states that its original classification at the time of entry in heading 5608, HTSUS, is appropriate as it meets the description of a made up net. Heading 8422 falls within Section XVI, HTSUS. Note 2(b) to Section XVI, HTSUS, provides in relevant part, “other parts, if suitable for use solely or principally with a particular kind of machine … are to be classified with the machines of that kind….” However, Additional U.S. Rule of Interpretation (AUSR) 1(c) adds:   A provision for parts of an article covers products solely or principally used as a part of such articles, but a provision for “parts” or “parts and accessories” shall not prevail over a specific provision for such part or accessory[.]   It is the position of CBP that the special language or context of Note 2(b) to Section XVI, HTSUS, only precludes the application of AUSR 1(c), HTSUS, where the competing provisions at issue are both within the same section or Chapter (depending on whether the "special language or context" arises in the context of a section note or chapter note). See Sharp Microelectronics Technology, Inc. v. United States, 122 F.3d 1446, 1453 (Fed. Cir. 1997), (Additional U.S. Rule 1(c), HTSUS, was applied where one competing provision was subject to Section XVI, Note 2, and the other competing provision was in Chapter 90, HTSUS). Cf. Nidec Corp. v. United States, 861 F. Supp. 136, aff’d 68 F. 3d 1333 (Fed Cir. 1995) (AUSR 1(c), HTSUS, was not applied where both competing provisions were subject to Section XVI, Note 2, HTSUS). The fabric is potentially classifiable in heading 8422, HTSUS, heading 6003, HTSUS, heading 5911, HTSUS, or heading 5608, HTSUS. Only heading 8422, HTSUS, is subject to Note 2 to Section XVI, HTSUS. Thus, AUSR 1(c) is applicable. Heading 8422, HTSUS, which provides for parts of packing machinery is less specific than the remaining provisions. As such, the fabric cannot be classified in heading 8422, HTSUS. We also note the decision of the Court of International Trade in Bauerhin Technologies Limited v. United States, 19 CIT 1441, 914 F.Supp. 554 (1995), aff’d 110 F.3d 774 (Fed. Cir. 1997), in which the court pointed out that there are two distinct lines of cases defining the word "part" in the tariff. Starting with United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322, 324, (1933), cert. denied, 292 U.S. 640 (1934), this line of cases holds that a part of an article "is something necessary to the completion of that article without which the article to which it is to be joined could not function as such article." Another line of cases evolved from United States v. Antonio Pompeo, 43 C.C.P.A. 9, C.A.D. 602 (1955), which held that a device may be a part of an article even though its use is optional and the article will function without it, if the device is dedicated for use upon the article, and, once installed, the article will not operate without it. In Brother Int'l Corp. v. United States, 26 CIT 867, 248 F. Supp. 2d 1224 (2002), the Court of International Trade held that printing cartridges were not classifiable as photographic film even though they contained a roll of chemically treated film at the time of importation. Id. at 875-76, 248 F. Supp. 2d at 1232. The court found that unlike photographic film, the printing cartridges were not the material on which a facsimile machine operates, were not the output of the facsimile machine, and once used, had no intrinsic value but were discarded. Id. at 876-77, 248 F. Supp. 2d at 1233. The court concluded that the printing cartridges are instead classified properly as part of a facsimile machine because they are an integral part of the facsimile machines that use them and are designed and constructed exclusively for use in certain facsimile machines. Id. at 873, 248 F. Supp. 2d at 1229-30. Similarly, the Court of Appeals for the Federal Circuit in Mita Copystar America v. United States, 160 F.3d 710 (Fed. Cir. 1998) held that toner cartridges for photocopier machines were properly classified as "parts and accessories of electrostatic photocopying apparatus," under subheading 9009.90.00, Id. at 714, notwithstanding the fact that the toner contained within the cartridges was itself classifiable as "chemical preparations for photographic uses" when imported separately. Id. at 712. The court reasoned that the cartridges were parts of photocopier machines because they "are sold with toner inside; they remain with the toner throughout its use by the photocopier; they are the standard device for providing toner to the photocopier; and they are not designed for reuse." Id. at 712-13. The fabric at issue is not similar to the printer cartridges at issue in Brother Int’l Corp or the toner cartridges in Mita Copystar America. It is not imported with the machinery in which it will subsequently be used. It has an intrinsic value once used (i.e., to hold produce). By contrast, it is the material on which the machine that uses it operates. It is the output of the machine. See American Express Co. v. United States, 29 C.C.P.A. 87, 95 (1941) (film separators designed for use and used for no purpose other than to separate sensitized films in a film pack, protect them from the light, and remove an exposed film from its exposed position to the back of the film pack were held not to be a part of the camera but the material on which it operates notwithstanding the fact that the camera cannot perform its function in the absence of the merchandise at issue) and HQ 958098, dated December 1, 1995. Heading 5911, HTSUS, provides for textile products for technical uses so long as they are specified in Note 7 to Chapter 59, HTSUS. Note 7 to Chapter 59, HTSUS, provides: Heading 5911 applies to the following goods, which do not fall in any other heading of section XI: (a) Textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other than those having the character of the products of headings 5908 to 5910), the following only: (i) Textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber, leather or other material, of a kind used for card clothing, and similar fabrics of a kind used for other technical purposes, including narrow fabrics made of velvet impregnated with rubber, for covering weaving spindles (weaving beams); (ii) Bolting cloth; (iii) Straining cloth of a kind used in oil presses or the like, of textile material or of human hair; (iv) Flat woven textile fabrics with multiple warp or weft, whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes; (v) Textile fabric reinforced with metal, of a kind used for technical purposes; (vi) Cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing or lubricating materials; (b) Textile articles (other than those of headings 5908 to 5910) of a kind used for technical purposes (for example, textile fabrics and felts, endless or fitted with linking devices, of a kind used in papermaking or similar machines (for example, for pulp or asbestos-cement), gaskets, washers, polishing discs and other machinery parts). In order for a fabric to be classified in heading 5911, HTSUSA, two prerequisites need be met: 1) the fabric must be for technical use; and 2) the fabric must be one of the fabrics enumerated in Note 7(a) (i) through (vi). Protestant argues that the fabric meets the terms of Note 7(a)(vi). Heading 5608, HTSUS, provides for “knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials.” The EN to heading 5608, HTSUS, states, in pertinent part: (1)  Knotted netting of twine, cordage or rope. These products are simply lengths of netting, i.e., open mesh knotted fabric made either by hand or by machine. They differ from the net fabrics of heading 58.04 in that they are made of the twine, cordage or rope of heading 56.07.   (2) Made up fishing nets and other made up nets, of textile materials.   * * * *   Made up nets are nets, whether or not ready for use, made directly to shape or assembled from pieces of netting. The presence of handles, rings, weights, floats, cords or other accessories does not affect the classification of the goods of this group.* * * * The heading does not cover: (a)   Netting in the piece produced by crochet work (headings 60.02 to 60.06).   * * * * The fabric is not formed by knots but by knitting. Moreover, it is not made of twine, cordage or rope but strip or the like of heading 5404, HTSUS. Nor is it a made up net. Since the fabric fails to meet the terms of the heading, the fabric cannot be classified in heading 5608, HTSUS, nor heading 5911, HTSUS. Heading 6003, HTSUS, provides for “Knitted or crocheted fabrics of a width not exceeding 30 cm, other than those of heading 6001 or 6002.” The EN to heading 6003, HTSUS, provides in relevant part: Other than the pile fabrics of heading 60.01, this heading covers knitted or crocheted fabrics of a width not exceeding 30 cm, containing no elastomeric yarn or rubber thread or containing by weight less than 5 % of such yarn or thread. The fabric at issue is made from synthetic textile strips that have been warp knit and the width of the open-work fabric is less than 30 centimeters. As such, it is classified in heading 6003, HTSUS. HOLDING:   Protest 1601-07-100057 is denied. The fabric at issue is classified in heading 6003, HTSUS. At the time of entry, it was provided for in subheading 6003.30.1000, HTSUS, which provides for “Knitted or crocheted fabrics of a width not exceeding 30 cm, other than those of heading 6001 or 6002: Of synthetic fibers: Open-work fabrics, warp knit.” The rate of duty at the time of entry was 14.1%, ad valorem. The applicable textile category code is 229. In accordance with Parts IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 Regulations and Rulings of the Office of International Trade 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