Application for Further Review of Protest 0712-08-100219

HQ H042543 November 30, 2009 CLA-2: RR:CTF:TCM H042543 KSH CATEGORY: Classification TARIFF NO.: 6217.90.90 Port Director U.S. Customs and Border Protection Port of Champlain 237 West Service Road Champlain, NY 12919 RE: Application for Further Review of Protest 0712-08-100219 Dear Port Director: This is in reply to your correspondence forwarding Application for Further Review of Protest (AFR) 0712-08-100219, filed by counsel on behalf of its client Parapad, Inc. FACTS: The protest is against Customs and Border Protection’s (CBP) denial of preferential tariff treatment under the North American Free Trade Agreement (NAFTA) of thirteen entries of shoulder pads entered under heading 6217 of the Harmonized Tariff Schedule of the United States (HTSUS). Between December 7, 2006 and August 15, 2007, protestant entered the merchandise subject to this protest in heading 6217, HTSUS, which provides for: "Other made up clothing accessories; parts of garment or of clothing accessories, other than heading 6212.” Protestant claimed duty free treatment under the NAFTA as Canadian originating merchandise. On October 10, 2007, a CBP Form 28, Request for Information was issued. Protestant submitted a reply to the CF 28. As a result, a Notice of Action was issued to rate advance the entry on January 1, 2008. The merchandise was liquidated as NAFTA ineligible and subject to duties. On July 3, 2008, protestant filed a protest and application for further review against the denial of preferential tariff treatment under the NAFTA. Protestant’s AFR request was approved. The merchandise at issue is shoulder pads consisting of a top and bottom layer and an inside filler. You state that the top layer is a non-originating 80% polyester/ 20% viscose non-woven fabric from Germany. The middle layer is a non-originating woven cotton fabric from China which may be dyed in Canada and non-originating 100% cotton wadding fiber from India and manufactured in Canada or, as described by counsel, as a layer of Hymo fabric woven in Mexico from 30% cotton, 25% viscose, 18% polyester, 25% hair and 2% polyester filament from non-originating countries. The bottom layer is a 100% polyester needle punch nonwoven fabric from the United States. All fabrics are cut to shape into components and sewn or needle-punched into shoulder pads in Canada. ISSUE: Whether the shoulder pads are eligible for duty free treatment under the NAFTA. LAW AND ANALYSIS: Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed within 180 days of liquidation of the entry made on December 7, 2006. (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 the protest is warranted pursuant to 19 CFR §§174.24(b) and 174.25 as the protest is alleged to be 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 the cancellation of two Notices of Rate Advances. General Note 12, HTSUS, incorporates Article 401 of the NAFTA into the HTSUS. Note 12(a), HTSUS, provides, in pertinent part: * * *(i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules... and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate... .  Accordingly, the merchandise at issue will be eligible for the "Special" "CA" rate of duty provided it is a NAFTA "originating" good under General Note 12(b), HTSUS, and it qualifies to be marked as a good of Canada. Note 12(b), HTSUS, provides, in pertinent part,  For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if-- (i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or* * * Accordingly, the subject merchandise qualifies for NAFTA treatment only if the provisions of General Note 12(b)(ii)(A), HTSUS, are met, that is, if the merchandise is transformed in the territory of Canada so that the non-originating materials undergo a change in tariff classification as described in subdivision (t). As the shoulder pads are classifiable in heading 6217, HTSUS, subdivision (t), Chapter 62, rule 38, applies. That note states: A change to headings 6213 through 6217 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6002, provided that the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties. Chapter rule 3, GN 12(t)/62, HTSUS, which is applicable to goods classifiable in Chapter 62, HTSUS, provides: For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. If the rule requires that the good must also satisfy the tariff change requirements for visible lining fabrics listed in chapter rule 1 for this chapter, such requirement shall only apply to the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings. Pursuant to GRI 3, protestant contends that the essential character is imparted by the fabric of the top layer of the shoulder pads. Insofar as the top fabric is classified in a heading which is not excepted from the applicable tariff shift rule, specifically heading 5603, HTSUS, the shoulder pads are a NAFTA originating good. Protestant cites to New York Ruling Letter (NY) I84620, dated July 18, 2002, which was issued to protestant’s broker regarding the NAFTA eligibility of sleeve heads, identified as “shoulder pads.” Protestant maintains that I84620 is not controlling as it pertains to sleeve heads that only contain three fabrics (100% polyester felt fabric, woven canvas Hymo fabric and woven cotton fabric) and in which the Hymo fabric forms the top layer of the sleeve heads. The instant merchandise is made up of a top layer of fabric of heading 5603, HTSUS, which as protestant correctly notes is not excepted from the tariff shift rule; Hymo fabric that is made up of cotton wadding of heading 5601, HTSUS, which is not excepted from the tariff shift rule; and a middle layer composed of non-originating woven cotton fabric classified in heading 5208, HTSUS, that is excepted by subdivision (t), chapter 62, rule 38. It is a well accepted maxim of Customs law that a garment will ordinarily be classified according to the material of its outer shell. See HQ 959732, dated April 28, (relating "understanding that apparel [is] intended to be classified ... according to its outer shell"); Classification of Garments Composed in Part of Linings or Interlinings of Specialized Fabrics or Nonwoven Insulating Layers, 56 Fed. Reg. 46372, T.D. 91-79 (Sept. 12, 1991) (Gore-Tex~ Notice) ("it is usually the outer shell which imparts the essential character to the garment because the outer shell normally creates the garment). In accordance with the foregoing, CBP agrees that the essential character is imparted by the top layer of fabric. As such, the merchandise meets the terms of the note. It is distinguishable from the merchandise at issue in NY I84260 which does not have an outer shell. Accordingly, the subject shoulder pads are eligible for NAFTA treatment.  Because we have determined that the shoulder pads are eligible for NAFTA treatment, we need not address protestant’s alternative claims. HOLDING: Protest number 0712-08-100219 is granted in full.  Based on the information provided, the shoulder pads are originating under the NAFTA and the special "CA" duty will apply. In accordance with Sections 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 the Office of International Trade, 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