Application for Further Review of Protest No. 3901-10-100443 Naloprotex G-1 Sausage Casing

HQ H155323 March 30, 2012 CLA-2 RR:CTF:TCM H155323 EGJ CATEGORY: CLASSIFICATION TARIFF NO.: 6307.90.98 Port Director U.S. Customs and Border Protection 5600 Pearl StreetRosemont, IL 60018 Attn: Jeremy Baxter, Supervisory Import Specialist Re: Application for Further Review of Protest No. 3901-10-100443: Naloprotex G-1 Sausage Casing Dear Port Director: This is in response to Protest 3901-10-100443, dated April 30, 2010, filed by counsel on behalf of Kalle USA, Inc. (Protestant), in response to your classification of Naloprotex G-1 sausage casing under the Harmonized Tariff Schedule of the United States (HTSUS). A sample of the subject merchandise and a U.S. Customs and Border Protection (CBP) laboratory report were included with the protest. FACTS: The protested entry consists of Naloprotex G-1 sausage casing (sausage casing). Protestant imports the sausage casing in rolls of flattened tubes, which are wound around a cardboard core. Each flattened tube consists of a long sheet of material which is folded in half. The folded edges are glued together to form a tubular shape. The sausage casings come in a variety of widths and diameters, ranging from 58 mm wide (when flat) and 37 mm in diameter to 245 mm wide and 156 mm in diameter. After entry, Protestant cuts the tubes to length, adds flavors and sells the sausage casings to the processed meat industry. These buyers stuff the casings to create finished cooked sausages and other processed meat products. According to the CBP laboratory report, the sausage casing consists of an outer surface layer of a rubber/plastic material and an inner surface layer of woven fabric. The rubber/plastic material is composed of polyvinylidene chloride. The woven fabric is composed of viscose rayon/polyester blend fibers. The sample is composed of the following materials in percent by weight: 63% rubber/plastics coating and 37% woven fabric. ISSUES: What is the tariff classification of the G-1 sausage casing? LAW AND ANALYSIS: The subject merchandise was entered on March 30, 2009, and the entry liquidated on November 6, 2009. On April 30, 2010, Protestant submitted the subject Protest and Application for Further Review (AFR). The matter is protestable as a decision on classification. 19 U.S.C. §1514(a)(2). Protestant’s AFR satisfies application criteria because Protestant alleges that classification of G-1 raises questions of law which have not been ruled upon by CBP. 19 C.F.R. § 174.24(b). On November 14, 2011, Protestant submitted a supplementary argument to its AFR via an electronic correspondence with our office. Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context, which requires otherwise, by the Additional U.S. Rules of Interpretation. 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 their appropriate order. GRI 3(b) states that: When, by application of Rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings, classification shall be effected as follows: … Mixtures, composite goods consisting or different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. * * * * * The HTSUS provisions at issue are as follows: 3917 Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics … * * * * * 4823 Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers … * * * * * 5903 Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902 … * * * * * 6307 Other made up articles, including dress patterns … * * * * * Note 1 to Chapter 39 provides that: Throughout the tariff schedule the expression "plastics" means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticizer) by molding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence. Throughout the tariff schedule, any reference to "plastics" also includes vulcanized fiber. The expression, however, does not apply to materials regarded as textile materials of section XI. * * * * * Note 2(p) to Chapter 39 states that: This chapter does not cover: … (p) Goods of section XI (textiles and textile articles); … * * * * * Note 8 to Chapter 39 states that: For the purposes of heading 3917, the expression "tubes, pipes and hoses" means hollow products, whether semi-manufactured or finished products, of a kind generally used for conveying, conducting or distributing gases or liquids (for example, ribbed garden hose, perforated tubes). This expression also includes sausage casings and other lay-flat tubing. However, except for the last mentioned, those having an internal cross section other than round, oval, rectangular (in which the length does not exceed 1.5 times the width) or in the shape of a regular polygon are not to be regarded as tubes, pipes and hoses, but as profile shapes. * * * * * Notes 1(h) and 1(m) to Section XI (which includes Chapters 59 and 63) provide that: This section does not cover: … (h) Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39; … (m) Products or articles of chapter 48 (for example, cellulose wadding)… * * * * * Note 7(e) and Note 8 to Section XI (which includes Chapters 59 and 63) provides in pertinent part: 7. For the purposes of this section, the expression "made up" means: (e) Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded) … 8. For the purposes of chapters 50 to 60: (a) Chapters 50 to 55 and 60 and, except where the context otherwise requires, chapters 56 to 59, do not apply to goods made up within the meaning of note 7 above … * * * * * Note 1 to Chapter 54 provides that: 1. Throughout the tariff schedule, the term "man-made fibers" means staple fibers and filaments of organic polymers produced by manufacturing processes, either: (a) By polymerization of organic monomers to produce polymers such as polyamides, polyesters, polyolefins or polyurethanes, or by chemical modification of polymers produced by this process (for example, poly(vinyl alcohol) prepared by the hydrolysis of poly(vinyl acetate)); or (b) By dissolution or chemical treatment of natural organic polymers (for example, cellulose) to produce polymers such as cuprammonium rayon (cupro) or viscose rayon, or by chemical modification of natural organic polymers (for example, cellulose, casein and other proteins, or alginic acid), to produce polymers such as cellulose acetate or alginates. The terms "synthetic" and "artificial", used in relation to fibers, mean: synthetic: fibers as defined at (a); artificial: fibers as defined at (b). Strip and the like of heading 5404 or 5405 are not considered to be man-made fibers. * * * * * Note 3 to Chapter 56 provides, in pertinent part, that: Headings 5602 and 5603 cover respectively felt and nonwovens, impregnated, coated, covered or laminated with plastics or rubber whatever the nature of these materials (compact or cellular) … * * * * * Note 1 and Note 2(a) to Chapter 59 provide that: 1. Except where the context otherwise requires, for the purposes of this chapter the expression "textile fabrics" applies only to the woven fabrics of chapters 50 to 55 and headings 5803 and 5806, the braids and ornamental trimmings in the piece of heading 5808 and the knitted or crocheted fabrics of headings 6002 to 6006. 2. Heading 5903 applies to: (a) Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than: (1) Fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of color; (2) Products which cannot, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15oC and 30oC (usually chapter 39); (3) Products in which the textile fabric is 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 color (chapter 39); (4) Fabrics partially coated or partially covered with plastics and bearing designs resulting from these treatments (usually chapters 50 to 55, 58 or 60); (5) Plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (chapter 39); or (6) Textile products of heading 5811. * * * * * In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The ENs to Chapter 39 state, in pertinent part, the following: Plastics and textile combinations   Wall or ceiling coverings which comply with Note 9 to this Chapter are classified in heading 39.18.  Otherwise, the classification of plastics and textile combinations is essentially governed by Note 1 (h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59.  The following products are also covered by this Chapter :   (a)   Felt impregnated, coated, covered or laminated with plastics, containing 50 % or less by weight of textile material or felt completely embedded in plastics;   (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; (c)   Textile fabrics, impregnated, coated, covered or laminated with plastics, which cannot, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15 ºC and 30 ºC;   (d)   Plates, sheets and strip of cellular plastics combined with textile fabrics (as defined in Note 1 to Chapter 59), felt or nonwovens, where the textile is present merely for reinforcing purposes.   In this respect, unfigured, unbleached, bleached or uniformly dyed textile fabrics, felt or nonwovens, when applied to one face only of these plates, sheets or strip, are regarded as serving merely for reinforcing purposes.  Figured, printed or more elaborately worked textiles (e.g., by raising) and special products, such as pile fabrics, tulle and lace and textile products of heading 58.11, are regarded as having a function beyond that of mere reinforcement.   Plates, sheets and strip of cellular plastics combined with textile fabric on both faces, whatever the nature of the fabric, are excluded from this Chapter (generally heading 56.02, 56.03 or 59.03). * * * * * EN 39.12 (A), paragraph 2, states that: Regenerated cellulose is a glossy, transparent material usually obtained by precipitation and coagulation when an alkaline solution of cellulose xanthate is extruded into an acid bath. It is usually in the form of thin, transparent sheets which are classified in heading 39.20 or 39.21, or of textile filaments of Chapter 54 or 55. * * * * * The ENs to Chapter 48 state, in pertinent part, that: Paper consists essentially of the cellulosic fibers of the pulps of Chapter 47 felted together in sheet form … This Chapter also includes cellulose wadding and webs of cellulose fibers which consist of a variable number of very thin layers of loosely felted cellulose fibers rolled together when in a damp condition so that the layers tend to separate on drying … * * * * * According to the CBP laboratory report, the G-1 sausage casing is a layer of woven fabric coated with a layer of plastics. A textile fabric is a woven fabric of chapters 50 to 55. See Note 1 to Chapter 59. In general, Chapters 50 to 55 provide for silk, wool and other animal hair, cotton, vegetable textile fibers, man-made filaments and man-made staple fibers respectively. Chapter 54 addresses two types of man-made fibers: synthetic fibers and artificial fibers. The sausage casing’s fibers consist of polyester and regenerated cellulose. Polyester is specifically named as a synthetic fiber under Note 1(a) to Chapter 54. Regenerated cellulose is described in EN 39.92(A). When it is in the form of textile filaments, it is a product of Chapter 54. See EN 39.12(A). Therefore, both the polyester fibers and regenerated cellulose fibers are man-made fibers of Chapter 54. Since the woven fabric consists of man-made fibers of Chapter 54, it is classifiable as a textile fabric of Chapter 59. The woven fabric itself is classifiable in heading 5903, HTSUS, because it is a textile fabric coated in plastics. Additionally, none of the six exclusions set forth at Note 2 to Chapter 59 apply to the subject merchandise. However, the subject merchandise does not consist simply of woven fabric coated with plastic. The manufacturer has performed some work on the sausage casing by gluing two of the edges together to form a long, flattened tube which is rolled around a cardboard core. Therefore, the sausage casing is “made up” under the terms of Note 7(e) to Section XI because it is assembled by gluing. Two edges of the textile fabric are glued together to form a tubular shape. The sausage casing does not fall within the two parenthetical exceptions to Note 7(e) because it does not consist of two or more lengths of identical material joined end to end or assembled in layers. Rather, it consists of one length of material which is folded over and glued together along the edges. CBP has classified other rolls of textile materials with edges glued together as made up articles under heading 6307, HTSUS. See NY N086782, dated December 10, 2009 and HQ 084690, dated August 10, 1989. As such, the instant merchandise is excluded from classification in Chapters 50 to 60 under Note 8 to Section XI. In the November 14, 2011 supplement to its AFR, Protestant argues that the sausage casing cannot be classified under heading 6307, HTSUS, because the sausage casing is not a “textile article.” In support, Protestant cites to the definition of the tariff term “textile article” provided by the Court of International Trade (CIT) in Airflow Technology, Inc. v. United States, 45 Cust. B. & Dec. 47, 171-176 (Oct. 31, 2011) (Airflow). In Airflow, the CIT analyzed the scope of heading 5911, HTSUS, which provides for “Textile products and articles, for technical uses, specified in note 7 to this chapter …” Id. Note 7(a) to Chapter 59 describes “textile products” and Note 7(b) to Chapter 59 describes “textile articles” of heading 5911, HTSUS. Although we disagree with the premise that the plastic coated woven fabric from which the sausage casings are made is not a textile article, this line of analysis is irrelevant to classification in heading 6307, HTSUS. Heading 6307, HTSUS, provides for “made up articles” and not “textile articles.” Indeed, the tariff term “textile articles” does not appear in the Section Notes of Section XI, the Chapter Notes of Chapter 63 or in the terms of heading 6307, HTSUS. Although the term “textile articles” appears in both the title to Section XI and the title to Chapter 63, GRI 1 states that “The table of contents, alphabetical index, and titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes…” Therefore, we cannot apply the CIT’s definition of “textile articles” to heading 6307, HTSUS. In addition to the “textile articles” argument, Protestant asserts that the sausage casing is a composite good. Under GRI 3(b), a composite good is classified according to the component which imparts the essential character to the good. Protestant asserts that part of the sausage casing is classifiable as paper in heading 4823, HTSUS, and that the other part is classifiable as an article of plastics in heading 3917, HTSUS. Heading 4823, HTSUS, provides for “webs of cellulose fibers.” In paper manufacturing and in tariff terms, the phrase “webs of cellulose fibers” has a specific meaning.  To understand this term, we must first define “paper.”  The Dictionary of Paper, 215 (Michael Kouris ed., 5th Ed. 1996), defines paper as “the name for all kinds of matted or felted sheets of fiber … formed on a fine screen from a water suspension.” The ENs to Chapter 48 state that paper “consists essentially of the cellulosic fibers of the pulps of Chapter 47 felted together in sheet form.” The Dictionary of Paper defines a web as “(1) the sheet of paper coming from the paper machine in its full width or from a roll of paper in any converting operation. (2) the delicate sheet of fibers that exits a carding or airlay machine.” The tariff term is in the form of the plural “webs,” which implies more than one layer of fibers. The ENs further state that webs of cellulose fibers “consist of a variable number of very thin layers of loosely felted cellulose fibers rolled together when in a damp condition so that the layers tend to separate on drying.” Based upon these definitions, webs of cellulose fibers are paper products which consist of layers of loosely felted cellulose fibers. See also Headquarters Ruling Letter (HQ) 087480, dated February 18, 1993 (“we would be inclined to classify the product as a paper in Chapter 48…if [it] is felted together in sheet form”). The subject sausage casing contains one layer of woven fibers and not multiple layers of felted fibers. Therefore, we cannot classify it in heading 4823, HTSUS, as webs of cellulose fibers. The Protestant cites to a court case and a ruling to support classification of the sausage casing under heading 4823, HTSUS. However, the Protestant’s reliance on Vista International Packaging Co. v. United States, 19 C.I.T. 868 (1995) (Vista), is misplaced. In Vista, the CIT determined the tariff classification of a fibrous sausage casing. It consisted of a cylinder of abaca paper which was impregnated with plastic. Id. at 869. The CIT determined that the fibrous sausage casing was classified under heading 4823, HTSUS, as an article of paper or paperboard. Id. at 873. Similarly, in New York Ruling Letter (NY) N012747, dated July 18, 2007, CBP classified fleece paper tubes impregnated with plastics under heading 4823, HTSUS. However, the subject sausage casing does not consist of paper impregnated with plastics. Rather, it consists of woven fabric coated on one side with plastics. As such, the CIT’s holding in Vista and CBP’s decision in NY N012747 do not apply to the subject sausage casing. Similarly, Protestant’s argument regarding classification in Chapter 39 accounts for only the plastic part of the good under GRI 3(b). Contrary to Protestant’s assertion, the instant goods are not described by Note 8 to Chapter 39 as they are not “tubes of plastic” of heading 3917, HTSUS. The instant sausage casings are tubes of coated woven fabric. Protestant also cites to Note 1(h) to Section XI, which excludes “woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39” from classification in Section XI. Protestant states that sausage casings are “articles of” Chapter 39, and are excluded from classification in Section XI by Note 1(h). Protestant insists that Note 8 to Chapter 39 and Note 1(h) to Section XI provide a roadmap of Congress’ intent on how to classify sausage casings of Chapter 39. When read together with Note 2(a) to Chapter 59, Note 1(h) to Section XI clearly excludes woven fabrics which are impregnated, coated, covered, or laminated with plastics such that they fall within one of the six exclusions to heading 5903, HTSUS. Although they are not legally binding, the ENs to Chapter 39 lend persuasive support to this interpretation. They include a section entitled “Plastics and textile combinations.” This section states that “[T]he classification of plastics and textile combinations is essentially governed by Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59.” The subject sausage casing is a woven fabric. Based on the language of the section notes, chapter notes and ENs, CBP has consistently read Note 1(h) to Section XI and Note 2 to Chapter 59 together when classifying a good that is a combination of woven fabric and plastics. See, e.g. NY N086782, dated December 10, 2009, HQ 952072, dated September 16, 1992, and HQ 083013, dated March 20, 1989. In summary, the sausage casing’s material satisfies the definition of a textile fabric coated with plastics set forth at Note 2 to Chapter 59. However, the sausage casing’s glued edges satisfy the definition of a made up article under Note 7(e) to Section XI. Note 8 to Section XI precludes made up articles from classification in Chapter 59. Therefore, the sausage casing must be classified in heading 6307, HTSUS, which provides for made up articles and not in heading 5903, HTSUS, which provides for textile fabrics. Note 2(p) to Chapter 39 states that “goods of Section XI” cannot be classified in Chapter 39. Since the sausage casing is classified in heading 6307, HTSUS, it cannot be classified in Chapter 39. The sausage casing is not precluded from classification in Section XI by Note 1(h) to Section XI because it is not “Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39.” (emphasis added). Also, since the sausage casing is not classifiable in Chapter 48, it is not precluded from classification as a textile or textile article by Note 1(m) to Section XI. HOLDING: By application of GRI 1 (Note 2(p) to Chapter 39, Notes 1(h), 7 and 8 to Section XI and Note 2 to Chapter 59), the sausage casing is classified in heading 6307, HTSUS. Specifically, the sausage casing is classified in subheading 6307.90.98, HTSUS, which provides for “Other made up articles, including dress patterns: other: other: other ..” The column one, general rate of duty is seven percent ad valorem. You are instructed to DENY the protest. Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov. You are to mail this letter 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of this letter, 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