Application for Further Review of Protest No 1303-11-100059; men’s outer garments

HQ H194735 April 15, 2015 CLA-2 OT:RR:CTF:TCM H194735 TNA CATEGORY: Classification TARIFF NO.: 6201.93.35 Port Director, Service Port- Baltimore U.S. Customs and Border Protection 40 South Gay StreetBaltimore, MD 21202 Attn: Bernice Greene, Import Specialist Re: Application for Further Review of Protest No: 1303-11-100059; men’s outer garments Dear Port Director: The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 1303-11-100059, timely filed on May 12, 2011. The AFR concerns the classification of men’s outer garments under the Harmonized Tariff Schedule of the United States (HTSUS). In coming to our decision, we have taken into account arguments presented at a meeting with my staff on January 10, 2013, as well as in a supplemental submission dated April 26, 2013. We regret the delay in responding. FACTS: The subject merchandise consists of two styles of men’s outer garments. Both are 100% polyester woven jackets. The first style at issue, “Style A,” is black. Protestant states that the lining of this style has an application of polyurethane. The second style at issue, “Style B,” is khaki-colored. Protestant states that the lining of this style has an application of Teflon (polytetrafluoroethylene), Unidyne TG-581, and Meikanate NEO padding. Both styles were entered in a single entry on August 19, 2010, under subheading 6201.93.30, HTSUS, which provides for: “Men’s or boys’ overcoats, carcoats, capes,cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Water Resistant.” U.S. Customs and Border Protection (“CBP”) liquidated the entry on November 19, 2010, in subheading 6201.93.35, HTSUS, which provides for: “Men's or boys' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other.” Protestant filed this Protest and AFR on May 12, 2011, claiming classification as entered. Prior to liquidation, CBP obtained samples of the subject merchandise from the entry at issue. On October 12, 2010, CBP sent the samples to the CBP laboratory in Savannah, Georgia, for water resistant testing analysis. Swatches from the outer shell and inner lining of both styles were tested twice in accordance with Additional U.S. Note 2 to Chapter 62, HTSUS. In CBP Laboratory Report Nos. SV20101639 and SV20101640, both issued on October 29, 2010, the CBP laboratory reported that both “Style A” and “Style B” failed the water resistance test. The laboratory’s worksheet summary further indicated that no rubber or plastics application was detected on the outer shell or the inner lining of either garments. Based on the findings set forth in Report Nos. SV20101639 and SV20101640, CBP liquidated the entry in subheading 6201.93.35, HTSUS. Protestant also had samples tested for water resistance both before and after entry by independent laboratories. Protestant commissioned the first round of testing from Bureau Veritas (“Veritas”), who tested the lining of both styles prior to entry on February 11, 2009. It performed another round of tests on October 25, 2010. In addition, Intertek tested both styles on November 9, 2010. The results from Veritas and Intertek found that the subject merchandise was water resistant within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. Another round of testing was performed by Harmonized Tariff Services, LLC (“HTSLLC”) on March 10, 2011. HTSLLC’s results concurred with those of the CBP laboratory that the subject merchandise was not water resistant within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS, and its findings reflected the same amount of water penetration reported by the CBP laboratory. Protestant requested that HTSLLC perform a second round of testing on a different part of the sample garments. The results of this second round of tests concurred with the results of Veritas and Intertek in finding the subject merchandise to be water resistant within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. ISSUE: Whether the subject men’s outer garments are “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. LAW AND ANALYSIS: Initially, we note that this matter 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.  (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 Protest No. 1303-11-100059 is properly warranted pursuant to 19 C.F.R. § 174.24(a) as the decision protested is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee. Specifically, the Protestant argues that the Port’s liquidation of the subject entry in accordance with the results of CBP’s laboratory reports contradicts HQ 226606, dated April 28, 1998, and HQ 957061, dated March 30, 1995. 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. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes. 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, GRIs 2 through 6 may then be applied in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5. The HTSUS provisions under consideration are as follows: 6201 Men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): 6201.93 Of man-made fibers: Other: Other: Other: 6201.93.30 Water resistant 6201.93.35 Other Additional U.S. Note 2 to Chapter 62, HTSUS, provides, in relevant part, as follows: For the purposes of subheadings . . . 6201.93.30 . . ., the term “water resistant” means that garments classifiable in those subheadings must have a water resistance (see ASTM designations D 3600-81 and D 3781-79) such that, under a head pressure of 600 millimeters, not more than 1.0 gram of water penetrates after two minutes when tested in accordance with AATCC Test Method 35-1985. This water resistance must be the result of a rubber or plastics application to the outer shell, lining or inner lining. There is no dispute at the heading level that the subject merchandise is described by the terms of heading 6201, HTSUS, or by the terms of subheading 6201.93, HTSUS. Instead, the dispute is solely over whether the subject merchandise is “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. Protestant argues that the subject merchandise is classified in subheading 6201.93.30, HTSUS, as water resistant garments, and provides its own laboratory testing results in support of this argument. Protestant argues that CBP should classify the subject merchandise in accordance with the results of the independent laboratories, whose results indicated that the subject merchandise was water resistant. Protestant further argues that the testing methods used by CBP were erroneous. In order to resolve the conflicting findings between the CBP laboratory reports and the independent laboratory reports that Protestant submitted, we find that HQ 951796, dated June 15, 1993, is instructive. There, CBP stated that “absent a conclusive showing that the method for determining water resistance used by Customs is in error, or that our results are erroneous, there is a presumption that the results obtained by Customs are correct.” See HQ 951796, citing Exxon Corp v. U.S., 462 F.Supp. 381, 81 Cust. Ct. 87, C.D. 4772 (1978). Furthermore, in HQ 955711, dated July 21, 1994, CBP held that “where there is a conflict between results obtained by a Customs laboratory and those obtained by private or independent laboratories, Customs will, in the absence of evidence that the testing procedure or methodology used by the Customs laboratory was flawed, accept the Customs laboratory report.” See HQ 955711. First, Protestant argues CBP error in the application of Additional U.S. Note 2 to Chapter 62, HTSUS. Protestant argues that in order for a garment to meet the “water resistance” test of Additional U.S. Note 2, it must meet two requirements. First, the garment must not allow more than one gram of water penetration, as measured under AATCC Method 25-1985. Secondly, the garment must have a rubber or plastics application on its outer shell, lining, or inner lining. With respect to the required lining, Protestant argues that “Style A” contains an application of 600 millimeters polyurethane, and that “Style B” has an application of Teflon, the commercial name for polytetrafluoroethylene (“PTFE”). Citing Note 1 to Chapter 39, HTSUS, which defines the term “plastics” as that term appears in the headings of Chapter 39, HTSUS, Protestant argues that both polyurethane and PTFE meet this definition and are specifically provided for in headings 3909 and 3904, HTSUS, respectively. Protestant also argues that prior CBP rulings have classified products that feature a “polyurethane plastic coating” as evidence that CBP considers polyurethane to be a plastic coating. Protestant also cites to prior rulings that describe PTFE as a plastic and argues that both sets of rulings support the notion that polyurethane and PTFE are the type of plastic application the subject merchandise requires to be water resistant. Protestant then argues that CBP’s laboratory report “failed entirely to note the presence of the acrylic coating on the jacket’s lining.” Protestant argues that this is in direct contrast to the multiple independent laboratory reports that it submitted. As a result, Protestant concludes that CBP’s laboratory results are erroneous. We do not dispute that polyurethane and PTFE are types of plastics. Furthermore, CBP’s laboratory specifically noted in a worksheet for its report that “no application was detected on the outer shell or the inner lining.” Thus, in direct contrast to Protestant’s arguments, CBP’s laboratory both tested for an application of plastic or rubber and noted its absence in its report. This lack of an application is, by itself, enough to disqualify the subject merchandise from classification as waterproof merchandise of subheading 6201.93.30, HTSUS. Therefore, Protestant’s differing test results regarding a rubber or plastics application are not, in themselves, direct evidence of CBP error. In addition, even if there were an application of polyurethane and PTFE on the subject merchandise, this, by itself, would not guarantee classification as “water resistant.” In fact, the rulings to which Protestant cites, which classify garments or fabric with these plastics application, did not classify their merchandise in headings that required water resistance. NY N140235, for example, classified its merchandise in subheading 6113.00.90, HTSUS, which requires that its merchandise be coated or impregnated with plastics, but not that it also be water resistant. See NY N140235; see also NY N081835. As a result, we find Protestant’s arguments unpersuasive. Next, Protestant argues that the water resistance test of Additional U.S. Note 2 to Chapter 62, HTSUS, must be undertaken pursuant to the AATCC 35 Methodology. Protestant argues that all of the independent laboratories that tested its merchandise used this methodology, in contrast to CBP’s laboratory, which used “CBP Laboratory Method 62-02” in its testing of the subject merchandise. Protestant argues that this difference in testing methodology led to the different results obtained by the CBP laboratory. Protestant further argues that its independent laboratories confirmed that where the samples’ quilting stitching is sealed with filament tape and such samples are then tested under the standard procedure, the subject garments easily passed the test for water resistance. Protestant argues that this suggests that CBP’s laboratory conducted its testing on samples that included quilted stitching, and as such, these samples were inappropriate samples to test for water resistance. Protestant also argues that the testing performed by HTSLLC used the AATCC 35 methodology and performed its testing consistently with prior CBP rulings. In particular, Protestant argues that in HQ 957061, dated March 30, 1995, CBP accepted the findings of an independent laboratory over its own laboratory results because the CBP laboratory had conducted the relevant waterproof test on a sample of fabric that included quilt stitching. Protestant argues that in HQ 957061, CBP concluded that in that circumstance, a sample without quilt stitching would likely have passed the test and merited classification under subheading 6201.93.30, HTSUS. Protestant argues that this approach is consistent with the objective of Step 6.5.2 of CBP Method 62-02, and that as a result, CBP should adhere to this approach in the present case as well. In response, we note that we consulted with CBP’s laboratory to obtain more information on which testing procedures the laboratory used, and how it applied this methodology to testing Protestant’s merchandise. Methods CBPL 62-02, CBPL 62-03, CBPL 62-05, CBPL 62-07, and CBPL 62-12 all refer to methods that are used by the CBP laboratories to analyze samples such as Protestant’s. These methods were all developed by CBP or by a consensus body such as the American Society of Testing Materials (“ASTM”) or the American Association of Textile Chemists and Colorists (“AATCC”). In particular, CBPL 62-03 and CBPL 62-07 refer to the identification of fibers by light microscopy by way of the same technology; the only difference in these methods is that they were promulgated by different organizations. CBPL 62-05 refers to the use of FT-IR to identify polymers, and CBPL 62-12 refers to the use of reflected light in photomicrography. In addition, CBPL 62-12 is used to determine whether a coating or application is present in the sample. With respect to CBPL 62-02 in particular, to which Protestant cites, CBP’s laboratory uses this method to determine water resistance for garments such as Protestant’s merchandise. This method is nearly identical to AATCC 35-1985 and codifies the method spelled out in Additional U.S. Note 2 to Chapter 62, HTSUS. Note 2 defines “water resistance” of subheading 6201.93.30, HTSUS, to require that under a head pressure of 600 millimeters, not more than 1.0 gram of water penetrates after two minutes. Prior CBP rulings have identified this standard as being the standard set forth by Additional U.S. Note 2 to Chapter 62, HTSUS and by AATCC Test Method 35-1985. See, e.g., HQ 951756, dated June 15, 1993. Thus, no significant difference exists between the methodology followed by CBP laboratories, and the methodology Protestant espouses. Furthermore, in HQ 957061, CBP stated that “the procedural requirements necessary for water resistant testing in accordance with Additional U.S Note 2, Chapter 62, HTSUS” are as follows: The test required by Note 2 is made on an eight inch (per side) square of fabric. If it is determined by the responsible Customs import specialist that there is a question whether a particular garment qualifies under Note 2 for classification as a "water resistant" garment and an eight inch square piece of fabric without seams (or quilting stitching) cannot be obtained from the garment, then Customs will accept and test a separate swatch of identical fabric. If no such fabric is submitted for Customs to test, the test will be performed on a representative section of fabric from the garment without regard to whether that fabric contains a seam (or quilting stitching). If the test is performed on more than one section of fabric and one section passes but another section does not, the garment will not be considered to have complied with the requirements of Note 2. See HQ 957061. In the present case, CBP’s laboratory retained the samples on which the tests were performed, and confirmed that these samples conformed to the tests required by HQ H957061. These samples were 8” x 8” and include swatches of both the outer shell and the inner lining of the subject garment. Furthermore, these swatches were not quilted and did not contain the garment’s stitching. As a result, we find Protestant’s arguments regarding the methodology of CBP’s laboratory unpersuasive. Protestant then argues that its merchandise underwent five rounds of testing by independent laboratories, and that each test concluded that the subject merchandise satisfied the water resistance test. As a result, Protestant argues that CBP’s laboratory result is the only instance of testing in this proceeding where the merchandise did not pass the water resistance test. Protestant argues that this is sufficient to question the results of the CBP laboratory, which used “CBP Laboratory Method 62-02” in its testing of the subject merchandise. In response, we note that conflicting results alone are not enough to establish the prima facie case required to rebut CBP’s presumption of correctness. None of the garments tested by Protestant were from the entry at issue. Furthermore, the initial results of one of the independent laboratories- HTSLLC- confirmed the findings of CBP’s laboratory. In addition, in its April 26, 2013, supplemental submission, Protestant admits that the first round of independent testing, performed on February 4, 2009, was done “in anticipation of the shipment,” and that the second and third rounds of testing, performed on January 25, 2010 and February 18, 2010, respectively, were completed in anticipation of this protest. Protestant states that the fourth round of testing, performed on October 18, 2010, was performed after importation, and that the final test, performed on May 3, 2011, was performed on jackets of Style A and Style B that were materially the same jackets as those imported. Specifically, Protestant argues that these last samples that were tested had been made using the same fabric and were manufactured by the same company as those in the protested entry. In light of these different rounds of testing, Protestant argues that it is not necessary to perform testing on garments from the entry at issue. Citing HQ 956258, dated August 4, 1994, Protestant argues that CBP has rejected the principle that “in the condition as imported” requires that the sample be tested from the actual importation at issue. Protestant further argues that in HQ 956258, CBP followed the position stated in HQ 951756, dated June 15, 1993, that at the import specialist’s discretion, the testing results for water resistance may be applied to other shipments of identical merchandise, and that in this context, “identical merchandise” means the same garments from the same supplier made from the same fabrics, and that “same supplier” means the same producer of the fabric. It is a well-established principle that goods must be classified in their condition as imported. See Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994); see also HQ H213695, dated March 31, 2014; HQ H197758, dated April 27, 2012; HQ H154040, dated June 9, 2011; HQ H135335, dated April 18, 2011. In HQ 951756, CBP stated that CBP laboratory results will be applied to subsequent shipments of the same goods to avoid the administrative burden of having to test garments from every single entry, but the laboratory results will only be applied when “so long as subsequent shipments of jackets contain identical merchandise from the same supplier using the same piece goods.” See HQ 951756. In the present case, three of Protestant’s tests were performed before the subject merchandise was entered. The first test, performed on February 4, 2009, was performed “in anticipation of the shipment,” but this test was performed a year and a half before the subject merchandise was entered on August 19, 2010. Likewise, the second and third tests, which Protestant argues were performed more than six months before the merchandise was entered. Even the fourth round of testing, which was the first test performed after the subject merchandise’s entry, was “performed in anticipation of the protest”- before the subject merchandise was even liquidated. Protestant has presented no evidence that these tests were performed on the same garments. There is no way to confirm that the materials tested were identical to the merchandise that was entered. Thus, there is no evidence that the subject merchandise is identical to the merchandise that was tested by Protestant, and the ability to apply laboratory results to identical merchandise as espoused by HQ 951756 is inapplicable here. Protestant’s testing is also in contrast to CBP’s testing, which was performed on a sample from the entry at issue. Thus, CBP’s testing is the only test performed on merchandise that we can be certain is at issue in this protest. For the last test performed by Protestant’s independent laboratory, Protestant relies on HQ 956258, and argues that these tests, which were performed nearly a year after the subject merchandise was entered, were performed on garments that were materially the same as those imported. However, Protestant’s citation to HQ 956258 fails to cite relevant language contained in that ruling. In HQ 956258, CBP stated: If it is determined by the responsible Customs import specialist that there is a question whether a particular garment qualifies under Note 2 for classification as a “water resistant” garment and an eight inch square piece of fabric without seams (or quilting stitching) cannot be obtained from the garment, then Customs will accept and test a separate swatch of identical fabric. See HQ 956258. Thus, an import specialist may only seek shipments of identical merchandise if a sample from the entry at issue is not available. In the present case, the CBP laboratory tested a garment from the shipment at issue. Thus, there is no need to obtain a sample from another shipment. Lastly, Protestant argues that, through a preponderance of evidence, it has met its burden of proof sufficiently to rebut the presumption of correctness that attaches to CBP’s laboratory results. In support of this argument, Protestant argues that it has corrected the types of problems that occurred in prior CBP rulings that prevented CBP from accepting the importers’ independent laboratory results. As an example, Protestant notes that in HQ 226606, dated April 28, 1998, CBP requested but did not receive copies of all the independent laboratory reports that supported the importer’s position. By contrast, Protestant argues that it has provided copies of all the independent laboratory results at issue, as well as ample evidence to support its position. Protestant also argues that the body of testing performed on the subject merchandise over a period of two years, coupled with the divergent result of the one CBP laboratory test, provides sufficient evidence to support its position. Thus, Protestant argues CBP should disregard its own laboratory results in favor of those of the independent laboratories. In response, we note that Protestant has neither shown that CBP’s laboratory results are erroneous, nor proven that its methodology or testing procedures were flawed by a preponderance of the evidence. To the contrary, conflicting results of independent laboratories are insufficient to overcome this presumption of correctness where these results are based on pre-production samples and post-importation samples whose similarity to the imported merchandise was not proven. When, as here, a CBP laboratory has performed its testing on a garment that was taken from the entry at issue and performed in accordance the testing methods proscribed by Additional U.S. Note 2 to Chapter 62, HTSUS, and prior CBP rulings, CBP will accept the results of its own laboratory. This conclusion is consistent with prior CBP rulings. See, e.g., HQ 957282, dated March 28, 1995 (“Customs cannot rely on outside reports, which may or may not utilize different testing methods and still remain consistent in its tariff classification. Additionally, generally Customs does not have any evidence that the merchandise tested by the outside laboratory is the same merchandise that was imported in to the U.S. Therefore, Customs must rely on its own laboratory analysis when determining the proper tariff classification of merchandise.”) See also HQ 958346, dated February 6, 1996; HQ 963748, dated November 20, 2000; HQ 965177, dated August 29, 2002. HOLDING: By application of GRI 1, the subject men’s garments are classified under heading 6201, HTSUS. They are specifically provided for under subheading 6201.93.35, HTSUS, which provides for: “Men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other.” The general, column one, rate of duty is 27.7% ad valorem. You are instructed to DENY the protest. 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 or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office 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