Tariff classification of Ladies Puffer Jackets; Protest No. 2704-11-102566

HQ H228175 December 1, 2014 CLA-2 OT:RR:CTF:TCM H228175 AMM CATEGORY: Classification TARIFF NO.: 6202.93.45, 6202.93.50 Port Director of Service Port – Los Angeles U.S. Customs and Border Protection 301 E. Ocean Blvd. Suite 1400 Long Beach, CA 90802 Attn: Renee Orsat RE: Tariff classification of Ladies Puffer Jackets; Protest No. 2704-11-102566 Dear Port Director: This letter is in reply to protest, and application for further review (AFR), number 2704-11-102566, dated November 11, 2011, filed on behalf of 24K Style LLC (Protestant), against U.S. Customs and Border Protection’s (CBP) reclassification and subsequent liquidation by the Port of Los Angeles (the Port) of three entries of ladies puffer jackets. FACTS: This protest pertains to three entries of ladies puffer jackets. The entries took place between July 27, 2010 and August 29, 2010. All three entries were liquidated on June 24, 2011. The Port denied the Protest and AFR on February 15, 2012. Protestant requested that CBP void the denial of Protest No. 2704-11-102566, and set aside the denial of the AFR, per 19 U.S.C. §1515(c), on March 6, 2012. That request was granted. Protestant objected to the Port’s classification of twenty-three (23) types of ladies puffer jackets, under subheading 6202.93.50, HTSUS, which provides in pertinent part, for: “Women's or girls' … anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other”. Protestant asserts that the merchandise is properly classified under subheading 6202.93.45, HTSUS, which provides, in pertinent part, for: “Women's or girls' … anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Water resistant”. Certain products were included in more than one entry. Protestant indicated that the jackets can be divided into four different styles, based on the outer shell fabric used; specifically, Style Nos. KH17, KH18, KH19, and KH38. Protestant also indicated that styles KH17, KH18, and KH38 use the same outer shell fabric, identified as “Polyester 290T,” and that Style No. KH19 uses the outer shell fabric identified as “Polyester 228T.” With regard to jackets identified by Style No. KH18, contained in Entry Nos. 769-5 and 792-7, the CBP Laboratory determined that the sample of fabric taken directly from the jacket was “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. See CBP Lab Report No. LA20101330, dated October 1, 2010. As a result, the Port had already re-liquidated the relevant merchandise under the classification Protestant asserted, namely subheading 6202.93.45, HTSUS. With regard to jackets identified by Style No. KH38, the CBP Laboratory determined that a sample of fabric taken directly from the jacket was not “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. See CBP Lab Report No. LA20101331, dated October 5, 2010. With regard to jackets identified by Style Nos. KH17 and KH19, no samples were submitted or requested, and no testing was performed. Protestant’s request to set aside the denial of AFR was granted because Protestant satisfied the requirements of 19 C.F.R. §174.24(c), arguing that the jackets identified by Style Nos. KH17 and KH19 are water resistant within the definition contained in Additional U.S. Note 2 to Chapter 62, HTSUS. After the denial of AFR was set aside, CBP requested that Protestant submit samples of jackets and swatches for testing. Protestant submitted swatches to CBP for testing in accordance with Additional U.S. Note 2 to Chapter 62, HTSUS, but did not submit any jackets for comparison. The swatches submitted are asserted to be identical to the fabric used in the jackets at issue, but are not taken directly from a sample jacket. CBP tested 3 swatches of each fabric, and determined that they met the water resistance requirements specified in Additional U.S. Note 2 to Chapter 62, HTSUS. See CBP Lab Report No. NY20121913, dated November 14, 2012 (KH17); CBP Lab Report No. NY20121914, dated November 14, 2012 (KH19). ISSUE: Whether the instant ladies puffer jackets (specifically, Product Nos. F6KH18DMDE, F6KH38DMDE, F6KH38DMMXDE, F6KH18DMMXDE, F6KH18DMCODE, F6KH18DMADE, F8KH18DMADE, F8KH38DMDE, F6KH38DMRSDE, F6KH38BEMXDE, F8KH38DMADE, F8KH38BEADE, F5KH38DMDE, F6KH19DMDE, F8KH19DMDE, F6KH19DMADE, F6KH17DMDE, F8KH17DMDE, F6KH17DMMXDE, F5KH17MJDE, F6KH17MJDE, F6KH17DMADE, and F6KH38BEDE), imported on Entry Nos. 769-5, 792-7, and 348-8, are classified as “water resistant” under subheading 6202.93.50, HTSUS, or under subheading 6202.93.45, HTSUS. LAW AND ANALYSIS: Initially we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification and the rate and amount of duties chargeable. The protest was timely filed on November 8, 2011, within 180 days of liquidation, pursuant to 19 U.S.C. §1514(c)(3). Further review of Protest 2704-11-102566 was properly accorded to protestant pursuant to 19 C.F.R. §174.24. Specifically, in accordance with Section 174.24(c), the decision against which the protest was filed is alleged to involve matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling. Protestant asserts that the merchandise at issue is water resistant within definition contained in Additional U.S. Note 2 to Chapter 62, HTSUS. At the time the AFR was denied, CBP had no test data to refute Protestant’s assertion. 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 2010 HTSUS provisions under consideration are: 6202 Women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204 Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): 6202.93 Of man-made fibers: Other: Other: Other: 6202.93.45 Water resistant ----------------------------------- 6202.93.50 Other Additional U.S. Note 2 to Chapter 62, HTSUS, states, in pertinent part: For the purposes of subheading[] … 6202.93.45 …, 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 that the instant merchandise is classified in heading 6202, HTSUS. Rather, the dispute is the proper 8-digit national tariff rate that is applicable. As a result, GRI 6 applies. GRI 6 states: For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires. A. Style No. KH18 With regard to jackets identified by Style No. KH18 (specifically, Product Nos. F6KH18DMDE, F6KH18DMMXDE, F6KH18DMCODE, F6KH18DMADE, and F8KH18DMADE, contained in Entry Nos. 769-5 and 792-7), the CBP Laboratory determined that the sample of fabric taken directly from the jacket was “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. See CBP Lab Report No. LA20101330. Therefore, CBP agrees with Protestant that the above-identified ladies puffer jackets are properly classified as “water-resistant” under subheading 6202.93.45, HTSUS. We note that the Port had already re-liquidated the relevant merchandise under the classification Protestant asserted. B. Style No. KH38 With regard to jackets identified by Style No. KH38 (specifically, Product Nos. F6KH38DMDE, F6KH38DMMXDE, F8KH38DMDE, F6KH38DMRSDE, F6KH38BEMXDE, F8KH38DMADE, F8KH38BEADE, F5KH38DMDE, and F6KH38BEDE, contained in Entry Nos. 348-8, 769-5, and 792-7), the CBP Laboratory determined that a sample of fabric taken directly from the jacket was not “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS. See CBP Lab Report No. LA20101331. While Protestant asserts that jackets of Style Nos. KH18 and KH38 use the same “Polyester 290T” outer shell fabric, testing on fabric taken from the actual jackets indicates that KH38 failed the water resistance test. After the denial of AFR was set aside, CBP requested that Protestant submit samples of jackets and swatches for testing. Protestant submitted swatches to CBP for testing in accordance with Additional U.S. Note 2 to Chapter 62, HTSUS, but did not submit any jackets for comparison. CBP enjoys a statutory presumption of correctness. See 28 U.S.C. §2639(a)(1). Thus, an importer has the burden to prove by a preponderance of the evidence that a Customs decision was incorrect. Ford Motor Co. v. United States, 157 F.3d, at 855; American Sporting Goods v. United States, 259 F. Supp. 2d 1302. At the time of entry, CBP determined that the jackets of Style No. KH38 did not meet the water resistance test of Additional U.S. Note 2 to Chapter 62, based on data obtained from the CBP Laboratory. As such, CBP determined that these goods were properly classified under subheading 6202.93.50, HTSUS, as other than water resistant. Protestant has provided no evidence to rebut CBP’s statutory presumption of correctness. While a swatch was provided for testing, no jacket was made available for comparison. As such, all styles of jackets which include the code KP38 cannot be considered “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS, and are properly classified under heading 6202, HTSUS, specifically under subheading 6202.93.50, HTSUS. The above-identified merchandise is properly classified under heading 6202, HTSUS, specifically under subheading 6202.93.50, which provides for: “Women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other”. C. Style Nos. KH17 and KH 19 With regard to jackets identified by Style Nos. KH17 and KH19 (specifically, Product Nos. F6KH19DMDE, F8KH19DMDE, F6KH19DMADE, F6KH17DMDE, F8KH17DMDE, F6KH17DMMXDE, F5KH17MJDE, F6KH17MJDE, and F6KH17DMADE, contained on Entry No. 348-8), the Port determined that they were classified under subheading 6202.93.50, HTSUS. CBP did not collect samples of the merchandise at issue from Entry No. 348-8. With regard to the testing required under Additional U.S. Note 2 to Chapter 62, HTSUS, CBP has previously stated: 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 085974, dated December 28, 1989. Furthermore, in HQ 965258, dated August 4, 1994, CBP stated: It is our view that any time a garment does not contain a sufficient area of fabric to allow testing for water resistance without including a seam or quilting stitches, an attempt should be made to obtain a swatch of identical fabric for testing. If such a swatch is not furnished, then the fabric which contains a plastics application should be tested in its condition as found in the garment (including seams, but minus any padding if the fabric is quilted). * * * No headquarters administrative ruling, of which we are aware, has set out definitive criteria for determining whether a swatch meets the “identical fabric” standard. Any such criteria must, of course, be reasonable. It appears to this office that it would be unreasonable to reject a swatch solely because that swatch was not produced at the same time as the original fabric. In this regard, we note that even samples taken from the same roll fabric may have different test results. The rejection of swatches supplied after importation should be based on a difference in the physical characteristics between the fabric(s) comprising the subject garments and the submitted swatch(es). That difference should be articulateable—e.g. different materials, weight, yarn count, yarn number, etc. * * * HQ 965258 and HQ 085974 require that, upon request, the Protestant submit swatches of “identical fabric” to CBP for testing when the garment does not contain an eight-inch square section without seams. “The rejection of swatches supplied after importation should be based on a difference in the physical characteristics between the fabric(s) comprising the subject garments and the submitted swatche(s).” See HQ 965258. After the denial of AFR was set aside, CBP requested that Protestant submit samples of jackets and swatches for testing. Protestant submitted swatches but did not submit any jackets for comparison. Because Protestant did not submit samples of the jackets for comparison, it is impossible to determine whether the swatches of fabric are identical to the instant merchandise. As such, CBP rejects the swatches and the data obtained from that testing. See HQ 965258. We note that Protestant provided a declaration from the jacket manufacturer asserting that the swatches supplied were the same fabric used in the subject garments. The Federal Rules of Evidence define “hearsay” as “a statement, other than one made by the declarant while testifying at the trial or heading, offered in evidence to prove the truth of the matter asserted.” Fed. R. Evid. 801(c). The term “statement” includes a written assertion. Fed. R. Evid. 801(a). Several exceptions to the hearsay rule are given in Fed. R. Evid. 803, but none of them are applicable to the declaration provided by the Protestant. The declaration provided by the Protestant is not dated, and was submitted more than two years after the entry of the subject merchandise. See HQ 229556, dated September 17, 2002; United States v. Baar & Beards, Inc., 46 CCPA 92 (1959); Fed. R. Evid. 803(6)(A). Furthermore, it is not a document kept in the course of a regularly conducted activity of the business. See Fed. R. Evid. 803(6)(B). Instead, it is a document created in response to CBP’s request that Protestant provide samples of jackets for examination. See Fed. R. Evid. 803(6)(C). The declaration is not a record of a regularly conducted activity, and does not satisfy any of the hearsay exceptions of Fed. R. Evid. 803. It is an unsworn statement, produced years after the transactions at issue, created in response to a request for samples. CBP declines to accept it as evidence that the swatches supplied by the Protestant were the same fabric used in the subject garments. With regard to the jackets of Style No. KH17, made with outer shell fabric “Polyester 290T,” CBP has conflicting data. While Protestant asserts that jackets of Style Nos. KH18 and KH38 also use the “Polyester 290T” fabric, testing on fabric taken from the actual jackets indicates that KH18 passed while KH38 failed the water resistance test. As such, there is no indication that jackets of Style No. KH17 would have necessarily passed the water resistance test, given the failing results reported on CBP Lab Report No. LA20101331 (Style No. KH38). Likewise, there is no reason to extend the passing results of CBP Lab Report No. LA20101330 (Style No. KH18) to jackets of Style No. KH17. With regard to the jackets of Style No. KH19, made with outer shell fabric “Polyester 228T,” CBP has no data. No sample was acquired by the Port for testing, and no independent test data was submitted by Protestant. A swatch of fabric was submitted for testing, and the test was performed, but no jacket was submitted for comparison. At the time of entry, CBP determined that there was a question as to whether the jackets of Style Nos. KH17 and KH19 met the water resistance test of Additional U.S. Note 2 to Chapter 62. Furthermore, CBP determined that these goods were properly classified under subheading 6202.93.50, HTSUS, as other than water resistant. Protestant has provided no evidence that the jackets at issue are “water resistant” within the meaning of the HTSUS. While a swatch was provided for testing, no jacket was made available for comparison. See HQ 965258. As such, all styles of jackets which include the codes KP17 and KH19, cannot be considered “water resistant” within the meaning of Additional U.S. Note 2 to Chapter 62, HTSUS, and are properly classified under heading 6202, HTSUS, specifically under subheading 6202.93.50, HTSUS. The instant merchandise is properly classified under heading 6202, HTSUS, specifically under subheading 6202.93.50, which provides for: “Women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other”. HOLDING: By application of GRI 6, the ladies puffer jackets which use the Style Nos. KH17, KH19, and KH38 (specifically, Product Nos. F6KH38DMDE, F6KH38DMMXDE, F8KH38DMDE, F6KH38DMRSDE, F6KH38BEMXDE, F8KH38DMADE, F8KH38BEADE, F5KH38DMDE, F6KH19DMDE, F8KH19DMDE, F6KH19DMADE, F6KH17DMDE, F8KH17DMDE, F6KH17DMMXDE, F5KH17MJDE, F6KH17MJDE, F6KH17DMADE, and F6KH38BEDE), imported on Entry Nos. 769-5, 792-7, and 348-8), which are the subject of Protest No. 2704-11-102566, are classified under heading 6202, HTSUS, specifically under subheading 6202.93.50, HTSUS, which provides for “Women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other”. The column one, general rate of duty is 27.7% ad valorem. By application of GRI 6, the ladies puffer jackets which uses Style No. KH18 (specifically, Product Nos. F6KH18DMDE, F6KH18DMMXDE, F6KH18DMCODE, F6KH18DMADE, and F8KH18DMADE), imported on Entry Nos. 769-5 and 792-7, which are the subject of Protest No. 2701-11-102566, are classified under heading 6202, HTSUS, specifically under subheading 6202.93.45, HTSUS, which provides for “Women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Water resistant”. The column one, general rate of duty is 7.1% ad valorem. You are instructed to DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a partial allowance. 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 of 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