Application for Further Review of Protest No. 0401-12-100056; Classification of a non-woven tote bag

HQ H233354 December 21, 2012 CLA-2 OT:RR:CTF:TCM H233354 TNA CATEGORY: Classification TARIFF NO.: 4202.92.30 Port Director, Service Port-Boston U.S. Customs and Border Protection 10 Causeway Street - Room 603 Boston, MA 02222 Attn: Charlene Earle, Import Specialist Re: Application for Further Review of Protest No. 0401-12-100056; Classification of a non-woven tote bag Dear Port Director: The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 0401-12-100056, timely filed on April 16, 2012, on behalf of Bagmakers, Inc. (“Bagmakers” or “Protestant”). The AFR concerns the classification of a non-woven tote bag under the Harmonized Tariff Schedule of the United States (“HTSUS”). FACTS: The subject merchandise consists of a rectangular-shaped bag that measures approximately nine inches in width by six inches in height by approximately two inches in depth. It has an outer surface of non-woven polypropylene textile material. The bag has two short handles. It also has a three-sided zipper closure and opens like a book. One side of the bag’s interior is fitted with two elastic straps and has two zippered mesh pockets. The other side has three elastic straps and one patch pocket with a hook-and-loop closure. The outside of the bag also has a storage compartment with a hook-and-loop closure. A sample of the subject merchandise was received and examined by this office. The sample is black, except for a red patch that contains a white “CVS/Caremark” logo on the front exterior of the bag. The bags also contain a thin layer of plastic foam between the lining and the outer surface material; its width is only a fraction of a millimeter. The subject merchandise entered on December 28, 2010, under subheading 4202.92.30, HTSUS, as a travel bag. The port liquidated the merchandise on November 14, 2011, as entered. The importer filed this protest and AFR on April 16, 2012, claiming duty free treatment under subheading 9902.40.01, HTSUS, which provides such treatment for “Shopping bags with an outer surface of spun bonded polypropylene fabric or nonwoven polypropylene fabric (provided for in subheading 4202.92.30).” In the alternative, Protestant claims classification in subheading 4202.92.08, HTSUS, as an insulated food and beverage bag. ISSUES: Whether the subject merchandise is classified as an “insulated food or beverage bags” or a “travel, sports and similar bag” of subheading 4202.92, HTSUS? Whether the subject merchandise should receive duty free treatment under subheading 9902.40.01, 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 for entries made on or after December 18, 2004. (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. 0401-12-100056 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because the protested decision is alleged to involve questions of law or fact that have not been ruled upon by the Commissioner of Customs or his designee, or by the Customs court. Specifically, the Protestant argues that the question of whether the subject merchandise should receive duty-free treatment under subheading 9902.40.01, HTSUS, has not yet been decided. 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 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 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 headings under consideration are the following: 4202 Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Other: 4202.92 With outer surface of sheeting of plastic or of textile materials: Insulated food or beverage bags: With outer surface of textile materials: 4202.92.08 Other * * * Travel, sports and similar bags: With outer surface of textile materials: 4202.92.30 Other * * * 9902.40.01 Shopping bags with an outer surface of spun bonded polypropylene fabric or nonwoven polypropylene fabric (provided for in subheading 4202.92.30) Additional U.S. Note 1 to Chapter 42, HTSUS, states, in pertinent part, the following: For the purposes of heading 4202, the expression “travel, sports and similar bags” means goods, other than those falling in subheadings 4202.11 through 4202.39, of a kind designed for carrying clothing and other personal effects during travel, including backpacks and shopping bags of this heading, but does not include binocular cases, camera cases, musical instrument cases, bottle cases and similar containers. In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, 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 HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The EN to heading 4202, HTSUS, provides, in pertinent part, the following: The expression “insulated food or beverage bags” covers reusable insulated bags used to maintain the temperature of foods and beverages during transport or temporary storage. We begin by noting that it is not in dispute that the subject merchandise is described by the terms of heading 4202, HTSUS, or that it is classified in subheading 4202.92, HTSUS. To the contrary, the dispute is at the 8-digit level. Protestant argues that based on an in-depth review of prior CBP rulings, the subject bag should be classified as an “insulated food or beverage bag with an outer surface of man-made fibers” of subheading 4202.92.08, HTSUS. In support of this argument, Protestant cites NY N096825, dated April 1, 2010. In response, we note that the “insulated food or beverage bags” of subheading 4202.92.08, HTSUS, are bags that are insulated with the intention of maintaining the temperature of their contents as they are transported or stored. See EN 42.02. Furthermore, the merchandise that CBP has previously classified “insulated food or beverage bags” of subheading 4202.92.08, HTSUS, has included merchandise such as a cooler designed to hold 108 twelve-ounce cans while maintaining the temperature of those beverages. See, e.g., HQ H018503, dated January 31, 2008. By contrast, the subject bags, while they contain a thin layer of foam between the lining and the outer surface material, are not insulated in the same manner as the cooler or HQ H019503, for example. The foam in the subject bags is a very thin layer of plastic that is more apt to provide an extra layer of padding than to allow food or beverages to remain hot or cold. Thus, this padding can also be distinguished from the cooler bag of NY N096825, to which Protestant cites, in that the cooler bag of NY N096825 contained high density closed cell foam insulation between the outer surface and the interior lining. Furthermore, the subject bag is not waterproof or water resistant. As such, it is unlikely to be used to transport cold food or beverages. As a result, we find that it does not meet the terms of subheading 4202.92.08, HTSUS, and we examine alternate classifications. Subheading 4202.92.30, HTSUS, provides for other types of “travel, sports and similar bags.” Additional U.S. Note 1 to Chapter 42, HTSUS, defines travel and sports bags of heading 4202, HTSUS, as being “of the kind designed for carrying clothing and other personal effects during travel, including backpacks and shopping bags of this heading.” Toiletry bags have traditionally been one of the types of travel bags that CBP has classified in this subheading. These bags are characterized by their smaller size, short handles, and zipper closures. Many also contain smaller compartments inside or outside of the bags. See, e.g., NY N024854, dated April 8, 2008; NY N018773, dated October 30, 2007; NY N006249, dated March 1, 2007; NY J81832, dated March 7, 2003. The subject merchandise is designed similarly to these toiletry bags. It is of a small size and has a rectangular shape. It has a zipper that encircles most of the bag. It also has short handles and contains both inner and outer storage compartments. In short, it is well-suited for carrying toiletries and other personal effects during travel. As such, we find that it meets the terms of subheading 4202.92.30, HTSUS, as “Travel… bags: With outer surface of textile materials.” Protestant also argues that the subject merchandise qualifies for duty free treatment of subheading 9902.40.01, HTSUS, which grants duty-free treatment to “Shopping bags with an outer surface of spun bonded polypropylene fabric or nonwoven polypropylene fabric (provided for in subheading 4202.92.30).” Thus, we note that the subject merchandise is only being considered for duty-free treatment under this provision because we have already found that its primary classification is in subheading 4202.92.30, HTSUS. Furthermore, it is not in dispute that the subject bags contain an outer surface of spun bonded polypropylene fabric or nonwoven polypropylene fabric, as required by subheading 9902.40.01, HTSUS. As a result, we now examine whether the subject merchandise is a shopping bag. Numerous CBP rulings have classified shopping bags. Such bags have been characterized by their open tops, long handles that can be used over a person’s shoulder, and reinforced side and bottom panels. Furthermore, these bags were designed for repetitive use in carrying heavier items such as groceries. See, e.g., NY N202558, dated February 29, 2012; NY N184918, dated October 14, 2011; NY N164841, dated June 7, 2011; NY N158076, dated April 22, 2011; NY N145719, dated February 25, 2011; NY N138995, dated January 7, 2011. By contrast, the subject merchandise is a bag without an open top; its zipper completely closes it. Its shorter handles and smaller size would also make it difficult to use to carry larger, heavier, items such as groceries. It also does not contain the type of reinforced panels that characterized the shopping bags of the rulings cited above. As a result, we find that the subject merchandise cannot be classified as a shopping bag. As such, it does not meet the terms of subheading 9902.40.01, HTSUS, and cannot receive duty-free treatment under this provision. HOLDING: By application of GRI 1, the subject bag is classified in heading 4202, HTSUS. By application of GRI 6, it is specifically in subheading 4202.92.30, which provides for “Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other.” The column one, general rate of duty is 17.6% ad valorem. Furthermore, the subject merchandise does not meet the terms of subheading 9902.40.01, HTSUS, and cannot receive duty-free treatment under this provision. 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