Application for Further Review of Protest No. 2704-18-100981; Classification of Boys’ Polyester Woven Jackets

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H312096 September 22, 2020 OT:RR:CTF:FTM H312096 MD CATEGORY: Classification TARIFF NO.: 6201.93.3000 Port Director, Service Port- Los Angeles U.S. Customs and Border Protection 301 E. Ocean Road, Suite 1400Long Beach, California 90802 Attn: Marchele Wilson, Import Specialist Re: Application for Further Review of Protest No. 2704-18-100981; Classification of Boys’ Polyester Woven Jackets Dear Port Director: The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 2704-18-100981, timely filed by Sandler, Travis, & Rosenberg P.A., on behalf of importer, KHQ Investment LLC (“KHQ” or “Protestant”), regarding U.S. Customs and Border Protection (“CBP”) tariff classification of two boys’ polyester woven jackets (Invoice Style Numbers: 2535B66005 and 2535B46805) under subheading 6201.93.3521, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). FACTS: The merchandise under protest concerns the classification of boys’ 100% polyester woven jackets, entered under subheading 6201.93.3000, HTSUSA, as water resistant, which has a duty rate of 7.1% ad valorem. The jackets were entered on August 14, 2016 in the following six colors: black, dark grey, crocodile, blue, eclipse, and red. On March 3, 2017, CBP issued a CBP Form 28, Request for Information, to Protestant, requesting a garment sample of the polyester woven jackets, which Protestant received on March 10, 2017. On April 6, 2017, Protestant provided a sample of their “Eclipse Short Bubble Jacket”, “size L[arge]”, “color black-01”, in accordance with the style collection requested by CBP. Upon receipt, the sample was sent to the CBP Los Angeles Laboratory (“CBP Laboratory”) to test the jacket for water resistance. On October 6, 2017, the CBP Laboratory issued report number LA20171016, which stated that the sample provided by Protestant did not pass American Association of Textile Chemists and Colorists (“AATCC”) Test Method 35-1985, water resistant test, as specified in the Additional U.S. Note 2 to Chapter 62, HTSUS. The report described the sample as boys’ black colored jacket labeled “shell: 100% polyester, lining: 100% polyester, size: S/P (4), RN #130323, Made in China”. The report also stated that this sample was a woven jacket, composed solely of polyester, with a 3-inch wide horizontal quilting stitches. Further, the CBP Laboratory noted that only three shell swatches and two sleeve-lining swatches could be tested due to “insufficient sample size”. Finally, the CBP Laboratory indicated that if it received additional samples, it would issue a supplemental report. On November 29, 2017, CBP issued CBP Form 29, Notice of Action Proposed, to Protestant, stating that the initial sample had been tested and had failed the water resistance test. Three additional samples were requested so that additional testing could occur. Protestant’s counsel contacted CBP to request an extension to the allotted time to provide these samples. This request was granted, and Protestant’s counsel submitted a fabric sample in “color blue-44” on January 10, 2018. CBP confirmed receipt of the fabric sample; however, on January 24, 2018, CBP issued a CBP Form 29, Notice of Action Taken, stating that the jacket did not pass the water resistance test, as specified in the Additional U.S. Note 2 to Chapter 62, HTSUS, because the additional samples were not provided on the date agreed. Subsequently, CBP notified the Protestant that its Notice of Action had been issued in error. CBP confirmed receipt of the fabric sample and stated that CBP was in the process of sending it to the laboratory for analysis. On February 13, 2018, CBP issued a final CBP Form 29, Notice of Action Taken, indicating that, “[t]he jacket did not pass the Water Resistance: Rain Test as specified in HTSUS Chapter 62. The swatch provided does not represent the jacket that was tested”. Therefore, the boys’ jackets in question were rate advanced under subheading 6201.93.3521, HTSUSA, which provides for boys’ jackets, with a duty rate of 27.7% ad valorem. In response to an inquiry by Protestant’s counsel, CBP indicated that the water resistance claim was denied because the fabric swatch, which had been tested (blue-44), was not the same color as the original garment sample (black-01). However, on February 19, 2018, in response to CBP’s supplemental request to test the blue-44 swatch of fabric, the CBP Laboratory issued laboratory report number LA20180304, which stated that the wholly polyester woven fabric swatch passed the water resistance test. The CBP Laboratory report described the sample as “navy in color” and “cut from a piece of fabric (29” x 28”)”. The report also stated that the sample was woven, composed wholly of polyester, and “passe[d] the AATCC 35 ‘Water resistance: Main test,” as specified within Additional Note 2, Chapter 62, HTSUS. However, no information as to whether or not the fabric swatch “matched” the originally tested jacket was included within the laboratory report. On July 21, 2020, CBP requested that the CBP Laboratory re-examine the jacket fabric and the fabric swatch provided by Protestant to determine whether there were any noticeable differences in materials, weight, yarn count, or yarn number between the two samples. On August 12, 2020, the CBP Laboratory provided test results, which included microscopic analyses, construction examinations, and spectroscopic analyses for both the jacket sample and the fabric swatch. The microscopic analyses identified that the shells and linings of both fabrics were made of “uniform fibers pink-green upon rotation, not soluble in [f]ormic or [s]ulfuric acid.” Furthermore, both construction examinations found the fabric consisted of “interlaced” and “interloped” yarns. Additionally, the spectroscopic analyses identified that both fabrics possessed a plastic coating; however, where the jacket’s coating was a polyacrylate, the swatch’s coating was a polyurethane. Based on these observations, the CBP Laboratory noted that its respective fabric was wholly made of polyester, which is distinguishable by its pink and green fiber coloring, was woven, and was coated by plastic. We acknowledge the difference in plastic coating, despite the notion that the application of plastic to the fabric is not directly at-issue. The failure of the original jacket sample was not due to improper application of plastic, but due to the seepage of water through quilt stitches. Since the CBP Laboratory was unable to cut swatches from the jacket sample that did not contain quilt stitching, the fabric swatch was requested. As such, at-issue in this ruling is the mutual identity of the jacket fabric and the fabric swatch. If the jacket fabric and fabric swatch are deemed identical, the issue will shift to an analysis of whether or not both are water resistant. ISSUE: Whether the subject boys’ jackets 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. 2704-18-100981 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. Protestant argues that the Port’s liquidation of the subject entry contradicts Headquarters Ruling Letter (“HQ”) 956258, dated August 4, 1995, specifically, and a number of rulings reiterating its position. See, e.g. HQ 085974, dated December 28, 1989; HQ 957061, dated March 30, 1995; HQ H187716, dated December 1, 2014; HQ H228175, dated December 1, 2014; and, HQ H194735, dated April 15, 2015. 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 2016 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: * * * 6201.93 Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: * * * Other: * * * Other: * * * Other: 6201.93.3000 Water resistant * * * Other: 6201.93.3521 Boys’ * * * 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. Specifically, the dispute is whether there were any “physical differences” between the original jacket tested and the fabric swatch submitted by Protestant’s counsel. An absence of any differences would allow the jacket to be classified as “water resistant”, as the fabric swatch passed the requisite water resistance test. Protestant argues that the subject merchandise is classified in subheading 6201.93.3000, HTSUSA, as water resistant garments, and provides additional laboratory testing results in support of its argument. Protestant asserts that CBP’s indication that “[t]he swatch provided d[id] not represent the jacket that was tested” on the sole basis that the “blue-44 color of the swatch was different than the black-01 color of the originally provided jacket sample” was improper. To support this assertion, Protestant turns to a number of CBP rulings, which have been instrumental in defining the term “water resistant” in relation to Additional U.S. Note 2 to Chapter 62, HTSUS. With regard to the testing required under Additional U.S. Note 2 to Chapter 62, HTSUS, in HQ 085974, dated December 28, 1989, CBP has previously presented the procedural requirements necessary for such water resistant testing and addressed the issue of whether a garment’s seams affect the test, 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. Furthermore, in HQ 956258, 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). Subsequently, in HQ 956258, CBP addressed the criteria for determining whether a swatch is an identical fabric, stating: 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 956258 also discussed a situation where an after-supplied swatch is a different color than that of the originally tested sample: A difference in color is indicative of the fabric coming from a different roll. However, we have received information from our Office of Laboratory and Scientific Services that a difference in color, by itself, should not significantly affect test results. Accordingly, a difference in color, by itself, should not be a justification to reject the test results of an after supplied swatch. HQ 085974 and HQ 956258 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. Furthermore, based on CBP’s position in HQ 085974 and HQ 956258, the rejection of swatches supplied should be based upon articulable differences such as material, weight, yarn count, and yarn number, but not color alone. See, e.g. HQ H187716, dated December 1, 2014; HQ H228175, dated December 1, 2014; and, HQ H194735, dated April 15, 2015. When the boys’ jacket submitted by Protestant was deemed unsuitable for the applicable water resistance test due to its lack of sufficient surface area without seams, CBP properly requested from Protestant an identical fabric swatch for testing to determine whether or not the product at-issue met the water resistance requirements enumerated in the Additional U.S. Note 2 to Chapter 62, HTSUS. See HQ 956258, dated August 4, 1994. However, while the requested fabric swatch initially passed the water resistance test, it was ultimately rejected because it was a different color than the originally tested jacket. On July 21, 2020, CBP requested that the CBP Laboratory re-examine the originally submitted jacket fabric and the subsequently submitted fabric swatch to determine whether both fabrics were identical. On August 12, 2020, the CBP Laboratory provided test results for both the original jacket fabric and the fabric swatch. The report indicates that both fabrics are wholly made of polyester fibers and contain substantially similar yarn counts. The CBP laboratory report referenced tests conducted on both the jacket and the fabric swatch. Each test included a microscopic analysis, a construction examination, general conclusions, and water resistance testing results. The microscopic analyses of both the jacket and the fabric swatch revealed that they exhibited pink and green colors and were insoluble with sulfuric acid; both of which are indications of polyester. The construction examinations revealed that both the jacket and fabric swatch had interlaced and interloped yarns, indicating that the each fabric was woven. Spectroscopic analyses of both the jacket and the fabric swatch revealed the presence of a rubber/plastic coating. Whereas the jacket possessed a coating of polyacrylate, the fabric swatch possessed a coating of polyurethane. As such, both general conclusions found that their respective sample was wholly constructed of polyester, woven, and possessed a plastic coating. Further analysis of each sample found that the jacket and fabric swatch possessed a significantly similar average yarn count. Whereas the jacket had an average of 164 yarns per inch in the warp and an average of 135 yarns per inch in the filling, the fabric swatch possessed an average of 169 yarns per inch in the warp and an average of 133 yarns per inch in the filling. When combined with information pertaining to fabric composition and construction, a substantially similar average yarn count between two pieces of fabric supports the conclusion that both pieces were manufactured at the same facility, under the same conditions, at roughly the same time. With this information, we find that the originally supplied jacket fabric and the subsequently provided fabric swatch are identical within the definition provided by HQ 956258. While the average yarn counts and fiber contents of the jacket sample and fabric swatch are identical, the CBP Laboratory report indicated that the type of plastic used to coat each fabric are marginally different. Whereas the jacket fabric is coated by polyacrylate, the fabric swatch is coated with polyurethane. Both polyacrylate and polyurethane share a similar chemical composition and are commonly interchanged to coat fabrics for water resistance. Guidance from CBP rulings provides that an identity analysis should point to “articulateable [differences] – e.g. different materials, weight, yarn count, yarn number, etc.” See HQ 956258, dated August 4, 1994. We find the usage of a functionally identical plastic compound to be an inconsequential difference in our identity analysis. Having established that the jacket and fabric swatch are sufficiently “identical” as per the criteria of HQ 956258, we now turn to the two-part test for water resistance as provided by the HTSUS. First, a garment must have an application of rubber or plastics; second, the garment must pass a water resistance test, enumerated in Additional U.S. Note 2 to Chapter 62, HTSUS, which calls for a garment to have no more than one gram of water penetration when subjected to a water pressure of 600mm for two minutes. The fabric swatch submitted by Protestant meets both criteria for water resistance. As established in the August 12, 2020 report from the CBP Laboratory, the fabric swatch possesses a plastic coating, thereby satisfying the first prong of the two-part water resistance test. The same CBP Laboratory report also establishes that the fabric swatch passed the applicable water resistance test as enumerated in Additional U.S. Note 2 to Chapter 62, HTSUS. Therefore, in accordance with the above, and based on CBP Laboratory’s reports, we find that the subject boys’ jackets (Invoice Style Numbers: 2535B66005 and 2535B46805) are water resistant and are properly classified in subheading 6201.93.3000, HTSUSA. HOLDING: By application of GRI 1, the subject boys’ jackets are classified under subheading 6201.93.3000, HTSUSA, 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.” The general, column one, rate of duty is 7.1% ad valorem. You are instructed to GRANT 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 re-liquidation 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 of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution. Sincerely, For Craig T. Clark, Director Commercial and Trade Facilitation Division