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HQ 086027


March 5, 1990

CLA-2 CO:R:C:G 086027 WAW

CATEGORY: CLASSIFICATION

TARIFF NO.: 6404.19.35

Mr. Jo Mammato
Jam, Inc.
P.O. Box 414
Whitestone, N.Y. 11357

RE: Reconsideration of New York Ruling Letter 846364 concerning the classification of a woman's textile slipper

Dear Mr. Mammato:

This letter is in response to your request for a reconsideration of New York Ruling Letter 846364, dated November 9, 1989, concerning the classification of a woman's textile slipper under the Harmonized Tariff Schedule of the United States (HTSUS). A sample of the merchandise was submitted along with your request.

FACTS:

The submitted sample is a woman's ballet style shoe. The shoe has an unlined textile (lycra) upper with an elasticized topline and a unit molded plastic bottom. The upper is stitched to a lip that protrudes around the side of the plastic bottom while the slipper is turned inside out. The inside sock lining of the slipper at the toe has not been stitched closed to allow for the insertion of a separate insole after importation. Based upon the component material breakdown provided by the importer, the shoe is comprised of over 10 percent by weight of rubber and plastics.

In New York Ruling Letter 846364, dated November 9, 1989, Customs held that the sample woman's textile slipper, in its condition as imported, was properly classifiable under subheading 6404.19.35, HTSUS, due to the fact that the sample was essentially a "completed and wearable footwear item."

In two letters dated November 17, 1989 and November 21, 1989, the importer asked for a reconsideration of New York Ruling Letter 846364. The importer maintains that the sample article should not be classified as "unfinished footwear" under subheading 6404.19.35, HTSUS, but rather, as "parts of footwear" under subheading 6406.10.60, HTSUS. The importer states that the article in its present condition cannot be sold to consumers, nor would any consumer consider purchasing the article. He asserts that the footwear in its present condition would be uncomfortable to the wearer, since it lacks any insole for cushioning. Moreover, he contends that the footwear would rapidly deteriorate and tear apart if worn in its present condition, since it has not been stitched closed on the inside of the sock lining at the toe.

ISSUE:

Whether the sample merchandise is classifiable as "unfinished footwear" or as "parts of footwear" for tariff purposes?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) set forth the manner in which merchandise is to be classified under the HTSUSA. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff and any relative section or chapter notes and, unless otherwise required, according to the remaining GRI's, taken in order.

General Rule of Interpretation 2(a) provides in pertinent part:

(a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article (emphasis provided).

Moreover, the Explanatory Notes to GRI 2(a), which constitute the official interpretation of the tariff at the international level, state the following:

(I) The first part of Rule 2(a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.

It is our position that the sample slipper is "unfinished footwear" based on the above-referenced tariff provisions. It is evident that all of the component parts characteristically associated with a slipper have already been included in the article in its imported condition. The upper and outer sole of the slipper are substantially complete. All that remains to be done to the shoe once it is imported into the United States is for the insole to be inserted and the front sock seam to be stitched closed. Overall, the article as imported looks and functions very much like a slipper, and although not complete, provides a total covering for the foot. Accordingly, it is Customs position that the sample merchandise is properly classifiable as "unfinished footwear" under subheading 6404.19.35, HTSUS, and not as "parts of footwear" under subheading 6406.10.60, HTSUS.

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, "unless excepted, every article of foreign origin (or its container, as provided in subsection (b) hereof) imported into the United States shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article." The primary purpose of the country of origin marking statute is to "mark goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." National Juice Products Association v. United States, 10 CIT 48, 628 F. Supp. 978 (1986), and United States v. Friedlaender & Co., 27 CCPA 297, 302, C.A.D. 104 (1940). The regulations implementing the requirements and exceptions to 19 U.S.C. 1304 are set forth in the Code of Federal Regulations, 19 CFR Part 134.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. The ultimate purchaser is defined in section 134.1(d), Customs Regulations (19 CFR 134.1(d)), as generally the last person in the United States who will receive the article in the form in which it was imported. If the imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. In such case, the article itself is excepted from marking pursuant to section 134.35, Customs Regulations (19 CFR 134.35), and only the outermost container of the imported article must be marked.

A substantial transformation occurs when articles lose their identity and become new articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 CCPA 267 at 270 (1940), National Juice Products Association v. United States, 10 CIT 48, 628 F. Supp. 978 (1986), Koru North America v. United States, 12 CIT ___, 701 F. Supp. 229 (CIT 1988).

In the instant case, the sample merchandise in its imported condition is a substantially complete slipper and has all of the physical characteristics of a slipper. Although the slipper will undergo additional operations in the United States, we have determined that it is essentially a completed and wearable footwear item. The imported article has the shape and form of a complete slipper as well as a closed bottom. Therefore, since the sample slipper will not be substantially transformed in the United States, the retail purchaser and not the United States manufacturer is the ultimate purchaser. Thus, the imported article must be individually marked to indicate China as the country of origin to the retail purchaser in the United States.

HOLDING:

The sample merchandise is classifiable as footwear, in which the upper's external surface is predominately of textile materials; in which the external surface of the outer sole is predominately rubber and/or plastics; which is other than athletic footwear; which is not designed to be a protection against water, oil, or cold or inclement weather; which does not have a foxing like band; and which is 10 percent or more by weight of rubber and/ or plastics, under subheading 6404.19.3500, HTSUSA. The applicable rate of duty is 37.5 percent ad valorem.

The sample slipper, described above, is not substantially transformed in the United States and must be individually marked to indicate the country of origin to the retail purchaser in the United States.

New York Ruling Letter 846364, dated November 9, 1989, is hereby affirmed.

Sincerely,

John Durant, Director

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