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HQ 087648


February 7, 1991

CLA-2 CO:R:C:T 087648 DRR

CATEGORY: CLASSIFICATION

TARIFF NO.: 5810.91.0010

Ms. Frances Jones
J. Ovington Fabrics Ltd.
2142 Marne St.
Victoria, British Columbia, Canada V854J9

RE: Classification and country of origin of fabrics woven and embroidered in India and dyed in Canada

Dear Ms. Jones:

This is in response to your letter of June 20, 1990, in which you requested a tariff classification ruling, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), for two samples of fabric.

FACTS:

The merchandise at issue is represented by two sample swatches of 100 percent handloomed cotton fabric embroidered with 100 percent wool yarn. The samples weigh 241 grams per square meter. The fabric is loomed and embroidered in India according to designs which originate in Canada and exported to Canada where some will be sold as imported and some will be dyed to order. The undyed fabric costs US $11.40 per meter, the cost of the dyeing averages US $18.00 per meter. The fabric is intended to be used in upholstery.

ISSUE:

What is the classification of the fabric in question.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUSA is in accordance with the General Rules of Interpretation (GRI), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any
relative section or chapter notes. Heading 5810, HTSUSA, provides for embroidery in the piece, in strips or in motifs. Subheading 5810.91.0010, HTSUSA, provides for embroidery in the piece, in strips or in motifs, other embroidery, of cotton weighing over 200 g/m. According to additional Note 1, Chapter 58, embroidery in the piece of subheading 5810.91 is dutiable at 8.4 percent ad valorem, but not less than the rate of duty that would apply if the fabric were not embroidered. If unembroidered, the undyed sample would be classifiable in subheading 5209.19.00, HTSUSA. The dyed sample would be classifiable under subheading 5209.39.00, HTSUSA. If the dyed sample is certified handloomed, it would be classifiable under subheading 5209.31.3000, HTSUSA.

Section 12.130, Customs Regulations (19 CFR 12.130, copy enclosed), provides, in pertinent part, that a textile or textile product which consists of materials produced or derived from, or processed in, more than one foreign territory or country, or insular possession of the U.S., shall be a product of that foreign territory or country, or insular possession where it last underwent a substantial transformation. A textile or textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce. A new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in commercial designation or identity, fundamental character or commercial use. The criteria used to determine whether a substantial transformation has taken place include the physical change in the article, the time, complexity and value added by the operation. Section 12.130 (e)(2)(v), Customs Regulations states that the dyeing and/or printing of yarn or fabric is insufficient processing to constitute a substantial transformation.

With regard to the eligibility of the fabric for special tariff treatment under the United States-Canada Free Trade Agreement Implementation Act of 1988, the dyeing of the fabric in Canada does not result in a change of classification under General Note 3(c)(vii)(R)(11), HTSUSA. Accordingly the fabric is subject to the rates of duty in the "General" subcolumn.

HOLDING:

The fabrics in question are classified under subheading 5810.91.0010, HTSUSA. The undyed fabric is dutiable at a rate of 8.4 percent ad valorem. The dyed fabric, if not certified handloomed, is dutiable at a rate of 8.9 percent ad valorem. In either condition, the fabric is subject to textile visa category 229. If the fabric is handloomed and hand embroidered and certified as exempt, it would be dutiable at a rate of 8.4 percent ad valorem, even if dyed. Shipments not accompanied by the exemption certificate would require a normal circular visa and may be subject to quota restraint levels. The country of origin of both the dyed and undyed fabric is India.

Your question as to the proper marking of the fabric has been referred to our Value and Marking Branch. They will respond to you under separate cover. Your question about the procedures applicable while the fabric is in Canada should be addressed to Canadian Customs.

Due to the changeable nature of the statistical annotation and the restraint (quota/visa) categories applicable to textile merchandise, you should contact the local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Sincerely,

John Durant, Director

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