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HQ 950499


October 22, 1992

CLA-2 CO:R:C:T 950499 PR

CATEGORY: CLASSIFICATION

TARIFF NO.: 5810.92.0040

Area Director of Customs
John F. Kennedy International Airport
Building 178
Jamaica, New York 11430

RE: Request for Further Review of Protest 1001-1-001714, Dated March 1, 1991, Concerning the Classification of Certain Embroidered Emblems

Dear Sir:

This ruling is on the protest filed against your decision in the liquidation on December 14, 1990, of an entry of certain embroidered emblems. Our decision on the matter follows.

FACTS:

The imported merchandise, Champion emblems, are elongated horseshoe-shaped red, white, and blue, letter C's with most of the inner portions filled in. Each one consists of three layers of man-made fiber fabric, one woven and two nonwoven, which have been completely covered on both surfaces with colored stitching forming the decorative trademark symbol.

ISSUE:

Two interrelated issues are presented. The first issue is whether the imported emblems are considered to be embroidered for tariff purposes. In making that determination, the second issue must be considered--whether the emblems, if embroidery, are classifiable under the provision for embroidery without visible ground, in subheading 5810.10.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), or under the provision for other embroidered man-made fiber badges, emblems, and motifs, in subheading 5810.92.0040, HTSUSA.

LAW AND ANALYSIS:

Under the Tariff Schedules of the United States Annotated (TSUSA), the predecessor to the HTSUSA, it was Customs position that the subject merchandise was not considered to be embroidered. This is because embroidery, under the TSUSA, was stitching which, except for burnt-out lace, decorated a base fabric. If the base fabric was completely obscured or the stitching actually created the article, as opposed to decorating it, then that stitching was not embroidery. Numerous judicial decisions and dictionary definitions supported that position (e.g., see United States v. Field & Co., 10 Ct. Cust. Appls. 183, T.D. 38550 (1920), and ORR Ruling 75-163, Headquarters Ruling Letter (HRL) 040281, dated September 2, 1975).

However, the HTSUSA is an international based tariff and terms which had specific meanings under the TSUSA may, in the international context, have different meanings. The Harmonized Commodity Description and Coding System, Explanatory Notes, which are the official interpretation of the HTSUSA at the international level (for the 4 digit headings and the 6 digit subheadings), state:

Embroidery is obtained by working with embroidering threads on a pre-existing ground of * * * woven fabric * * * in order to produce an ornamental effect on that ground. * * * The ground fabric usually forms part of the completed embroidery, but in certain cases it is removed (e.g., chemically or by cutting) after being embroidered and only the design remains. (at pg. 808)

This language may be interpreted as implying that the TSUSA rule was being carried over to the HTSUSA. However, the Explanatory Notes go on to state:

The embroidery classified here comprises mainly the following three groups.

(I) EMBROIDERY WITHOUT VISIBLE GROUND

This is embroidery in which the ground fabric has been eliminated (e.g., by chemical process, by cutting out). Thus the material consists entirely of the embroidered designs * * * [I]t has no background * * *

(II) EMBROIDERY WITH THE GROUND RETAINED AFTER EMBROIDERING

This is embroidery in which the embroidering thread does not usually cover the whole of the ground fabric.

(III) APPLIQUE

This consists of a ground of textile fabric or felt on which are sewn, by embroidery or ordinary stitches: (B) Ornamental motifs * * *
All varieties of embroidery described remain within this heading when in the following forms:

(2) In the form of motifs, i.e., individual pieces of embroidered design serving no other function than to be incorporated or appliqued as elements of embroidery in, for example, underwear or articles of apparel or furnishings. They include badges, emblems, "flashes", initials, numbers, stars, national or sporting insignia, etc.

The Explanatory Notes make it quite clear that merchandise such as the subject emblems were intended to be classified as part of the "Applique Work" group of embroidery.

There is no ambiguity in the description of merchandise intended to be classified as "Embroidery without visible ground". It is "embroidery in which the ground fabric has been eliminated." In addition, it is apparent from the description for "Embroidery with the ground retained after embroidering" that the subject emblems were not intended to be included in that grouping.

The description for "Applique Work" embroidery explicitly describes the instant goods--"badges, emblems," and other similar articles and states that the design may be made by embroidery or ordinary stitches.

It is equally evident that the TSUSA concept of embroidery was not intended to be carried forward into the HTSUSA. If "Embroidery Without Visible Ground" only includes embroidery where the ground has been removed, and "Embroidery With The Ground Retained" describes embroidery where the "embroidering thread does not usually cover the whole of the ground fabric", then the only thing left for "Applique Work" embroidery to include (in regard to ornamental motifs) must, by default, be where the ground fabric has been retained but is no longer visible (unlike embroidery under the TSUSA). Based on the plain wording of the Explanatory Notes, no other reasonable conclusion exists. While a former tariff may be used to interpret a current tariff in order to resolve ambiguities, it may not be used to create them. Richard Nelson Co. v. United States, 71 Cust. Ct. 34, C.D. 4467 (1973).

The position has been advanced that the statutory subheading 5810.10.0000, which provides for "Embroidery without visible ground" is clear and unambiguous and the creation of an ambiguity in an otherwise clear and unambiguous statute is improper. United States v. Corning Glass Works, 66 CCPA 25, C.A.D. 1216 (1978). It follows that since subheading 5810.10.0000 describes the merchandise, we should not resort to extraneous aids, such as the Explanatory Notes, to determine the intended coverage of that provision.

We are of the opinion that the wording of the subheading in question is susceptible of varying interpretations and that clarification of the language is, therefore, warranted. Does that wording of that subheading require that the ground fabric must not be visible on the face side of the emblem but may be visible on the back side? Or, must the ground fabric be obscured on both sides? What if the ground fabric is visible on the sides, as is the case with the instant merchandise? May we cut the emblem and look for the ground fabric in cross section? How much of the ground fabric must be visible? In Customs view, the words "without visible ground", in the context used, are not clear and unambiguous. Accordingly, it is reasonable to resort to extraneous aids, in this instance, the Explanatory Notes, to determine the intended coverage of those words.

There are numerous judicial decisions which hold that the intention of the legislature is controlling in determining the interpretation and application of a statute. However, the HTSUS is somewhat unique. The international portion (the 4 digit headings and the 6 digit subheadings) were drafted by an international agency, the Customs Cooperation Council (CCC), consisting of representatives of over 90 nations. The HTSUS was presented to Congress for enactment as a package--to be enacted or rejected in its entirety. Unlike prior tariffs, there were no legislative hearings concerning the individual headings or subheadings contained therein. As a result, legislative history for the HTSUS is virtually nonexistent.

The Conference Report On H.R. 3, The Omnibus Trade And Competitiveness Act of 1988, states:

The Explanatory Notes constitute the Customs Cooperation Council's official interpretation of the Harmonized System. They provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system.

The Explanatory Notes were drafted subsequent to the preparation of the Harmonized System nomenclature itself, and will be modified from time to time by the CCC's Harmonized System Committee. Although generally indicative of proper interpretation of the various provisions of the Convention, the Explanatory Notes, like other similar publications of the Council, are not legally binding on contracting parties to the Convention. Thus, while they should be consulted for guidance, the Explanatory Notes should not be treated as dispositive.

Congressional Record, April 20, 1988, at page 2021.

To effectuate the above, and in an effort to promote international uniformity in the classification of merchandise, by memorandum of July 11, 1988, file 082185, this office advised our Area Director, New York Seaport, that we will adhere to the Explanatory Notes unless they are self contradictory, or where we believe that a strict application of them may be contrary to a legal note and/or enlarge the coverage of a HTSUSA heading or subheading. As a method of insuring adherence to this position and as a way of achieving uniformity in the classification of merchandise, the memorandum went on to state that the Explanatory Notes should be followed in the absence of specific advice from this office to the contrary. This office has issued no such advice concerning the Explanatory Notes for Heading 5810.

HOLDING:

Pursuant to the clear language of the Explanatory Notes, the subject emblems are properly classifiable under the provision for other man-made fiber embroidered badges, emblems, and motifs, in subheading 5810.92.0040, HTSUSA. Accordingly, the protest should be granted in full. A copy of this decision should be attached to the Customs Form 19 and mailed to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director

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