HQ 0952369 - Internal Advice Request 29/92; Classification of cotton gauze sponges; Section XI, Note 7, made up or not made up; Explanatory Notes for made up; 6307, HTSUSA v. 5208, HTSUSA - United States International Trade Commision Rulings

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HQ 952369

December 17, 1993

CLA-2 CO:R:C:T 952369 CMR

CATEGORY: CLASSIFICATION

TARIFF NO: 5208.21.6090

U.S. Customs Service
District Director
610 South Canal Street
Chicago, Illinois 60607

RE: Internal Advice Request 29/92; Classification of cotton gauze sponges; Section XI, Note 7, made up or not made up; Explanatory Notes for made up; 6307, HTSUSA v. 5208, HTSUSA

Dear Sir:

This ruling is in response to Internal Advice Request 29/92 filed by Stein, Shostak, Shostak & O'Hara, on behalf of their client, Ulti-Med International, Inc., requesting review of your classification of certain cotton gauze sponges imported from Taiwan and China.

FACTS:

The goods at issue are commercially known as cotton gauze sponges. Two types of cotton gauze sponges are in dispute--one with an x-ray detectable element (a radiopaque cord) and one without such an element. The first gauze sponge consists of a rectangular piece of plain woven cotton fabric measuring 16 inches by 14 inches which is folded six times to form a 4 inch by 4 inch gauze sponge. The edges of the fabric are not finished, but after folding only folded edges are exposed. Customs Chicago laboratory examined a sample and reported the fabric contains 8 single yarns per centimeter in the warp and 5 single yarns per centimeter in the filling. The fabric weighs 17 grams per square meter. Based on the laboratory report, the fabric has an average yarn number of 76.

The second gauze sponge is essentially the same as the first with the exception that the second sponge has a blue strip pressed into the center of the fabric after cutting the fabric and before folding it. The blue strip consists of 83 percent barium sulfate and 17 percent polyvinyl chloride and phthalate plasticizer. The strip serves as an x-ray detectible marker. -2-

Once formed, the gauze sponges are banded together in groups of ten, encased in poly bags (containing either 2000 or 4000 sponges per bag) and shipped to the United States in cardboard cartons. After importation, they are sterilized and repacked for sale to users, i.e., health care providers.

ISSUE:

Are the gauze sponges at issue classifiable as articles of heading 3005, HTSUSA, which provides for, among other things, wadding, gauze, bandages and similar articles put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes? If not, how are they classified?

LAW AND ANALYSIS:

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to [the remaining GRIs taken in order]."

Heading 3005, HTSUSA, provides for, among other things, gauze, bandages and similar articles put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes. It is agreed that if the cotton gauze sponges at issue were entered put up in forms or packings for retail sale directly to users, the gauze sponges would be classifiable in heading 3005, HTSUSA.

Counsel for the importer has taken the position that the language "put up in forms...for retail sale" goes to the form and condition of the sponges upon importation and their packaging. Counsel argues that the sponges at issue meet the requirements of heading 3005 regardless of whether they are subject to repacking after importation. We believe this is an incorrect reading of the heading text. The Harmonized Commodity Description and Coding System Explanatory Notes, while not legally binding, are recognized as the official interpretation of the Harmonized System at the international level. In this case, the explanatory note for 3005 clarifies the intent of the heading text.

The Explanatory Note states:

Wadding and gauze for dressings (usually of absorbent cotton) and bandages, etc., not impregnated or coated with pharmaceutical substances, are also classified in this heading, provided they are exclusively intended (e.g., because of the labels affixed or special folding) for sale directly without re-packing, to users . . . . -3-

The Explanatory Note is very clear. For classification in heading 3005, HTSUSA, the gauze sponges cannot be subjected to repacking prior to sale to users. The gauze sponges at issue are repacked after importation before going to the actual user. Therefore, the gauze sponges at issue cannot be classified in heading 3005, HTSUSA.

Counsel for the importer has also submitted as instructive a Canadian International Trade Tribunal decision classifying certain laparotomy sponges in heading 3005. Dumex Medical Surgical Products Ltd and The Deputy Minister of National Revenue for Customs and Excise, App. No. AP-91-132. The United States is not bound by this decision and disagrees with the reasoning found in it. Revenue Canada is appealing the decision and is not following it pending that outcome. We believe that the goods at issue in this case are not specifically described by the terms of the heading text for heading 3005 because they are not put up for retail sale. Additionally, it is our view that the explanatory note for heading 3005 makes clear that repacking of the articles at issue excludes them from classification within heading 3005. As the gauze sponges fail to meet the requirements for classification in heading 3005, HTSUSA, we must look to alternative classifications.

The gauze sponges consist of cotton woven cloth, in one case, and cotton woven cloth and a strip of barium sulfate with plastic in the other. We will first discuss the classification of the gauze sponge without the barium strip.

Section XI of the HTSUSA contains the classification provisions for textiles and textile articles. Note 7 to Section XI defines the expressions "made up" for purposes of Section XI. For the cotton gauze sponge to be classifiable as a made up article, it must meet the terms of Note 7.

Note 7, Section XI, provides, in pertinent part, that the expression "made up" in Section XI means:

(a) Cut otherwise than into squares or rectangles;

(b) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, tablecloths, scarf squares, blankets);

(e) Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of -4-
identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded);

The cotton gauze sponge unfolded is a rectangular piece of fabric. Counsel for the importer has argued the gauze sponge meets the terms of Note 7(b), i.e., produced in the finished state because the gauze sponges are not further worked after importation but are usable in their form at the time of entry.

In applying Note 7, Customs has found it beneficial to refer to the Harmonized Commodity Description and Coding System Explanatory Notes. The General Explanatory Notes for Section XI provide guidance regarding Note 7. With respect to the provision within the Note for "produced in the finished state, ready for use", the explanatory notes state, in relevant part:

. . ., [R]ectangular (including square) articles simply cut out from larger pieces without other working and not incorporating fringes formed by cutting dividing threads are not regarded as "produced in the finished state" within the meaning of this Note. The fact that these articles may be presented folded or put up in packings (e.g., for retail sale) does not affect their classification.

The cotton gauze sponge falls directly within the above description. The gauze sponge is presented folded and is used in that form, however, per the explanatory note, this does not affect its classification. In other words, simply cutting and folding the cotton cloth into a form in which it is recognizable and useable as a gauze sponge does not make it a made up article within the meaning of Note 7. Therefore, the gauze sponge is classifiable as cotton woven fabric of heading 5208, HTSUSA.

We note that counsel for the importer has presented Customs rulings which conflict with this position. The cited rulings, HRL 083524 of June 12, 1989 and NYRL 833702 January 25, 1989, were issued shortly after the implementation of the HTSUSA on January 1, 1989. As Customs has gained experience with the new tariff, we have realized errors which were made in interpreting the new tariff in some of the initial rulings issued after the HTSUSA went into effect. Due to the volume of rulings issued by Customs, a ruling which needs modification may inadvertently be overlooked. The rulings cited by counsel misinterpreted Note 7 of Section XI and will be revoked in whole or in part as is necessary to correct the error.

The General Explanatory Notes to Section XI were amended to clarify the meaning of Note 7. This amendment, which consisted of an additional paragraph regarding Note 7(b)--"produced in the finished state"--became effective in February 1990. Cited earlier in this ruling, the additional paragraph made it clear that articles which were simply cut into square or rectangular shapes could not be considered made up articles even if folded or packed for retail sale. Thus, although an article will not be subjected to further working or processing after importation and will be used in its form as presented at entry, it cannot be considered a made up article within the provision "produced in the finished state, ready for use" if it is simply cut into a square or rectangle from a larger piece of fabric. Customs has issued numerous rulings since the amendment of the Explanatory Notes which follow this reasoning. See, HRL 086614 of March 30, 1990; HRL 089203 of July 19, 1991; HRL 089058 of November 25, 1991; and HRL 950786 of January 28, 1992.

Having determined that the cotton gauze sponge is classifiable as woven cotton fabric because it does not meet the requirements of Note 7, Section XI for consideration as a made up article, we must now examine the cotton gauze sponge with the strip of barium sulfate and plastic.

The gauze sponge with the barium sulfate strip consists of woven cotton fabric and a strip or thread of barium sulfate and plastic. As we have just determined, the cotton gauze fabric is classifiable in heading 5208, HTSUSA. The barium strip, known as a radiopaque cord, is classifiable in heading 2833, HTSUSA. (See, HRL 950796 of January 23, 1992, classifying a radiopaque cord in subheading 2833.27.0000, HTSUSA.)

GRI 2(b) directs that goods consisting of more than one material or substance, i.e., as in this case, are to be classified according to the principles of GRI 3. GRI 3(a) provides, among other things, that when two or more headings refer to part only of the materials or substances in a composite good, the headings are to be considered equally specific. In this case, the cotton gauze sponge with the barium sulfate strip is a composite good. The barium sulfate strip, or radiopaque cord, we believe, is not generally sold separately, but is used in the manufacture of items which are required to be x-ray detectable. As a composite good, following GRI 3(a), the headings at issue, heading 5208 and 2833, must be considered equally specific and GRI 3(b) is applicable.

GRI 3(b) provides that classification is to be determined by the material or component which imparts the essential character to the good. In this case, the cotton woven fabric provides the essential character. We base this decision on the fact that it is the sponge which absorbs body fluids and thus establishes the -6-
function of the good. The barium sulfate strip serves merely as a marker or identifier. Therefore, classification is according to the cotton woven fabric.

As to the issue of whether the cotton gauze sponge with the barium sulfate strip is classifiable as a made up article, we believe it is not. Note 7(e), Section XI, provides that for purposes of Section XI a good is "made up" if it is "assembled by sewing, gumming or otherwise." It is our understanding that the barium sulfate strip is applied to the cotton fabric by a heat pressing process. In determining that this is not an assembly within the meaning of Note 7(e), we have considered the Legal Notes for Chapter 59 which encompasses impregnated, coated, covered or laminated textile fabrics. Notes 2(a)(4) and 5(c) apply to fabrics which are partially coated or partially covered with, in the first case--plastics, in the second--flock, dust, powdered cork or the like. Both notes state that where the coating or covering is only partial and a design results, the fabrics are usually classified in chapters 50 to 55, 58 or 60.

The barium sulfate is mixed with a plastic which serves as its medium. This plastic medium with barium sulfate is joined by heat to the textile fabric. It partially covers the fabric, i.e., as a strip, and creates a stripe down the fabric. We believe the fabric with the barium sulfate strip added is akin to the partially covered or partially coated fabrics described in Notes 2(a)(4) and 5(c). It is clear from the cited notes that the addition of a partial coating or covering does not create a made up article and the goods are classifiable as fabric. Therefore, we do not view the addition of the barium sulfate strip to the textile fabric to be an assembly with the meaning of Note 7, Section XI.

HOLDING:

The cotton gauze sponges at issue, with or without a barium sulfate strip, are classifiable as woven cotton fabric in subheading 5208.21.6090, HTSUSA, which provides for bleached cotton plain woven fabric, weighing not more than 100 grams per meter squared, of number 69 or higher, cheesecloth. The goods are dutiable at 13.5 percent ad valorem and fall within textile category 226.

The designated textile and apparel category may be subdivided into parts. If so, the 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, to obtain the most current information available, we suggest 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 updated weekly and is available for inspection at your local Customs office.

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

This decision should be mailed by your office to the internal advice requestor no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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