HQ 0953261 - Protest No. 2904-93-100013; wicker chairs; 9903.10.42; Customs Trade Act of 1990; Pres. Proc. 6030; U.S. Note 1 to subchapter II of Chapter 99; U.S. Note 1 to subchapter III of Chapter 99; Notes 1 and 2 to Chapter 99; GRI 3 - United States International Trade Commision Rulings

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HQ 953261

July 13, 1993

CLA-2 CO:R:C:M 953261 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9902.94.01

District Director
U.S. Customs Service
511 N.W. Broadway Federal Building
Portland, OR 97209

RE: Protest No. 2904-93-100013; wicker chairs; 9903.10.42; Customs Trade Act of 1990; Pres. Proc. 6030; U.S. Note 1 to subchapter II of Chapter 99; U.S. Note 1 to subchapter III of Chapter 99; Notes 1 and 2 to Chapter 99; GRI 3

Dear District Director:

The following is our decision regarding the request for further review of Protest No. 2904-93-100013 which concerns the qualification of wicker chairs and settees for a reduction or suspension of duties under Chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS). The merchandise was entered on 5/19/92. The entries were liquidated on 10/9/92 and a protest was timely filed on 12/29/92.

FACTS:

The articles are wicker chairs and settees imported from Hong Kong. The merchandise was originally entered under subheading 9902.94.01/9401.50.00, HTSUS, with duties temporarily suspended. Subsequently, a proposed notice of action to reclassify the articles under subheading 9903.10.42/9401.50.00, HTSUS, was issued. On 9/9/92, protestant requested that the notice be canceled; it was not and the articles were liquidated at 5.6% ad valorem.

Protestant contends that the chairs and settees were properly classified when entered. The subheadings under consideration are:

9902.94.01 Furniture, seats, and parts thereof, of cane, osier, bamboo or other similar materials, including rattan (provided for in subheading 9401.50.00, 9401.90.25, 9403.80.30, or
9403.90.25) Free

9903.10.42 Seats, (other than those of 9402) of cane, osier, bamboo or similar materials (provided for in subheading 9401.50.00) 5.6%

Both provisions were in effect when the articles were entered, but have since expired. Subheading 9902.94.01, HTSUS, became a temporary provision by enactment of the Customs and Trade Act of 1990 (P.L. 101-382), on 8/29/90 and expired on 12/31/92. Subheading 9903.10.42, HTSUS, took effect on 10/13/89, by Presidential Proclamation 6030 dated 9/28/89.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1, HTSUS, states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes.

U.S. Note 1 to subchapter II of Chapter 99 states:

[a]ny article described in the provisions of this subchapter, if entered during the period specified in the last column, is subject to duty at the rate set forth herein in lieu of the rate provided therefor in chapters 1 to 98, inclusive.

U.S. Note 1 to subchapter III of Chapter 99 states:

[t]his subchapter contains the temporary modifications of the provisions in the tariff schedule established pursuant to trade legislation. Unless otherwise stated, the modified provisions are effective until suspended or terminated. Unless the context requires otherwise, any article described in the provisions of this subchapter, for which rates of duty are herein provided, if entered during the period specified, is subject to duty at the rate set forth herein in lieu of the rated provided therefor in chapters 1 to 98.

The subchapter notes indicate that each provision only suspends or reduces rates of duty in chapters 1 through 98 and not another Chapter 99 provision. It is unclear from examination of the subchapter notes whether or not the most recent chapter 99 provision can suspend another chapter 99 provision. Therefore, the legislative history of the Customs Trade Act of 1990, any history of Presidential Proclamation 6030, and any other applicable HTSUS notes must be examined.

The legislative history for subheading 9902.94.01, HTSUS, indicates that there was no domestic opposition to the provision and no awareness of the previous presidential proclamation addressing seats. (see Senate Report No. 101-252 p. 22; House Conference Report p. 101-650 p.194; 136 Cong. Rec. No. 43, 4/19/90 p. s 4532-4533.) The presidential proclamation explains that subheading 9903.10.42, HTSUS, was enacted to implement a GATT trade agreement regarding tropical products.(see: 54 Fed. Reg. No. 190, 10/3/89 pgs. 40839-40845). While the histories of the provisions do not clearly indicate which is applicable, Notes 1 and 2 to Chapter 99 do indicate a possible method for determining which subheading provides for the merchandise.

Notes 1 and 2 to Chapter 99 state:

1. The provisions of this chapter relate to legislation and to executive and administrative actions pursuant to duly constituted authority under which:

(a) One or more of the provisions in chapters 1 through 98 are temporarily amended or modified; or

(b) Additional duties or other import restrictions are imposed by, or pursuant to, collateral legislation.

2. Unless the context requires otherwise, the general notes and rules of interpretation, the section notes, and the notes in chapters 1 through 98 apply to the provisions of this chapter.

This note indicates that if the context does not otherwise require, the GRI's should be applied to resolve which heading applies to the merchandise. However, this might be an instance where the context requires otherwise. It could require that, under the principles of legislative interpretation, the subheading that was last promulgated applies.

If the GRI's were applied the problem would be resolved by GRI 3 because the chairs are prima facie classifiable in two headings. GRI 3 states in pertinent part that when, ... goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods ...those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

It has been suggested that subheading 9903.10.42, HTSUS, is more specific because it only applies to seats of subheading 9401.50.00, HTSUS, while subheading 9902.94.01, HTSUS, applies to both furniture and seats in subheadings 9401.50.00, 9401.90.25, 9403.80.30, and 9403.90.25, HTSUS. However, neither of these provisions refer to just a part of the seat. They both refer to seats and are therefore equally specific in their description of the article.

GRI 3 (b) states:

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

However, the essential character of the articles is their function as a seat. It is clear that these articles are seats of cane, osier, bamboo or other similar material.

GRI 3 (c) states:

(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

According to GRI 3(c), subheading 9903.10.42, HTSUS, with a dutiable rate of 5.6%, would be the subheading that covered wicker chairs and settees.

However, the principles of legislative interpretation would reach the opposite result. Subheading 9902.94.01, HTSUS, was enacted on 8/29/90 by Congress, after subheading 9903.10.42, HTSUS, was proclaimed by the President to take effect on 10/13/89, making it the last provision created for seats of bamboo etc.. We must presume that Congress was aware of the Presidential Proclamation when it enacted the law which set forth subheading 9902.94.01, HTSUS.

We believe that this legal question, whether GRI 3(c) or principles of legislative interpretation should apply, is a unique one. It may have been created by an oversight on the part of the drafters. Both provisions have expired making further administrative or court review of the legal question unlikely. Therefore, inasmuch as the goods were entered during the period that subheading 9902.94.01, HTSUS, was in effect, allowing for free entry, we believe that the protestant should be given the benefit and that the protest should be granted.

HOLDING:

The protest should be granted in full. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director

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