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HQ 954947


February 17, 1994

CLA-2 CO:R:C:T 954947 CAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 6302.21.2020; 6302.21.2040; 6302.22.2010; 6302.22.2020

Gail T. Cumins, Esq.
Sharretts, Paley, Carter & Blauvelt, P.C. 67 Broad Street
New York, NY 10004

RE: Country of origin for combined waterbed fitted/flat sheet and pillowcases; Classification of a combined fitted/flat sheet and pillowcases; set vs. separates; GRI 3; GRI 6

Dear Ms. Cumins:

This is in response to your inquiry of August 10, 1993, requesting a country of origin determination as well as a tariff classification ruling for bed linen, on behalf of The Morgan Group, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The bed linen will be imported from Thailand or Sri Lanka.

FACTS:

The bed linen at issue consists of two pillowcases and one combined fitted/flat sheet sewn together. The submitted samples are constructed of woven 70 percent cotton/30 percent polyester fabric. In your submission you state that the imported articles will be constructed of either chief weight cotton (e.g., 60 percent cotton/40 percent polyester material) or chief weight polyester fabric, (e.g., 55 percent polyester/45 percent cotton material).

The combined fitted/flat sheet will be manufactured as follows: Printed fabric will be manufactured in Country A and then transported in rolls to either Thailand or Sri Lanka (hereinafter Country B). In Country B, fabric will be cut to length and width (four sides) and hemmed on all four sides. The submitted samples have only been cut to width but you have requested that we determine the country of origin as if they were cut to both length and width. Pockets are then cut to size and formed to fit all four corners of this panel. The pockets are sewn to the sheet corners and the outer edges of the pockets are hemmed. The bottom edge of the top panel is aligned with and sewn to the bottom edge of the bottom panel. In Country B, the pillowcases are created by cutting a panel, folding it over, and sewing each side. The opening of the pillows is then hemmed.

ISSUES:

I. Whether the merchandise in question is classifiable as a set or as a composite good?

II. What is the country of origin of the merchandise in question?

LAW AND ANALYSIS:

TARIFF CLASSIFICATION

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's, taken in order.

GRI 3(a) in referring to "sets", states that when two or more headings each refer to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods. In this case, sheets and pillowcases are packaged together and put up for retail sale. Heading 6302, HTSUSA, is the provision for bed linen, table linen, toilet linen and kitchen linen.

GRI 3(b) states that mixtures, composite goods, and goods put in sets 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.

The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN), although not legally binding, are the official interpretation of the tariff at the international level. The EN to GRI 3(b), provides, in part:

(IX) For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.

In this case, the combined fitted/flat sheet is constructed by permanently sewing a flat sheet to a fitted sheet to form an inseparable whole. The article is marketed and sold at the retail level as a single combined sheet. As such, the combined fitted/flat sheet is considered a composite good for tariff classification purposes.

As a composite good, the fitted/flat sheet is classified as a single article. Since the fitted sheet component and the flat sheet component are classifiable in the same heading and the same subheading, we do not need to determine which component determines the classification of this composite article.

GRI 6 states that for legal purposes, classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. GRI 6 mandates applying GRIs 1 through 5 when classifying goods at the subheading level. Also, GRI 6 requires the use of GRI 3 at the eight digit level in the HTSUSA, as it is this level at which the classification of merchandise is finally determined. Therefore, in order to be classifiable as a "set", the articles must be classifiable in at least two different subheadings.

In this instance, because the combined fitted/flat sheet and the pillowcases are classifiable under the same subheading, it can not be classifiable as a "set" in accordance with GRI 3. This determination is in accordance with Headquarters Ruling Letter 082043, dated April 5, 1989, when Customs determined that a fitted sheet, a flat sheet, and two pillowcases which were packaged and sold together at the retail level were classified separately because the only difference in the subheading classification was at the ten digit level.

COUNTRY OF ORIGIN

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A 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.

Section 12.130(d), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1), Customs Regulations, states that a new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in:

(i) Commercial designation or identity

(ii) Fundamental character or

(iii) Commercial use

Section 12.130(d)(2), Customs Regulations, states that for determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

(i) The physical change in the material or article

(ii) The time involved in the manufacturing or processing operations

(iii) The complexity of the manufacturing or processing operations

(iv) The level or degree of skill and/or technology required

(v) The value added to the article or material

Section 12.130(e)(1)(iv), Customs Regulations, states that a textile article will usually be a product of a particular country if the cutting of the fabric into parts and the assembly of those parts into the completed article has occurred in that country. However, 12.130(e)(2)(ii) states that a material will usually not be considered to be a product of a particular foreign country by virtue of merely having undergone cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use.

When making a determination as to whether fabric used to make sheets has been substantially transformed, the minimum processing required is cutting the fabric to length and width (four sides). After the fabric has been cut on four sides, Customs assesses the additional processing and makes a determination as to whether the additional processing coupled with the cutting, amounts to a substantial manufacturing operation.

In prior cases, Customs has evaluated the degree of skill, value, and amount of time expended to manufacture sheets and made substantial transformation conclusions accordingly. In HRL 952909, dated April 12, 1993, Customs concluded that fabric that had been cut to length and width, coupled with the additional processing required to attach piping to flat sheets, amounted to a substantial manufacturing operation.

It is important to note that the submitted sample has not been cut to length and width, but you maintain that the imported merchandise will be cut to length and width. Customs must make a determination as to whether a combined fitted and flat sheet that will be cut to length and width and sewn together in Country B amounts to a substantial transformation. The manufacturing process involved in constructing the fitted sheet at issue is different from the standard fitted sheet, which includes cutting each corner, sewing, and fitting elastic onto the corners. In this case, the fitted sheet is produced by cutting the corners into rounded edges and attaching four triangular pockets to each corner. It is Customs belief that if the combined fitted/flat sheet is cut to length and width in addition to the the finishing and joining operations, then the processing in Country B is sufficiently complex to amount to the last substantial transformation. Therefore, the country of origin of the combined fitted/flat sheet is Country B.

In determining the country of origin for pillowcases, Customs refers to Belcrest Linens v. United States, 741 F.2d 1368, (Fed. Cir. 1984). The court held that a bolt of woven fabric that was manufactured, stenciled with embroidery, and imprinted with lines of demarcation in China prior to being sent to Hong Kong where the fabric was cut, sewn into pillowcases, and packaged, was subject to its last substantial transformation in Hong Kong. Thus, when applying the court's rationale to the subject pillowcases, it appears that the fabric which will be cut and sewn into pillowcases in Country B, will undergo the last substantial transformation in Country B.

HOLDING:

The country of origin of the combined fitted/flat sheet and the pillowcases is Country B.

Based on the foregoing, if the chief weight of the combined fitted/flat sheet is cotton, it is classifiable under subheading 6302.21.2040, HTSUSA, which provides for cotton printed sheets. The applicable rate of duty is 7.6 percent ad valorem and the textile restraint category is 361. If the chief weight of the combined fitted/flat sheet is polyester, then it is classifiable under subheading 6302.22.2020, HTSUSA, which provides for printed sheets of man-made fibers. The applicable rate of duty is 13 percent ad valorem and the textile restraint category is 666. If the chief weight of the pillowcases are cotton, then they are classifiable under subheading 6302.21.2020, HTSUSA, which provides for cotton pillowcases. The rate of duty is 7.6 percent ad valorem and the textile restraint category is 360. If the chief weight of the pillowcases is polyester, then they are classifiable under subheading 6302.22.2010, HTSUSA, which provides for pillowcases of man-made material. The rate of duty is 13 percent ad valorem and the textile restraint category 666.

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, to obtain the most current information available, 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.

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

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted.

Your attention is directed to the Notice of Proposed Rule Making which the Customs Service published in the Federal Register on Monday, January 3, 1994 (59 FR 141). That notice proposed objective rules for determining the country of origin of goods imported into the United States. Although, the notice stated that the rules were intended to codify our present origin rules, there are a few areas where the proposed rules are not consistent with Customs present position. The transaction described in this ruling is one of those instances. Accordingly, you should be aware that if the proposed rules are adopted as published, this ruling will no longer be valid and a different result may apply.

Sincerely,

John Durant, Director

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