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HQ 955541


May 18 1994

CLA-2 CO:R:C:M 955541 DFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 6402.91.90; 6406.10.9040

James F. O'Hara, Esq.
Stein, Shostak, Shostak & O'Hara
3580 Wilshire Boulevard
Los Angeles, California 90010-2597

RE: Footwear, athletic, w/removable liners; Liners removable; Sets; Composite goods; Essential character; External surface area; T.D. 84-59; HRL's 955705, 952170, 086055, 953219, 953452

Dear Mr. O'Hara:

This is in reference to an inquiry dated December 14, 1993, on behalf of addidas U.S.A., Inc., concerning the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), of an athletic shoe with a removable liner. Samples were submitted for examination.

FACTS:

The sample submitted, article 074192, is a man's basketball [athletic] shoe consisting of a lace-up "frame" and a removable liner. This shoe "frame" has a unit-molded plastic sole and a plastic upper. The sole overlaps all of the perimeter of the upper by 1/4 inch or more and therefore, the shoe has a foxing- like band. The "frame" upper has six cutouts through which the liner is visible. The two cutouts at the instep and its lateral equivalent each have their top and bottom edges joined by three 7/16 inch wide textile strips. There is a plastic pull loop that rises above the back of the "frame." In place of eyelet stays and eyelets, there are narrow metal rods which pass through the upper and create eyelets through which the shoe will be laced. Attached at the front of the upper by two elastic textile strips on each side in part of the space that would normally contain the tongue is a plastic oval made from the same material as the rest of the upper. Below this oval is another open area through which the liner is visible.

The liner is a slip-on, over-the-ankle bootie with an upper made of a textile-plastic foam-textile sandwich. It has an applied plastic sole which is molded with a tread which makes the bootie suitable for (limited) wear as footwear without the frame. Inasmuch as the "frame" does not have a lining, it cannot be worn without the removable liner. We have been informed that in normal use, the liner will remain in the frame when the wearer removes his foot from the shoe. When the liner is removed from the shoe for washing or any other reason, it will most likely be reinserted into the frame before the wearer places his foot in the liner because of the great difficulty in inserting the liner into the frame while on the foot of the wearer.

ISSUES:

1. What constitutes the external surface area of the upper (ESAU) of each shoe "frame" and each complete shoe?

2. What is the classification of the shoe "frames" imported without liners?

3. What is the classification of the liners imported without "frames"?

4. What is the classification of one complete pair of shoes, (i.e., one pair of shoe "frames" imported with one corresponding pair of liners)?

5. What is the classification of one pair of shoe "frames" imported with two or more pairs of liners?

LAW AND ANALYSIS:

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, and, provided such headings or notes do not otherwise require, according to [the remaining GRI's taken in order]." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes. GRI 6, HTSUSA, requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable. The GRI's apply in the same manner when comparing subheadings within a heading.

Issue 1

The "frame," when imported separately, has an ESAU which consists of all of the visible plastic surface including the plastic pull loop [tab] and the plastic oval, which we consider to be the partial equivalent of a tongue, which is not normally counted as ESAU or as accessories or reinforcements (A/R). See T.D. 84-59, 18 Cust. Bull. 166 (1984). The ESAU also includes the six textile strips in the instep and lateral cutouts, and the visible portions of the metal rods which create the eyelets. It appears likely, but would require a measurement to be certain that the ESAU of the "frame" without the liner will be over 90% plastic. However, whether or not it is over 90% plastics does not matter because the "frame" has a foxing-like band which would preclude its classification under subheading 6402.91.40, HTSUSA, which provides for other footwear with outer soles and uppers of rubber or plastics, other footwear, covering the ankle, having uppers of which over 90 percent of the external surface area (including any accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is rubber or plastics except (1) footwear having a foxing or a foxing-like band applied or molded at the sole and overlapping the upper.

When the "frame" and liner are imported together, the external surface area of the upper of the complete shoe includes all of the textile areas where the textile liner is the only material covering the foot. Again, the plastic oval, which we consider to be the partial equivalent of a tongue is not counted as ESAU or as accessories or reinforcements. Further, textile will be considered the external surface area of the upper in those areas where it is visible and tactile when the tongue is removed, the areas where it comes up higher than the leather, and all the places where it is visible and tactile through cutouts in the leather. It is clear that the "frame" and liner together will still have an ESAU of plastic. However, it is equally clear that the ESAU including A/R will not be over 90% plastic. Again, whether or not it is over 90% plastics does not matter because the "frame has a foxing-like band which would preclude its classification under subheading 6402.91.40, HTSUSA.

Issues 2 & 4

Pairs of shoe "frames" imported separately and valued over $12 per pair are classifiable under subheading 6402.91.90, HTSUSA, which provides for other footwear with outer soles and uppers of rubber or plastics, other footwear, covering the ankle, other, valued over $12/pair.

A pair of shoe "frames" imported with a pair of liners and having a combined entered value of over $12 per pair is also classifiable under subheading 6402.91.90, HTSUSA.

Issue 3

In Headquarters Ruling Letter (HRL) 955705 dated March 1, 1994, Customs ruled that certain removable textile liners, similar to those in issue, are classifiable under subheading 6406.10.9040, HTSUSA, which provides for parts of footwear, uppers and parts thereof, other than stiffeners, other, other, of textile materials other than cotton, of man-made fibers. The rationale for our position with respect to the classification of this type of liner was stated as follows:

For tariff purposes a provision for parts of an article covers products solely or principally used as a part of such articles. The shoe "frames" involved are unfinished or incomplete footwear without the liners. These liners are designed for use with these shoe "frames" and are necessary for their completion. Further, even though the liners are capable of being worn outside of the shoe, they are designed for and will be principally used with these shoe "frames. Consequently, the liner imported separately qualifies for classification as parts of footwear for tariff purposes.

The liners or booties which were the subject of HRL's 952170 and 086055 can be distinguished from the instant liners in that they are used with finished or completed footwear. Unlike the liners in issue, they are not necessary to complete the footwear. They are accessories.

Following the reasoning set forth in HRL 955705, it is our opinion that the instant liners qualify for classification under heading 6406, HTSUSA.

It has been suggested that the product is more than "part of an upper" noting that the liner constitutes not only part of the shoe's upper but also is a removable sock lining or inner sole. Further, since the liner functions at all times as a sock lining (inner sole), its concurrent use as part of the upper cannot be said to be the sole or principal use. See Additional U.S. Rule of Interpretation 1(c), HTSUSA. Accordingly, the liners are classifiable under subheading 6406.99.30, HTSUSA, which provides for parts of footwear, other, of other materials, of rubber or plastics.

We disagree with the statement that the product is more than "part of an upper." It is our view that the merchandise as a whole is basically a removable liner and its function "as a sock lining" does not make it more than a "part of an upper" for tariff purposes.

GRI 2(b), HTSUSA, provides in part that "[t]he classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3."

GRI 3, HTSUSA, provides as follows:

3. When, by application of Rule 2(b) or for any other reason, 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.

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up 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 liners are prima facie classifiable under subheading 6406.10.9040, HTSUSA, which provides for parts of footwear, (including uppers whether or not attached to soles other than outer soles), uppers and parts thereof, other than stiffeners, other, other, of man-made fibers or under subheading 6406.10.6000, HTSUSA, which provides for parts of footwear, (including uppers whether or not attached to soles other than outer soles), other, of rubber or plastics.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) to the HTSUSA, although not dispositive should be looked to for the proper interpretation of the HTSUS. See T.D. 89-80, 54 FR 35127 (August 23, 1989). EN (IX) to GRI 3(b), at page 4, reads as follows:

(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.

Clearly, the liners which are composed of textile and plastic qualify as composite goods within the purview of GRI 3(b), HTSUSA. It is our observation that the essential character of the liner is derived from its textile portion noting that according to the information provided, it exceeds the plastic portion in value, weight and surface area. In view of our finding that the essential character of the article is derived from its textile portion, classification under subheading 6406.10.9040, HTSUSA, is appropriate.

Even if it were decided that neither component material could be said to impart the essential character to the merchandise, classification under subheading 6406.10.9040, HTSUSA, would be appropriate following GRI 3(c), HTSUSA, which states that "[w]hen 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."

Issue 5

One pair of shoe "frames" imported with two or more pairs of liners is classifiable as a set under subheading 6402.91.90, HTSUSA, See Headquarters Ruling Letter (HRL) 953219 dated February 9, 1993, involving similar merchandise. The shoe liners are not composite goods with the shoe "frames" because both pairs of liners cannot be worn at the same time. Therefore, the second pair of liners would be subject to visa requirements or quota restraints, if any are in effect. See HRL 953452 dated April 28, 1993.

HOLDING:

Pairs of shoe "frames" imported without liners and valued over $12 per pair are dutiable at the rate of 20% ad valorem under subheading 6402.91.90, HTSUSA.

A pair of shoe "frames" imported with a pair of liners and having a combined entered value of over $12 per pair is also dutiable at the rate of 20% ad valorem under subheading 6402.91.90, HTSUSA.

Liners imported without "frames" are dutiable at the rate of 9% ad valorem under subheading 6406.10.9040, HTSUS. The textile category is 669.

One pair of shoe "frames" imported with two or more pairs of liners is dutiable as a set under subheading 6402.91.90, HTSUSA. The second pair of liners is subject to visa requirements or quota restraints, if any are in effect.

Sincerely,

John Durant, Director
Commercial Rulings Division

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