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HQ 953906

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August 3, 1993

CLA-2 CO:R:C:T 953906 CMR

CATEGORY: CLASSIFICATION

TARIFF NO: 5603.00.9030

District Director
U.S. Customs Service
Patrick N. McNamara Building
477 Michigan Avenue
Detroit, Michigan 48266

RE: Protest and Application for Further Review #3801-3-100293; classification within subheading 9905.56.20, HTSUSA; "intended for use"; Application of Additional U.S. Rule of Interpretation 1

Dear Sir:

This is in response to the protest and application for further review filed by XXXXXXX XXX XXXXXX XXXXXXXXXXXXX Co. against your liquidation of an entry of polypropylene nonwoven fabric as classifiable in subheading 5603.00.9030, HTSUSA, dutiable at 7.5 percent ad valorem, and not in subheading 9905.56.20, HTSUSA, free of duty, as entered.

FACTS:

The merchandise at issue is polypropylene nonwoven fabric entered in roll stock form from Canada. The fabric is coated in the United States and then returned to Canada where it is used as liner fabric in the manufacture of disposable diapers.

The protestant contends that the nonwoven fabric is classifiable in subheading 9905.56.20, HTSUSA, which provides for:

Nonwovens certified by the importer as intended for use as liners or transfer layers in the manufacture of disposable diapers (provided for in heading 5603.00) [Emphasis added.]

ISSUE:

Provided the ultimate "intended use" of the nonwoven fabric at issue is as liners or transfer layers in disposable diapers,  -2-
must the manufacture of the disposable diapers occur in the United States in order for the nonwoven fabric to qualify for classification in subheading 9905.56.20, HTSUSA?

LAW AND ANALYSIS:

The classification of goods imported into the customs territory of the United States is determined by the provisions of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Classification 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]."

Chapter 99 of the HTSUSA provides for, among other things, temporary legislation and temporary modifications established pursuant to trade legislation.

Subchapter V, Chapter 99, provides for temporary modifications established pursuant to the United States-Canada Free Trade Agreement. Subheading 9905.56.20, HTSUSA, appears in Subchapter V.

The protestant argues that the language of subheading 9905.56.20, HTSUSA, only requires that the nonwoven fabric at issue be "intended for use" as liners or transfer layers in the manufacture of disposable diapers. Protestant asserts that the fabric at issue is intended for use as such, albeit in Canada. Protestant's position is that the language of 9905.56.20, HTSUSA, does not require the manufacturing of the diapers occur in the United States.

The language of the provision may not specify the required location of the manufacturing, but as the tariff is for the classification of goods imported into the customs territory of the United States, classification based upon use, be it actual use or principal use, is determined by the use of the good in the United States.

Subheading 9905.56.20, HTSUSA, is an actual use provision. It requires a specified intended use of goods at the time of importation.

U.S. Note 2 to Chapter 99 states:

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. -3-

Additional U.S. Rule of Interpretation 1(b) states:

In the absence of special language or context which otherwise requires--a tariff classification controlled by the actual use to which the imported goods are put in the United States is satisfied only if such use is intended at the time of importation, the goods are to be so used and proof thereof is furnished within 3 years after the date the goods are entered.

Additionally, customs regulations provide at 19 CFR section 10.134 (19 Code of Federal Regulations 10.134):

A showing of intent by the importer as to the actual use of imported merchandise shall be made by filing with the entry for consumption or for warehouse a declaration as to the intended use of the merchandise, or by entering the proper subheading of an actual use provision of the Harmonized Tariff Schedule of the United States (HTSUS) and the reduced or free rate of duty on the entry form. Entry made under an actual use provision of the HTSUS may be construed as a declaration that the merchandise is entered to be used for the purpose stated in the HTSUSA, provided the district director is satisfied the merchandise will be

The good at issue, nonwoven polypropylene fabric is entered into the United States for the purpose of being coated and then exported. The intent at the time of importation is coating; the intent upon exportation is use in the manufacture of disposable diapers. As it is the intended use of the merchandise at the time of importation that determines classification in subheading 9905.56.20, HTSUSA, the merchandise at issue is not classifiable therein. It was properly classified in subheading 5603.00.9030, HTSUSA.

HOLDING:

The protest should be denied. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the protestant.

Sincerely,

John Durant, Director
Commercial Rulings Division

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