HQ 954300 - Detrimental Reliance on DD 877853; reclassification of ladies' hooded pullover garment in heading 6211, HTSUSA; reasonable reliance on a ruling is necessary for detrimental reliance to apply; oral advice is not binding; 19 CFR 177.9(d)(3); 19 CFR 177.1(b) - United States International Trade Commision Rulings

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CLA-2 CO:R:C:T jb
954300

October 20, 1993

Sherry L. Singer, Esq.
Singer & Singh
469 Seventh Avenue, Suite 1300
New York, N.Y. 10018

RE: Detrimental Reliance on DD 877853; reclassification of ladies' hooded pullover garment in heading 6211, HTSUSA; reasonable reliance on a ruling is necessary for detrimental reliance to apply; oral advice is not binding; 19 CFR 177.9(d)(3); 19 CFR 177.1(b)

Dear Ms. Singer:

This is in reply to your letter dated May 21, 1993, on behalf of your client, Regarde Bien, Ltd., in which you claim that your client relied to its detriment on District Decision (DD) 877853, dated September 25, 1992. Samples were provided to this office for examination.

In Headquarters Ruling (HQ) 953251, dated February 8, 1993, Customs revoked DD 877853 and reclassified a ladies' hooded pullover garment in subheading 6211.42.0050, HTSUSA, which provides for, among other things, women's or girls' cotton woven shirts, excluded from heading 6206, dutiable at a rate of 8.6 percent ad valorem and subject to quota category 341. The articles had previously been classified in DD 877853 in subheading 6202.92.2060, HTSUSA, which provides for, among other things, women's or girls' anoraks, windbreakers and similar articles, of cotton, dutiable at a rate of 9.5 percent ad valorem, and subject to quota category 335.

The samples you submitted for review are manufactured in India and are referred to as Styles 5011 and 5022. Both styles are virtually identical to those ruled upon for Angelique Imports (hereinafter, "Angelique").

Style 5011 is made of a heavy cotton woven fabric and features long sleeves with partially elasticized cuffs, a drawstring at the bottom, a partial "V neck" opening secured by a drawstring and two side pockets at the waist. The garment has a hood and a partial lining that extends from the top of the hood to the middle of the back.

Style 5022 is also made of a heavy cotton woven fabric and features long sleeves with partially elasticized cuffs. The cuffs have two buttons and flap closures. There is a braided drawstring at the bottom of the garment with plastic bells at the ends to prevent unravelling. The garment is hooded and has a partial lining that extends from the top of the hood to the middle of the back. The front of the garment has an opening that extends half way down the front; it has a heavy zipper closure as well as a placket closure that extends to the bottom of the garment. The garment is closed by a 2-1/2 inch flap along with two large buttons. In addition, the garment has two side pockets.

The revoked ruling to which you refer, that is, DD 877853, was issued to Angelique. In a subsequent ruling issued to that importer (HQ 953251, dated February 8, 1993), it was determined that, based on purchase agreements and an established pattern of liquidation verifying the same, Angelique had reasonably relied to its detriment on the classification determination and applicable quota category set forth in DD 877853.

Under 19 CFR 177.9(d)(3), the effective date of a ruling letter that revokes an earlier ruling may be delayed for a period of up to ninety days, provided that the party seeking delay can demonstrate to the satisfaction of the Customs Service that reliance on the revoked ruling was reasonable and such reliance was detrimental.

CFR 177.9(e)(2) states:

In applying to the Customs Service for a delay in the effective date of a ruling letter described in paragraph (e)(1) of this section, an affected party must demonstrate to the satisfaction of the Customs Service that the treatment previously accorded by Customs to the substantially identical transactions was sufficiently consistent and continuous that such party reasonably relied thereon in arranging for future transactions. The evidence of past treatment by the Customs Service shall cover the 2-year period immediately prior to the date of the ruling letter, listing all substantially identical transactions by entry number (or other Customs assigned number), the quantity and value of merchandise covered by each such transaction (where applicable), the ports of entry, and the dates of final action by the Customs Service. The evidence of reliance shall include contracts, purchase orders, or other material tending to establish that the future transactions were arranged based on the treatment previously accorded by the Customs Service. (Emphasis added)

CFR 177.1(b) states:

The Customs Service will not issue rulings in response to oral requests. Oral Opinions or advice of Customs Service personnel are not binding on the Customs Service.* * *

Based upon your submission, several factors were made clear:

1. Your client sent a sample garment to its customs broker. In August of 1992, the customs broker obtained oral advice from a team member in New York regarding the classification of the garment. As was confirmed in the affidavit submitted by your client, based on that oral advice, your client advised his suppliers in India and imported the merchandise.

2. On September 25, 1992, Customs issued Angelique a binding ruling.

3. Your client has made approximately eighty entries of this type of garment, covering the period of July, 1992 through December, 1992. In all, over 250,000 pieces of this type of garment were imported by your client and cleared by Customs.

The rules of law defining detrimental reliance are explicitly and clearly delineated in the Customs Federal Regulations as noted above. In making a finding for detrimental reliance there are several requisite criteria which must be found, namely they are as follows:

1. reliance on a ruling; the ruling may be issued to the originating party or to a third party, but there must be reliance by that party on that ruling

2. the reliance was reasonable

3. as a direct consequence of that reasonable reliance the party suffered to his/her detriment

In the case before us your client lacks two of the three requisite criteria. Based on your client's own affidavit, there was never any reliance on a Customs binding ruling. He obtained oral advice regarding the classification of the merchandise in August, and as the liquidated entries show, he had already begun importing the merchandise in July. Angelique was not issued a ruling until a month after your client obtained oral advice and two months after he had already begun importing the merchandise in July.

Additionally, it is the opinion of this office that though your client began importing the merchandise in July, the five months which span the importation, i.e. from July of 1992 to December of 1992, when he received the redelivery notices, do not constitute a continuous and consistent pattern of liquidation for detrimental reliance to apply. Finally, as is clearly stated by the Customs Regulations, any oral advice obtained by the Customs Service personnel is not binding on the Customs Service. It is for this reason that the Customs Service has an official ruling program.

Consequently, your request for detrimental reliance is denied.

This action is being taken in accordance with 19 CFR 177.9(d)(3) and 19 CFR 177.9(e)(3). Any questions concerning this letter should be directed to the Textile Classification Branch, Office of Regulations and Rulings.

Sincerely,

John Durant, Director

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