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HQ 958135



March 18, 1996
CLA-2 RR:TC:TE 958135 SK

CATEGORY: CLASSIFICATION

TARIFF NO.: 5402.41.9040

Port Director
U.S. Customs Service
Thomas P. O'Neill, Jr. Federal Bldg.
10 Causeway Street
Boston, MA 02222-1059

RE: Decision on Application for Further Review of Protest No. 0401-95-100377; synthetic multifilament yarn; 5402.41.9040, HTSUSA.

Dear Sir:

This is a decision on application for further review of a protest timely filed by Schenker International, Inc., on behalf of Ardmore Fibers Co., on May 16, 1995, against your decision regarding the classification of synthetic fibers. At issue is a single entry made at the port of Boston on January 19, 1995, and liquidated on April 14, 1995.

FACTS:

The subject merchandise consists of synthetic fibers and is described as "3 Denier Semi-Dull Round X Section T66 Nylon Drawn Plaited Tow from Waste Fibers." Protestant advocates classification under subheading 5505.10.0020, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for waste of nylon fibers. The merchandise was classified by Customs at liquidation under subheading 5501.10.0000, HTSUSA, which provides for synthetic filament tow of nylon.

A laboratory analysis was performed by the Customs lab at the New York Seaport. The lab report states:

"The sample consists of two bundles of continuous multifilament yarns. One bundle (loose) measuring approximately 1.75 meters in length and the other (tied up both ends) measuring approximately
1.6 meters in length

The loose bundle is composed of yarns containing 17 filaments per yarn. The yarns are of 58.1 decitex and each filament is of
3.42 decitex. The tied up bundle is composed of two types of yarns. One type is semidull in luster and contains 17 filaments and the other type contains 34 filaments and [is] bright in luster.
17 filament yarns are of 46.2 decitex and each filament is of 2.72 decitex. 34 filament yarns are of 79.8 decitex and each filament is of 2.35 decitex."

The samples sent to the lab were not in their condition as imported. After importation, the samples were cut into shorter lengths and placed into a plastic bag for submission to the lab.

ISSUE:

What is the proper classification of the subject merchandise?

LAW AND ANALYSIS:

Classification of merchandise 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, taken in order. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's.

Protestant claims that the subject merchandise is properly classifiable under subheading 5505.10.0020, HTSUSA, as waste of nylon fibers. The basis for Protestant's position is that the imported merchandise is made from waste tow and there is no similarity between it and first quality tow. The Port Director's position is that the subject merchandise is classifiable as tow, even if made from waste or substandard tow, and that waste does not include materials that have been reconditioned or recycled into new and different materials such as the instant merchandise.

This office's initial inquiry is whether the subject merchandise is classifiable as "waste" under the HTSUSA. The long-standing judicial definition of waste for purposes of tariff classification is set forth in Harley Co. v. United States, 14 Ct. Cust. Appls. 112, T.D. 41644 (1926), and was restated in David Studner et al. v. United States, 63 Cust. Ct. 1, C.D. 3865, 300 F. Supp. 1394 (1969), as follows:

"[I]n the tariff sense, waste is a term which includes manufactured articles which have become useless for the original purpose for which they were made and fit only for remanufacture into something else. It also includes refuse, surplus, and useless stuff resulting from manufacture or from manufacturing processes and commercially unfit, without remanufacture, for the purposes for which the original material was suitable and from which material such refuse, surplus, or unsought residuum was derived. The latter class of waste might be appropriately designated as new waste and includes such things as tangled spun thread, coal dust, broken or spoiled castings fit only for remanufacture."

In E. Dillingham, Inc. v. United States, 70 Cust. Ct. 43; Cust. Dec. 4406 (1973), the Customs Court determined that nylon 66, advanced waste in tow form, which could not be used for its original intended purpose as yarn without further remanufacture, was classifiable under item 309.75, Tariff Schedules of the United States Annotated (TSUSA), as "advanced waste of man-made fibers." The instant case is distinguishable from E. Dillingham for several reasons. First, the merchandise at issue is useable for its original intended purpose as yarn; it may not be first-quality, and it may not be marketable as originally expected, but it does have a use other than as waste. Furthermore, item 309.75, TSUSA, provided for advanced waste. The HTSUSA, which replaced the TSUSA in 1989, eliminated this provision for advanced waste. Heading 5505, HTSUSA, provides only for "waste of nylon fibers."
Waste is a byproduct of any one of a number of textile processes, but does not include waste materials that have been reconditioned or recycled into new and different materials. Although the subject material was manufactured from recycled source material, Customs does not deem it "waste" for tariff classification purposes because the merchandise is manufactured into a new material (yarn) which is not used in the manner of waste. The fact that the subject merchandise was made from waste material does not mean that it remains waste material after additional processing. See Headquarters Ruling Letter (HRL) 951835, dated August 19, 1992, where this office classified rope made of scrap magnetic tape as rope rather than as scrap or waste. See also HRL 958133, dated December 7, 1995.

The subject merchandise was classified at liquidation under subheading 5501.10.0000, HTSUSA, which provides for synthetic filament tow of nylon.
The lab analysis performed on this merchandise reveals that Customs' classification of the subject merchandise is improper. Heading 5501, HTSUSA, provides for synthetic filament tow. As stated above, the lab's findings reveal that the subject merchandise consists of yarn, not filament tow. Accordingly, classification is improper under heading 5501, HTSUSA.

Heading 5402, HTSUSA, provides for, "[S]ynthetic filament yarn (other than sewing thread), not put up for retail sale, including synthetic monofilament of less than 67 decitex." The subject merchandise consists of synthetic filament yarn and therefore classification is proper within this heading. Subheading 5402.41.9040, HTSUSA, provides for, in pertinent part, "[O]ther yarn, single, untwisted or with a twist not exceeding 50 turns per meter: of nylon or other polyamides: other... multifilament with a twist of 5 turns or more per meter." The lab report substantiates that the subject merchandise consists of nylon multifilament yarn. The National Import Specialist in New York examined the yarn under a magnifying glass and found the subject merchandise to possess a twist of more than 5 turns per meter. Based on the foregoing, classification is proper under subheading 5402.41.9040, HTSUSA.

HOLDING:

The subject merchandise is classifiable under subheading 5402.41.9040, HTSUSA, which provides for "[S]ynthetic filament yarn (other than sewing thread), not put up for retail sale, including synthetic monofilament of less than 67 decitex: other yarn, single, untwisted or with a twist not exceeding 50 turns per meter: of nylon or other polyamides: other... multifilament with a twist of 5 turns or more per meter." The applicable rate of duty at the time of entry was 9.8 percent ad valorem. The applicable textile quota category is 606.

As the rate of duty under the classification indicated above is the same as the rate under which the subject merchandise was liquidated, you should deny the protest in full.

A copy of this decision should be attached to the Form 19 and provided to the Protestant as part of the notice of action on the protest. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the
Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to the mailing of the decision.

Sixty days from the date of this decision, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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