HQ 952228 - Protest no. 2002-92-100270; Boots, textile and leather; Uppers, external surface area; Footwear, athletic; Accessories and reinforcements; Delayed effective date; T.D. 92-32 - United States International Trade Commision Rulings

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HQ 952228

June 7, 1993

CLA-2 CO:R:C:M 952228 DFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 6404.19.20

District Director of Customs
Suite 244
4233 Canal Street
New Orleans, Louisiana 70130-2341

RE: Protest no. 2002-92-100270; Boots, textile and leather; Uppers, external surface area; Footwear, athletic; Accessories and reinforcements; Delayed effective date; T.D. 92-32

Dear Sir:

This is in response to the Application for Further Review of Protest no. 2002-92-100270 dated March 12, 1992, covering shipments of hiking boots produced in Korea. A sample was submitted for examination.

FACTS:

The sample boot designated on the invoice as a "6 eyelet leather Bean boot" is commonly called a "Trader Bay Hiker." The sole and lower portion of the high top boot are molded from rubber [duck bottom] and stitched to the remaining upper portion which has an external surface area of textile and leather overlaying textile material. The protestant indicates that leather exterior covers approximately 90-92% of the interior materials leaving only a small area, approximately 8-10%, of the outer textile portion of the interior lining revealed.

The entries covering these hiking boots were liquidated under subheading 6402.91.50, Harmonized Tariff Schedule of the United States (HTSUS), as other footwear with outer soles and uppers of rubber or plastics, other footwear, covering the ankle, other, footwear designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather. The applicable rate of duty for this provision is 37.5% ad valorem.

The protestant maintains that the hiking boots are properly classifiable under subheading 6403.91.60, HTSUS, as footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather, other footwear, covering the ankle, other, for men, youths and boys. The applicable rate of duty for this provision is 8.5% ad valorem.

In the alternative protestant suggests that the hiking boots are classifiable under subheading 6404.11.20, HTSUS, as footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials, footwear with outer soles of rubber or plastics, sports footwear, tennis shoes, basketball shoes, gym shoes, training shoes and the like, having uppers of which over 50 percent of the external surface area (including any leather accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is leather. The applicable rate of duty for this provision is 10.5% ad valorem.

If the hiking boots are not classified as claimed above, protestant asserts another alternative claim that they are classifiable under subheading 6404.19.15, HTSUS, as footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials, footwear with outer soles of rubber or plastics, other, footwear having uppers of which over 50 percent of the external surface area (including any leather accessories or reinforcements such as those mentioned in note 4(a) to this chapter is leather. The applicable rate of duty for this provision is 10.5% ad valorem.

ISSUE:

Are the leather pieces overlaying the textile material of the upper considered accessories or reinforcements within the purview of note 4(a) to Chapter 64?

What is the constituent material which comprises the greatest external surface area of the boot's upper?

Are the hiking boots considered "athletic footwear" for purposes of classification under subheading 6404.11.20, HTSUS?

Is the provision for protective footwear in subheading 6404.19.20, HTSUS, considered more specific for the hiking boots involved than the provision containing a physical description of merchandise set forth in subheading 6404.19.15, HTSUS?

LAW AND ANALYSIS:

Classification of goods under the HTSUS 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, HTSUS, 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.

Note 4(a) to Chapter 64, HTSUS, reads as follows:

The material of the upper shall be taken to be the constituent material having the greatest external surface area, no account being taken of accessories or reinforcements such as ankle patches, edging, ornamentation, buckles, tabs, eyelet stays or similar attachments.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) to the HTSUS, although not dispositive should be looked to for the proper interpretation of the HTSUS. See 54 FR 35128 (August 23, 1989). General EN (D) to Chapter 64, which is relevant here, reads in pertinent part as follows:

If the upper consists of two or more materials, classification is determined by the constituent material which has the greatest external surface area, no account being taken of accessories or reinforcements such as ankle patches, protective or ornamental strips or edging, other ornamentation (e.g., tassels, pompons or braid), buckles, tabs, eyelet stays, laces or slide fasteners.

Your classification of the hiking boot was based on a measurement of the external surface area of the boot's upper (ESAU) by a Sears' laboratory. The results of that measurement are listed as follows:

With Overlays Without Overlays

Leather 51.1% 33.5%

Rubber 43.8% 42.1%

Textile 5.1% 24.4%

Protestant asserts that it can be deduced from the above measurements that the exterior leather around the ankle collar and the pieced leather portions on either side of the boot were incorrectly excluded as ESAU and with their addition the ESAU would be 51.1% leather which would result in classification of the boot under subheading 6403.91.60, HTSUS.

Protestant maintains that the leather areas excluded by Customs are not accessories or reinforcements as defined in the EN's or chapter notes and should not be included in the measurement of the ESAU. Further, the examples of accessories and reinforcements set forth in Note 4(a) to Chapter 64, HTSUS, supra, and General EN (D) are additions to an already completed boot that are added for style or reinforcement purposes. The leather in the hiking boot is essential for the design of the boot for without it the boot would not be complete. Clearly, the leather here does not possess the characteristics of the examples of accessories or reinforcements nor does it meet the common meaning of the terms "accessories and reinforcements."

Customs has taken the position that the term "accessories or reinforcements," although not fully defined, includes any additional material added to an otherwise completed upper as long as the underlying material is a plausible upper material, even if not the best material. While we agree that the leather overlays are not accessories, we do not agree with protestant's contention that they are not reinforcements. Protestant defines the term "reinforcement" as an augmentation or addition of strength to something that has a pre-existing strength. Thus, with the boot in issue, the ankle would have little or no support without the leather, and consequently, the leather is not a reinforcement but it is the prime source of support to the ankle. We agree with protestant's definition of the term "reinforcement". However, in this case the upper without the leather overlays [Thinsulate material, consisting of plastic foam backed by gluing on both sides with fabric and a plastic foam collar] is almost 3/4 inch thick and most certainly does provide at least minimal support for the ankle. Further, we do not agree with protestant's claim that leather provides the initial support needed for the boot to satisfy its designed use. It appears that the overlayed material provides the initial support to the ankle while the leather overlays perform a reinforcing role in augmenting the support provided by the overlayed materials.

The protestant states that the textile material being an integral part of the interior lining of the shoe has no effect on the calculation of the ESAU. Further, materials of which only a de minimis portion are exposed on the exterior of the upper should be excluded from the calculation of the ESAU. We regard the so-called interior lining material which appears as a portion
of the ESAU before the overlays are removed to be a plausible upper material. The de minimis rule has no application here. The presence of textile material on the external surface of the upper is not an inadvertence. It was placed there to increase the "breathability" of the boot and for stylistic reasons e.g., increased salability. Varsity Watch Company v. United States, 34 CCPA 155, C.A.D. 359 (1947;
Corporacion Argentina de Productores de Carnes v. United States, 32 CCPA 175, C.A.D. 304 9(1945).

Protestant claims that the textile material appearing on the external surface of the boot's upper is an integral part of the interior lining of the shoe and has no effect on calculation of the ESAU. Further, it is claimed that the lining material is specifically excluded from calculation of the ESAU by virtue of General EN (D) to Chapter 64, HTSUS, which provides in part that "[t]he constituent material of any lining has no effect on classification." Inasmuch as the so-called lining material appears as part of the external surface area of the upper [more than a de minimis amount] we would not exclude it from calculation of the ESAU because it is in fact plausible upper material.

Protestant makes an alternative claim that the hiking boots should be considered athletic footwear for tariff purposes and classified under subheading 6404.11.20, HTSUS.

In T.D. 92-32 (16 Cust. Bull. 4), responding to the claim of the importers that the hiking/backpacking boot is classifiable as athletic footwear, Customs stated at page 18 the following:

In this instance the hiking/backpacking boot, although used in the sport of backpacking, fails to qualify as athletic footwear within subheading 6404.11 because it is not "like" tennis shoes, basketball shoes, gym shoes, and training shoes. Specifically, hiking boots are heavier than the listed exemplars of athletic footwear. This slows the wearer's running speed substantially. All the exemplars are used in sports which require fast footwork or extensive running. Additionally, the exemplars are not constructed so as to protect the foot against rough and rocky terrain as are hiking boots. For these reasons we conclude that the hiking/backpacking boot is not classifiable under subheading 6404.11, as claimed.

Protestant maintains that the reasons stated above for not considering hiking boots as athletic footwear are unsubstantiated and incorrect for the following reasons:

1. Customs cited no evidence that hiking boots are heavier than the exemplars and, if they are, that such weight would be sufficient to substantially slow the wearers running speed. There appears to be several high top basketball shoes that weigh approximately the same or even more than some hiking boots.

2. Customs made the statement that all the exemplars are used in sports that require fast footwork or extensive running. Nowhere does this qualification appear in the tariff schedule or the applicable notes. There are other uses, apart from running and fast footwork, for the exemplars such as training shoes which are often used for such athletic activities as weight lifting.

3. Weight cannot be used as an attribute to exclude hiking boots when the weight difference between the exemplars is often times drastic, such as the weight difference between ultra light shoes designed for long distance running and sturdy high top basketball shoes.

4. The claim by Customs that the exemplars are not constructed so as to protect the foot against rough and rocky terrain does not appear to be an accurate statement. Running shoes designed for outdoor use are constructed to give their wearer comfort when running on rough terrain such as gravel. Further, high top basketball shoes offer the same support and protection to the wearer's ankle to assist the wearer in making sharp turns.

5. Webster's Third New International Dictionary (1986) defines the word "sneaker" as "3: a shoe usu. of canvas with a pliable rubber sole worn esp. for sports or hiking...." The definition of gym shoe includes shoes made for hiking. Clearly, if the common meaning of one of the exemplars includes shoes used for hiking then a hiking boot must be considered to be "like" the exemplars and be classified as athletic footwear.

It is our observation that hiking boots [especially the sample] are heavier than the listed exemplars and their weight is sufficient to substantially slow the wearers' running speed. This is especially so when compared with the wearer's speed when wearing the type of footwear represented by the exemplars. However, it should be noted that weight alone is not the sole factor in determining whether a shoe is athletic footwear for tariff purposes. An examination of the sample reveals that it is not "like" the exemplars in that it differs from them in several significant respects exclusive of weight. First, the sample boot has a steel shank in its sole which is not present in any of the listed exemplars. Second, the sample boot has a waterproof "duck bottom" which is a type of construction not found in the exemplars. Third, the sample boot has a distinct heel which is not present in footwear represented by the exemplars.

We agree with the protestant that there is nothing in the EN's or the tariff schedule which explicitly provides that all the exemplars of athletic footwear are used in sports that require fast footwear or extensive running. However, the use of the term "and the like" in Additional U.S. Note 2 requires us to make a determination as to the type of footwear which is ejusdem generis with tennis shoes, basketball shoes, gym shoes, and training shoes. There is no doubt that the exemplars including training shoes are principally used in sports that require fast footwork or extensive running.

Protestant asserts that Customs is inaccurate in its claim that the exemplars are not constructed to protect the foot against rough and rocky terrain. It is our view that while running shoes designed for outdoor use provide wearer comfort when running on gravel, they certainly do not provide the kind of protection needed for the foot when running across rough terrain [not just gravel] where one encounters rocks, branches, water, mud, etc. The exemplars are definitely not designed for such use.

The definition of the word "sneaker" cited by the protestant does not persuade us that hiking boots are "like' "the exemplars. Certainly, one can wear sneakers for hiking but it is also true that one can also wear oxfords. However, neither sneakers nor oxfords are designed for use in hiking over rough terrain as are hiking boots. We note that the word "hiking" as used in the definition can be easily equated with the word "walking" which we believe more closely resembles reality with respect to the use of "sneakers."

The final alternative claim by the protestant is that pursuant to GRI 3(a) the hiking boots are more specifically provided for under subheading 6404.19.15, HTSUS, than under subheading 6404.19.20, HTSUS, as footwear with outer soles of rubber, plastic, leather or composition leather and uppers of textile materials, footwear with outer soles of rubber or plastics, other, footwear having uppers of which over 50 percent of the external surface area (including any leather accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is leather.

GRI 3(a), HTSUS, which is relevant here, provides in pertinent part 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 . . .

Protestant asserts that the hiking boots could arguably be classified under either subheading 6404.19.15, HTSUS, or subheading 6404.19.20, HTSUS, which are equally indented provisions. However, the hiking boots are more specifically provided for under subheading 6404.19.15, HTSUS, and, therefore pursuant to GRI 3(a) should be classified therein. The rationale for this claim is that subheading 6404.19.15, HTSUS, contains a rather technical surface area description covering very specific types of shoes whereas subheading 6404.19.20, HTSUS, covers any type of protective shoe, which could cover a broad array of shoes whose surface areas contain any numerous types of materials.

It is clear that the hiking boots are prima facie classifiable under subheading 6404.19.15, HTSUS. They are also prima facie classifiable under subheading 6404.19.20, HTSUS, as protective footwear noting the presence of their vulcanized rubber foot portions and their "Thinsulate" linings.

In Headquarters Ruling Letter 086993 dated June 12, 1990, Customs ruled that a combination leather and textile boot was "more specifically described" in subheading 6404.19.20, HTSUS, than under subheading 6404.19.15, HTSUS. The rationale for this position was that the provisions for protective footwear in subheading 6404.19.20, HTSUS, is a use provision which is considered to be a more specific description of the footwear than the physical description of the footwear in subheading 6404.19.15, HTSUS.

It has come to Customs attention that our characterization of the provision in subheading 6404.19.20, HTSUS, for "[f]ootwear designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather" as a use provision is not entirely accurate. It has been suggested that the provision is more accurately described as both a "use" and "design" provision. We have agreed with this suggestion and would now characterize the protective provision in subheading 6404.19.20, HTSUS, as essentially a "designed for use" provision.

Nonetheless, it remains our position that the provision for protective footwear in subheading 6404.19.20, HTSUS, is more specific than the provision in subheading 6404.19.15, HTSUS. It is our observation that a requirement that the footwear be designed to be worn over or in lieu of other footwear for protective purposes is harder to satisfy than a requirement that the footwear fit a particular physical description.

In the event that the provision for protective footwear in subheading 6404.19.20, HTSUS, is not considered to be a more specific provision than the provision for the physically described footwear in subheading 6404.19.15, HTSUS, we submit that the two provision are equally specific. Consequently, following GRI 3(c), HTSUS, classification under subheading 6404.19.20, HTSUS, is appropriate as " . . . the heading which occurs last in numerical order among those which equally merit consideration."

When the leather pieces were removed from the upper of the sample, we found that the same textile outer material that appears in the four spaces between the leather pieces prior to their removal, constituted all of the ESAU above the rubber/plastic bottom portion of the boot, with the exception of the small strip of textile topline trim. In our opinion this means that all of the leather should be considered "accessories or reinforcements." Therefore, using Sears' own laboratory report, this boot has an ESAU, with no account being taken of accessories or reinforcements, of 57.9% textile and 42.1% rubber/plastic.

In T.D. 92-32 Customs took the position that hiking boots with GORE-TEX liners are properly classifiable as protective footwear under subheading 6404.19.20, HTSUS, with duty at the rate of 37.5% ad valorem. However, the effective date of that determination was delayed for 90 days from the date of publication of the document in the Customs Bulletin which was April 15, 1992. Consequently, the delayed effective date of T.D. 92-32 applies to importations made prior to July 15, 1992.

In a supplemental submission dated May 24, 1993, counsel for the protestant asserts that the effective date of T.D. 92-32, June 23, 1992, governs the effective date of the ruling in the instant case, and the protest should be allowed on that basis.

Counsel states that T.D. 92-32 covers all affected parties and pursuant to 19 C.F.R. 177.9(e)(3) all affected parties should be afforded the effects of this delay. In recent Headquarters's rulings issued subsequent to T.D 92-32, Customs took the position that affected parties are those parties who have imported boots which are similar to the hiking boots in T.D. 92-32 with respect to their "protective" qualities. Counsel argues that because the boots in issue are very similar to the boots in T.D. 92-32 and because Customs has held that they have the same protective qualities, the effective date of T.D. 92-32 also governs the effective date of the instant boots which were entered for consumption prior to June 23, 1992.

Counsel cites HRL's 089929 and 950202 dated April 24 and 25, 1992, respectively, as examples of rulings in which Customs granted a delayed effective date to entries of hiking boots which were similar to the hiking boots ruled on in T.D. 92-32 with respect to their "protective" qualities.

The hiking boots which were the subject of the cited rulings were similar in their "protective" qualities to the hiking boots which were the subject of T.D. 92-32 in that they possessed waterproof liners. The hiking boots in issue do not derive their "protective" qualities from waterproof liners but rather from their "duck bottoms" and "Thinsulate" linings. Consequently, these hiking boots cannot be said to be similar in their "protective" qualities to the hiking boots which were the subject of T.D. 92-32. Consequently, entries of the "Trader Bay Hikers" are not entitled to the delayed effective date set out in T.D. 92-32.

HOLDING:

The leather pieces overlaying the textile material of the upper of the boot are considered reinforcements within the meaning of note 4(a) to Chapter 64, HTSUS.

The constituent material which comprises the greatest external surface area of the boot's upper is textile material.

Hiking boots are not considered "athletic footwear" for purposes of classification under subheading 6404.11.20, HTSUS.

The provision for protective footwear in subheading 6404.19.20, HTSUS, is considered more specific for the hiking boots involved than the provision containing a physical description of merchandise set forth in subheading 6404.19.15, HTSUS.

The hiking boots are dutiable as liquidated at the rate of 37.5% ad valorem under subheading 6404.19.20, HTSUS. Inasmuch as the boots' "protective" features are derived from the boot's "duck bottoms" and "Thinsulate" linings rather than a waterproof liner, the protestant is not entitled to liquidation at the rate of 10.5% ad valorem prior to July 15, 1992. See T.D. 92-32 (16 Cust. Bull. 25).

Since the rate of duty under the classification indicated above is the same as the liquidated rate, the protest should be denied in full. A copy of this decision should be attached to the Customs Form 19, and mailed to the protestant, through counsel, as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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