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HQ 960528




January 27, 1998

CLA-2 RR:TC:TE 960528 jb

CATEGORY: CLASSIFICATION

TARIFF NO.: 3921.12.1950; 5903.10.2090; 5903.10.2500

Port Director
U.S. Customs Service
909 S.E. First Avenue
Miami, Florida 33131-2595

RE: Decision on Application for Further Review of Protest No. 520197-100175; fabrics laminated to cellular and compact plastic layers

Dear Sir:

This is a decision on application for further review of a protest timely filed by White & Case, on behalf of Spradling International Inc., on February 21, 1997, against your decision regarding the classification of certain fabrics laminated to cellular and compact plastics. All entries were liquidated between January 24 and February 7, 1997. Samples were submitted to this office for examination.

FACTS:

The subject merchandise is comprised of two types of fabrics. The first type consists of a plain knit man-made fabric laminated to plastic, referred to as two yarn knits. They are represented by submitted samples 1-16.

The second type of fabric, represented by samples 17-22, are referred to as three yarn knits and are described by the Protestant as follows:

The products in issue consist of sheets of plastic-textile combinations imported in rolls. The plastic portion is comprised of polymers of vinyl chloride (PVC) and consists of two layers. The top layer (also knows as the skin coat) consists of colored, thin compact film which is oven solidified (first oven) on top of silicone coated release paper. The inner (cellular) layer also consists of polymers of vinyl chloride, which are mixed with azodicarbonamide, a standard blowing agent used to produce cellular plastics. The inner layer is applied to the back surface of the solidified top coat, and the combined plastic layers are cured in a low temperature oven (second oven). The fabric portion is knit from 100 percent man-made fibers on a circular knitting machine. Such substrate is a three yarn knit of texturized polyester filaments.... The fabric substrate is laminated to the plastic thermally in a third oven.

At the time of entry, Customs lacked the samples necessary to differentiate the two yarn knits from the three yarn knits, and as such, both types of fabric were classified in heading 6001, Harmonized Tariff Schedule of the United States (HTSUS). The Protestant disagrees with this classification determination and advocates classification of the subject merchandise in heading 3921, HTSUS.

ISSUE:

What is the appropriate classification for the subject merchandise?

LAW AND ANALYSIS:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the rules 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.

Two Yarn Knits- Samples 1-16

Heading 3921, HTSUS, provides for other plates, sheets, film, foil and strip, of plastics. The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN) to that heading state:

This heading covers plates, sheets, film, foil and strip, of plastics, other than those of heading 39.18, 39.19 or 39.20 or of Chapter 54. It therefore covers only cellular products or those which have been reinforced, laminated, supported or similarly combined with other materials....

Heading 5903, HTSUS, provides for textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902. Legal Note 2(a)(5) to chapter 59, HTSUS, states that heading 5903, HTSUS, applies to textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than:

Plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (chapter 39);

The EN to that heading state:

Such products are classified here whatever their weight per mý and whatever the nature of the plastic component (compact or cellular), provided:

(1) That, in the case of impregnated, coated or covered fabrics, the impregnation, coating or covering can be seen with the naked eye otherwise than by a resulting change in colour.

In many of the textile fabrics classified here, the plastic material, usually coloured, forms a surface layer which may be smooth or be embossed to simulate, e.g., the grain of leather ("leathercloth").

Heading 6001, HTSUS, provides for pile fabrics, including "long pile" fabrics and terry fabrics, knitted or crocheted. The EN to that heading state:

Unlike the woven fabrics of heading 58.01, the products of this heading are obtained by knitting. The following methods of production are those mainly used:

(1) a circular knitting machine produces a knitted fabric in which, by means of an additional yarn, protruding loops are formed; afterwards the loops are cut to form a pile and thus give a velvet-like surface;

(2) a special warp knitting machine knits two fabrics face to face with a common pile yarn; the two fabrics are then separated by cutting to produce two knitted fabrics with a cut pile;

(3) textile fibres from a carded sliver are inserted into the loops of a knitted ground fabric as it is formed ("long pile" fabrics);

(4) textile yarn to form loops ("imitation terry fabrics") (see General Explanatory Note). Such fabrics have rows of chain stitches on the back of the fabric and they differ from the pile fabrics of heading 58.02, which are characterized by rows of stitches having the appearance of running stitches along the length of the back of the fabric.

Knitted or crocheted pile fabrics, impregnated, coated, covered or laminated, remain classified in this heading.

In the case of the two yarn knits, an examination by the Customs laboratory reveals that the fabrics referenced as samples 1-16 are not of pile construction. Accordingly, we concur with the Protestant that heading 6001, HTSUS, is not the appropriate classification for this merchandise. However, as the fabric samples are not identical, we do not agree that all should be classified in heading 3921, HTSUS. Although almost all of the two yarn knit fabrics contain a layer of relatively thick cellular PVC under the skin or top layer, seven styles in this group are laminated solely with compact plastic and lack any cellular plastic. These styles are:

Blue Bird Sample 6
Palomar Perf Sample 8
Spanish Crush Sample 12
Levanti Sample 12
Crater Sample 12
Tier Sample 12
Transport Rino Sample 15

Accordingly, we agree only in part with the Protestant's claim that the fabrics referenced as the two yarn knits in samples 1-16 should be classified in heading 3921, HTSUS. As the seven styles referenced above are laminated solely with compact plastic, they are precluded from classification in subheading 3921.11 through 3921.19, HTSUS, which provides only for cellular plastics. As Note 2(a)(5) to chapter 59, provides only for cellular plastics, not compact plastics, combined with plates, sheets or strips, the subject merchandise is not precluded from classification in chapter 59. As such, the appropriate classification for the affected seven styles is heading 5903, HTSUS, which provides for textile fabrics impregnated, coated, covered or laminated with plastics.

Three Yarn Knits- Samples 17-22

One of the Protestant's arguments for precluding this merchandise from classification in heading 6001, HTSUS, is that the fabric backing present on the material does not have the attributes required of looped pile fabrics, that is, a pile-like construction and pile-like appearance. Citing a number of rulings which held that pile fabrics must feature "yarns which project sufficiently from the surface of the fabric" (HQ 952803 and HQ 952804, dated January 28, 1993; HQ 953990, dated August 2, 1993; NY 804897, dated December 8, 1994), the Protestant argues that the subject fabrics lack the requisite protrusion of the third yarn both before and after the plastics application. Furthermore, the Protestant argues that should Customs find that the subject merchandise meets the criteria for pile in terms of construction and appearance before the
application of the plastics, this has no bearing on the final classification of the merchandise because it is a well established principle that tariff classification must be determined with reference to the condition of the article at the time of importation. In this respect, the Protestant claims that:

...the substrate is bonded to the plastic thermally. The high temperature involved in such operation causes the manmade polyester fibers in the fabric to shrink in size. During such contraction, the overlain yarn is withdrawn or pulled toward the base of the fabric, resulting in the formation of tightly compacted helices or bundles and the consequent elimination of any supposed "loops" obtained from knitting. Consequently, the substrates on the imported articles lack the requisite appearance of piled fabrics. The compacted helices or bundles (1) are not "protruding loops"; (2) do not "project sufficiently" above the face fabric; and (3) do not possess any other characteristics needed to achieve a pile appearance. In fact, the contraction that occurs during thermal bonding achieves an effect that is the exact opposite of piling.

Although we are in agreement with Protestant's statement that the basic tenet of classification is based on the condition of the merchandise at the time of importation, we dispute the claim that the subject merchandise lacks the requisite protrusion of the additional yarn required of pile fabrics. As was stated in HQ 952921, dated May 7, 1993, addressing how much a yarn should "protrude" to qualify for classification in heading 6001, HTSUS, it was determined that:

...there remains some question as to whether the loops created by the laid-in yarn protrude enough to warrant classification under heading 6001, HTSUSA, as a pile fabric. It is this office's opinion that they do. The EN to heading 6001, HTSUSA, provides no quantitative guidance as to how much loops must protrude; it only describes types of processes which produce pile fabrics. As the fabric at issue meets the requirements of EN(4), we are unwilling to create quantitative prerequisites which would mandate that looped yarn be of a certain length in order to qualify as a pile fabric. We note, however, that in situations where the fabric has been knitted so tightly that in effect no loops have been created, the fabric will not qualify as a pile fabric classifiable under heading 6001, HTSUSA.

The subject merchandise was submitted to the Customs Laboratory for analysis. Their report, accompanied by color photographs taken under a microscope, clearly show that the inlaid yarn protrudes from the ground fabric of all the remaining fabrics in group 17-22, except for one style in that group. In the style referenced as "Renaissance Fr" the pile side of the fabric is laminated to the plastic coating and therefore not exposed. As such, all the backings on the fabrics, except for "Renaissance Fr", are pile.

However, in making an accurate classification determination with respect to the three yarn knits, pursuant to GRI 1, all relevant section and chapter notes must be applied. The EN to chapter 39, HTSUS, under Plastics and textile combinations, beginning at page 597 state, among other things:

Wall or ceiling coverings which comply with Note 9 to this Chapter are classified in heading 39.18. Otherwise, the classification of plastics and textile combinations is essentially governed by Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59. The following products are also covered by this Chapter:

(d) Plates, sheets and strip of cellular plastics combined with textile fabrics, felt or nonwovens, where the textile is present merely for reinforcing purposes.

In this respect, unfigured, unbleached, bleached or uniformly dyed textile fabrics, when applied to one face only of these plates, sheets or strip, are regarded as serving merely for reinforcing purposes. Figured, printed or more elaborately worked textiles (e.g., by raising) and special products, such as pile fabrics, tulle and lace and textile products of heading 58.11, are regarded as having a function beyond that of mere reinforcement.

Note 1(h) to section XI states that this section does not cover:

Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39.

As we stated above, Legal Note 2(a)(5) to chapter 59, HTSUS, states that heading 5903, HTSUS, applies to textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than:

Plates, sheets or strip of cellular plastics, combined with textile fabric, where the textile fabric is present merely for reinforcing purposes (chapter 39)

Chapter 60, HTSUS, provides for knitted or crocheted fabrics. Note 1(c) to that chapter states that this chapter does not cover:

Knitted or crocheted fabrics, impregnated, coated, covered or laminated, of Chapter 59 . However, knitted or crocheted pile fabrics, impregnated, coated, covered or laminated, remain classified in heading 6001.

In classifying this merchandise a comprehensive analysis requires more than a simplistic approach. In this instance we clearly have a plastic which has been combined with a textile fabric. Although the first part of note (d) in the EN to chapter 39 makes reference to textile fabrics which act merely for reinforcing purposes, the second part of note (d) appears, at first glance, to preclude the classification of this merchandise in chapter 39 (pile fabrics are regarded as having a function beyond that of mere reinforcement). The same reference to textile fabrics "acting merely for reinforcing purposes" is made in the discussion of chapter 59 fabrics. However, it is the underlying understanding of those notes that if a textile acts merely for reinforcing purposes when combined with cellular plastic, the good is NOT to be precluded from classification in chapter 39. The presumption in the EN to chapter 39 is that pile fabrics are regarded as having a function which is beyond mere reinforcement. The pivotal question thus becomes, can a fabric which is determined to be pile act only as "mere reinforcement"?

In the case of the subject merchandise the Protestant has submitted exhaustive documentation showing a breakdown of customers by market segment which utilize the subject merchandise as commercial upholstery seating in hotels, motels, restaurants, hospitals, nursing homes and medical clinics; automotive interiors and exteriors; and boat interiors. A small number of clients use these fabrics for low-end specialty bags. In all these applications, the coated surface is exposed to provide a performance function associated with vinyl materials, i.e., water resistance, abrasion resistance, stain resistance and cleanability properties. The pile surface, on the other hand, exists solely in assisting the plastics against the elongation stress to which these plastics will be subjected when used for upholstery purposes. Furthermore, the pile side of this merchandise is never exposed, that is to say, only the plastic side is visible. Therefore, in this case, the pile does not provide any aesthetic or tactile motivation for the purchase of this merchandise.

It would thus appear that a pile fabric can exist solely for reinforcement purposes. This is further supported in HQ 085186, dated October 17, 1989, where five styles of motorcycle jackets made up of imitation leather were classified in heading 3921, HTSUS. In the analysis, it was stated that:

Reading the notes for Chapters 59, 60 and 39 together, it appears where a knit pile fabric is impregnated, coated, covered or laminated with cellular plastics, it is classifiable in heading 6001, HTSUSA, unless the textile fabric is merely for reinforcing purposes. We believe that is the case in this instance. In our view, the fabric backing, although substantial, is present only for the purpose of preventing the tearing or stretching of the outer plastics layer. Therefore, the fabric is more specifically a fabric of
Chapter 39 than a fabric of
Chapter 60. The jackets made up of such fabric are therefore classifiable in
Chapter 39.

See also, HQ 085100, dated September 11, 1989, which similarly held that a boys' imitation leather jacket with an underlying warp knit pile base fabric was classified in heading 3921, HTSUS.

In essence, in reading all of the above stated notes in conjunction, it is the opinion of this office that a determination can be made that the subject merchandise is classifiable in chapter 39. We also note that as per, the EN to chapter 39, under Plastics and textile combinations, the classification of plastics and textile combinations is principally governed by "Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59"- this note is explicitly silent on note 1(c) to chapter 60. Similarly, note 1(h) to section XI, in excluding certain provisions from the textile section, makes no distinction between different types of fabric, other than to state that they be woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39.

As such, although this is certainly not the case with all pile fabrics, in the case of the subject merchandise, we are convinced by the evidence submitted by the importer that the pile backing on these fabrics serves no purpose other than to act as mere reinforcement for the outer plastic coating. As such, we concur with the reasoning set forth above in HQ 085186 (and HQ 085100) wherein it was stated, that although the fabric backing is of pile construction, its presence is required merely to prevent the tearing or stretching of the outer plastics layer.

Accordingly, we concur with the Protestant that the submitted three yarn knits, samples 17-22, are properly classified in heading 3921, HTSUS.

HOLDING:

All of the materials constructed with the two yarn knit fabrics, referenced samples 1-16, except for styles Blue Bird, Palomar Perf, Spanish Crush, Levanti, Crater, Tier, and Transport Rino, are classified in subheading 3921.12.1950, HTSUSA, which provides for other plates, sheets, film, foil and strip, of plastics: cellular: of polymers of vinyl chloride: combined with textile materials: other: other. The applicable rate of duty is 5.3 percent ad valorem.

Styles Blue Bird, Palomar Perf, Spanish Crush, Levanti, Crater, Tier, and Transport Rino, are classified in either subheading 5903.10.2090, HTSUSA, which provides for textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: with polyvinyl chloride: of man-made fibers: other: over 70 percent by weight of rubber or plastics: other, with an applicable rate of duty of 2.5 percent ad valorem, or subheading 5903.10.2500, HTSUSA, which provides for textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: with polyvinyl chloride: of man-made fibers: other: other, with an applicable rate of duty of 8.1 percent ad valorem. Merchandise classified in the latter provision (subheading 5903.10.2500) fall in category 229.

All of the materials constructed with the three yarn knit fabrics, referenced samples 17-22, are classified in subheading 3921.12.1950, HTSUSA, which provides for other plates, sheets, film, foil and strip, of plastics: cellular: of polymers of vinyl chloride: combined with textile materials: other: other. The applicable rate of duty is 5.3 percent ad valorem.

The protest should be granted in full and a copy of this ruling should be appended to the CF 19 Notice of Action to satisfy the notice requirement of section 174.30(a) Customs Regulations.

In accordance with Section 3(A)(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 the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the 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 the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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