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HQ 961939





December 8, 1998

CLA-2 RR:CR:TE 961939 SS

CATEGORY: CLASSIFICATION

TARIFF NO.: 5201.00.2200

Port Director
U.S. Customs Service
200 East Bay Street
Charleston, SC 29401

RE: Decision on Application for Further Review of Protest No. 1601-97-100108; subheading 5201.00.2200 paired with 9903.52.01; subheading 5201.00.1200 paired with 9903.52.01; 19 C.F.R. or combed, Gossypium Hirsutum; sampling of raw cotton in bales in accordance with commercial practice

Dear Sir:

This is a response to the Application for Further Review of Protest No. 1601-97-100108, dated May 1, 1997, filed by Alexander International ("Protestant") on behalf of Weil Brothers Cotton, Inc., protesting the liquidation of 440 bales of cotton. The protest was originally sent to headquarters on September 4, 1997, but was never received. After reconstructing the protest, the port again forwarded the protest to headquarters on May 8, 1998. The protest was received May 12, 1998.

FACTS:

The merchandise in question consists of 440 bales of raw cotton of a variety known as Gossypium Hirsutum, commonly referred to as "upland cotton". On June 10, 1996, Weil Brothers Cotton, Inc. ("Importer") filed an entry for 670 bales of cotton which were classified under subheading 5201.00.1200, HTSUSA (for cotton having a staple length under 28.575 mm(1-1/8 inches)), paired with 9903.52.01, HTSUSA. Although the entry covered two invoices, only Invoice number 96.246, which covered the 440 bales under protest, is relevant for the purposes of this review. The remaining bales covered by the second invoice were liquidated as filed.

According to the packing lists, Invoice number 96.246 covered two lots. Lot 101076 contained 211 bales and Lot 102134 contained 229 bales. Samples were taken from 21 bales in Lot 101076 and from 22 bales in Lot 102134. Customs laboratory test results showed that all 43 samples had staple lengths over 28.575mm. The average staple length for Lot 101076 was 29.642mm. The average staple length for Lot 102134 was 29.591mm. On March 6, 1997,
Customs issued a Notice of Rate Advance Action (CF29) notifying the Importer that Invoice

96.246 on the entry would be liquidated under subheading 5201.00.2200, HTSUSA, for cotton having a staple length of 28.575 mm (1-1/8 inches) or more but under 34.925 mm (1-3/8 inches). It appears that the Notice of Action and laboratory reports were sent to the Protestant on March 27, 1997. A copy of that envelope submitted by Protestant reveals a stamp which states "DELAYED DUE TO INCORRECT ZIP CODE, PLEASE NOTIFY YOUR CORRESPONDENTS". The Port indicates that the Notice of Action and laboratory reports were returned to the Port because of an incorrect zip code for the Importer listed on the entry. The Protestant, however, only indicates that it did not receive the laboratory reports until it contacted Customs and asked that they be provided. In any event, it appears that notification was delayed due to the fact that the Importer showed the wrong zip code on its entry address. Furthermore, it does not appear that the Importer filed a request for redetermination of staple length once it finally did receive the laboratory reports. The entry was liquidated on April 11, 1997.

The Protestant timely filed this protest seeking reliquidation of the entry and a refund of duties and interest paid. The Protestant contends that sampling was improper in that ten percent (10%) was not sampled. Protestant also contends that the staple length determination was not promptly mailed in accordance with 19 C.F.R. ?151.84. Protestant further contends that the delay in notification denied the importer the ability to ask for redetermination pursuant to 19 C.F.R. ?151.85.

ISSUES:

I. Whether the methods used in the sampling of the cotton bales were proper?
II. Was the Protestant denied the ability to file a request for redetermination?

LAW AND ANALYSIS:

I. The methods used in the sampling of the cotton bales were proper.

The Customs Regulations governing the testing and sampling of cotton are set forth in 19 C.F.R. ?151 Subpart F. The Customs Regulations do not provide specific guidelines for the method of sampling of cotton to determine the staple length, but merely require sampling to be "in accordance with commercial practice". 19 C.F.R. ?151.83. In interpreting "commercial practice", Customs has previously relied on American Society of Testing Materials (ASTM) Standard D-1441. See Headquarters Ruling Letter (HQ) 084543, dated February 12 1991; HQ 959489, dated October 1, 1996; and HQ 960362, dated August 22, 1997. In May 1996, Customs Laboratories and Scientific Services division issued instructions to Customs officers for sampling raw cotton in bales based on the ASTM Standard D-1441. The instructions state in part:

"1. Take at random 10 bales or 10 percent of the bales in the lot, whichever is GREATER. Two subsamples will be taken from each bale, to be taken from opposite sides."

A close reading of the cited regulations, however, reveals that they contain no language requiring Customs to specify how many bales should be sampled. See HQ 0845434. Section 151.83 only imposes a requirement that when sampling is done, it must be in accord with commercial practice.

Protestant contends that ten percent (10%) was not sampled. Protestant argues that the invoice was for a total of 440 bales and, thus, 44 bales should have been sampled. Although only a total of 43 bales were sampled, lots, not the total number of bales shown on the invoice, are the relevant units for sampling purposes. Each lot must be sampled separately. The number of bales sampled must be ten percent (10%) of each lot. As stated above, the 440 bales under protest involved two lots. Lot 101076 had 211 bales and ten percent (10%) is 21.1. 21 bales were sampled. Lot 102134 had 229 bales and ten percent (10%) is 22.9. 22 bales were sampled. Obviously, the inspector considered 22 bales as ten percent (10%) of the lot.

Protestant further contends that ten percent (10%) was not sampled by alleging that only 42 bales were sampled. Two laboratory reports exist for bale number 182 (in Lot 102134) and Protestant claims that the bale was sampled twice. However, it is very obvious when a bale has been sampled. The instructions and the ASTM standard indicate that 8 ounces are removed from each bale leaving two large cavities approximately 12 inches by 6 inches by 4 inches deep on two opposite sides of each bale sampled. The fact that a bale has been sampled is obvious and it is unlikely that an inspector would mistakenly take two samples from the same bale. Accordingly, although there are two laboratory reports for bale number 182, it is probable that the wrong bale number is shown on one of the reports.

In HQ 084543, dated February 12, 1991, Customs dealt with a similar case where the importer classified 19 entries of cotton under the Tariff Schedules of the United States (TSUS) heading providing for a staple length under 1-1/8 inches and Customs liquidated the entry under the heading providing for a staple length of 1-1/8 inches or more, but under 1-1/16 inches. Of a total of 1,970 bales covered by the protested entries, 137 bales were sampled. Only three samples measured less that 1-1/8 inches. Customs stated that if classification of cotton is made solely based on the results of the stapling of samples, Customs must follow commercial practice by sampling 10 bales, of each entry, or 10 percent of those bales, whichever is greater, and that sampling must result in a large predominance of the bales falling within that classification. However, despite the fact that no samples were even taken from four of the entries, all the entries were classified under the heading for staple length of 1-1/8 inches or more. It appears that Customs looked cumulatively at the evidence and found that the overwhelming nature of the test results warranted the classification of all nineteen entries under the heading for cotton having a staple length of 1-1/8 inches or more. Applying this rational to the present case, even if it were found that exactly ten percent was not sampled, based on the overwhelming evidence that none of the sampled cotton measured under 28.575 mm, the sampling of one or two additional bales would not have changed the final result.

In HQ 959489, dated October 1, 1996, the importer claimed classification of 59 bales of cotton under the heading for cotton having a staple length under 28.757 mm. After the cotton was sampled and tested, Customs issued a Notice of Rate Advance Action and liquidated the merchandise under the heading for cotton having a staple length of 28.575 mm. or more but under 34.925 mm. Section 10.1 of the ASTM Standard Practice D 1441, provides that a proper sample is gathered by taking two four ounce subsamples from each of two opposite sides of each bale sampled. Customs deviated from commercial practice in the manner in which it gathered the cotton samples from each individual bale; Customs only took six ounce samples. In that case it was clearly established that Customs had not adhered to commercial practice and the protest was granted. No similar deviation from commercial practice has been established in the present case. Accordingly, Customs reclassification of the merchandise was proper.

In Headquarters Ruling Letter (HQ) 955711, dated July 21, 1994, the issue presented was whether Customs should rely on its laboratory determination that the imported jackets were not "water resistant". The importer alleged that the Customs laboratory reports should not be considered because only two samples were tested instead of the three required. Customs held that the burden of proof was on the importer to establish that the Customs laboratory report was invalid and that the importer had not sustained that burden. The only showing of error on the part of Customs laboratory was that it tested two samples instead of three as required by AATCC Test Method 35-1985. Customs noted that the outcome of the two test results made a third test unnecessary. A third test would have had no effect since it could not have resulted in the three tests averaging the required amount of water penetration. We stated that if the failure of the Customs laboratory to conduct a third test as required by AATCC Test Method 35-1985 was considered an error, it was obviously a harmless one. Applying this rationale to the present case, a twenty third test would have had no effect since it could not have resulted in the laboratory results for Lot 102134 averaging a staple length under 28.575 mm. None of the samples in Lot 102134 were under 28.575 mm. The staple length of the twenty third sample would have to be approximately 6 mm. in order to reduce the average to under 28.575 mm. Even if we were to assume that one bale was erroneously sampled twice and two additional tests were needed, the staple lengths of the additional samples would have to be exceedingly short in order to reduce the average to under 28.575 mm. Accordingly, if the failure of Customs to sample a twenty third bale is considered an error, it is obviously a harmless one.

There is no evidence or indication that the sampling methodology used by the Port did not comply with the acceptable industry standard. Furthermore, the referenced sampling method has a firm basis in Customs practice. In the absence of such evidence, it is our opinion that the staple length of the cotton was accurately determined. Accordingly, the proper classification for this merchandise remains in subheading 5201.00.2200 HTSUSA.

II. The Protestant was not denied the ability to file a request for redetermination.

The entry at issue involved at least 670 bales of cotton. At least 65 bales were sampled from the entry. Bales of cotton from the second invoice, which were liquidated as entered, were also sampled. The samples were forwarded to the Customs laboratory shortly after entry on June 10, 1996. The laboratory results for samples taken from the first invoice are dated July 31, 1996, and August 1, 1996. A review of the file does not reveal when the results were actually received by the port. However, the port advises that the review was completed by the import specialist as expeditiously as possible. A Notice of Action notifying the importer of the rate advance was prepared on March 6, 1997. The Notice of Action and laboratory report were sent to the importer on March 27, 1997.

Section 151.84 of the Customs Regulations (19 C.F.R. samples of each sampled bale of cotton stapled by a qualified Customs officer, or a qualified employee of the Department of Agriculture and shall promptly mail the importer a notice of the results determined. Protestant alleges that the seven month lapse of time between the date of the test results and Notice of Action is not acceptable as being done promptly. In Headquarters Ruling Letter (HQ) 960665, dated April 10, 1998, a lapse of five months between the laboratory results and notice of action was held to satisfy the requirements of 19 U.S.C. ?151.84. Although it is not clear when the laboratory results were received by the port, it will be assumed for the purposes of this ruling that the laboratory reports were reviewed and processed by the field import specialist as expeditiously as possible. Accordingly, we find that this satisfied the requirements of 19 U.S.C. ?151.84.

Protestant further contends that the requirements of Section 151.84 were not met in that it did not receive copies of the laboratory report until it contacted Customs and asked that they be mailed. On March 27, 1997, Customs mailed a copy of the Notice of Action and laboratory results to the Importer at the address listed on the entry documents. However, a copy of the envelope shows a stamp which states "DELAYED DUE TO INCORRECT ZIP CODE, PLEASE NOTIFY YOUR CORRESPONDENTS". The port indicates that the envelope was returned to Customs due to the incorrect zip code. However, Protestant submitted a copy of the envelope with its protest and, thus, may have received it. Regardless, any delay in notification after March 27, 1997, to a great extent, was caused by the Importer's failure to note the correct zip code on the entry documents.

Protestant further alleges that it was denied the ability to request redetermination due to the time lag between importation, entry, lab sampling and notice of action. Section 151.85 of the Customs Regulations (19 C.F.R. ?151.85) reads in its entirety:

If the importer is dissatisfied with the port director's determination, he may file with the port director, within 14 calendar days after the mailing of the notice, a written request in duplicate for a redetermination of the staple length. Each such request shall include a statement of the claimed staple length for the cotton in question and a clear statement of the basis for the claim. The request shall be granted if it appears to the port director to be made in good faith. In making the redetermination of staple length, the port director may obtain an opinion of a board of cotton examiners from the U.S. Department of Agriculture, if he deems such action advisable. All expenses occasioned by any redetermination of staple length, exclusive of the compensation of Customs officers, shall be reimbursed to the Government by the importer.

In HQ 960665, the protestant claimed it was denied the ability to request redetermination because the bales of cotton had been consumed and the sample material destroyed by both the USDA and the importer. The claim was found to be without merit because the protestant did not actually file a request for redetermination. Customs held that the regulation requires the importer to file a request for redetermination within 14 days of receiving notice of the port director's determination. Since the burden to seek a redetermination was on the protestant and the protestant failed to seek redetermination and state a claim within the time period prescribed by the regulation, it could not avail itself of the regulation to support the protest. In the present case, Protestant admits that the Importer did receive notice of the port director's determination. A review of the record indicates that Importer failed to seek redetermination. Accordingly, the Protestant was not denied the ability to file a request for redetermination.

Even if the Importer had requested redetermination, it probably would not have been granted. The regulation indicates that port director may grant a request for reconsideration if it appears to be made in good faith. Based on the fact that none of samples resulted in lengths under 28.575, any request for redetermination would not have been viewed as being made in good faith and would have been denied by the port director. Customs has held that the decision to grant or deny the request is left to the discretion of the port director. See HQ 960665. Accordingly, there was no need for a redetermination of the testing for staple length and the proper classification for this merchandise was under subheading 5201.00.2200, HTSUSA.

HOLDING:

The method of sampling of cotton to determine staple length must be in accordance with standard commercial practice. In the instant protest, the cotton was tested in accordance with that standard. Furthermore, we find that Customs notified the Protestant of the test results on the imported cotton in accordance with 19 C.F.R. ?151.84 and Protestant failed to file a request for reconsideration under 19 C.F.R. 151.85. The subject merchandise, was correctly classified in subheading 5201.00.2200, HTSUSA, which provides for cotton, not carded or combed, having a staple length of 28.757 mm (1-1/8 inches) or more but under 34.925 mm (1-3/8 inches): described in General Note 15 of the tariff schedule and entered pursuant to its provisions, paired with heading 9903.52.01, HTSUS. The applicable rate of duty is 4.4 cents per kilogram.

Even assuming arguendo that the proper number of cotton bales were not sampled or that notice should have been sent sooner, the Protestant has failed to establish any showing of prejudice.

The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, 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 make the decision available to Customs personnel, and the public on the Customs Home page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division

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