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HQ 959605




July 7, 2000

CLA-2 RR:CR:TE

Classification: 6404.20.6060
Port Director
U.S. Customs Service
300 South Ferry Street
Terminal Island, CA 90731

RE: Protest with Application for Further Review 2704-95-102450; classification of women’s shoes with textile and rubber/plastic upper; Preclassification decision 899806 of July 19, 1994

Dear Sir:

This is in response to protest number 2704-95-102450 with application for further review, timely filed by Rode & Qualey on behalf of their client, Pagoda Trading Company Inc., protesting your decision to classify three entries of their merchandise, a ladies’ dress shoe, as footwear with an outer sole of leather and an upper of textile materials.

FACTS:

The shoe at issue is a ladies’ shoe identified as “Jigsaw #2”. This shoe was the subject of a Preclassification Decision (PC) 899806 of July 19, 1994. In that decision, the shoe was classified as leather-soled footwear with uppers of other than leather or textiles, in subheading 6405.90.9000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

The shoe is a slip-on low heel pump. The shoe has a textile vamp and sides, plastic heel counter, plastic top line trim, a plastic one and a half inch plastic heel, and a leather sole. The textile upper has strips of plastic overlays all over the vamp and sides. The preclassification decision was based upon a belief that the external surface area of the upper (ESAU) consisted of 69.39 percent rubber/plastic material with the balance of textile material. The shoe was available and presented to Customs personnel at the time of the pre-classification. It was not apparent that the plastic components were merely overlays. The importer’s statement regarding the ESAU calculation was accepted by Customs personnel and not verified at the time of the preclassification.

Customs at Los Angeles examined a sample shoe from an entry and requested the Customs laboratory test the sample to determine the ESAU. The laboratory report indicates that excluding accessories and reinforcements, the ESAU of the shoe consists of 65.9 percent textile material and 34.1 percent rubber/plastic. When the accessories and reinforcements are included in the calculation, the ESAU is 34.6 percent textile material and 65.4 percent rubber/plastic.

ISSUE:

What is the proper classification of the footwear at issue, style Jigsaw #2?

Does the preclassification decision bind the Customs Service to accept classification of the merchandise in subheading 6405.90.9000, HTSUSA, for the subject entries?

LAW AND ANALYSIS:

Classification of goods under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRIs). 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 GRIs taken in order]."

Note 4(a), Chapter 64, defines the external surface area of an upper as follows:

Subject to Note 3 to this Chapter:

(a) 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 Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, the official interpretation of the Harmonized System at the international level, provide some guidance in the General EN for Chapter 64. General EN (D) to Chapter 64 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. * * * Prior to the Court of International Trade’s decision in High-Tech Sports, USA v. United States, Slip Op. 96-139, Slip Op. 97-24, Customs had taken the position that the term “accessories and reinforcements” included any material added to an otherwise completed upper material, and that calculations of the ESAU did not depend upon whether certain pieces were fastened to the sole. See Headquarters Ruling Letter (HQ) 088511, issued April 15, 1992. In HQ 960019, however, issued April 10, 1997, this office followed the Court of International Trade’s Hi-Tech rationale and classified cycling shoes with essentially complete nylon textile uppers under heading 6403, HTS, on the basis that the shoes’ leather overlays - which were lasted under and cemented to the sole of the shoes - were constituent materials of the upper (not accessories or reinforcements) which contributed structural strength to the shoe and provided support for the foot.

Counsel for the importer is not arguing the Hi-Tech decision is applicable in this case. The plastic overlay strips appear to fall squarely within the description in the EN to Chapter 64 (cited earlier) of accessories or reinforcements, i.e., in this case, ornamental strips, which are not part of the ESAU. Thus, based upon the Customs’ laboratory report, excluding accessories or reinforcements, the subject shoe, Jigsaw #2, with an ESAU consisting of 65.9 percent textile material, is classifiable in subheading 6404.20.6060, HTSUSA.

Counsel for the importer is arguing that the preclassification decision binds the Customs Service to accept classification of the merchandise in subheading 6405.90.9000, HTSUSA, for the subject entries as the preclassification decision has not been revoked. This argument presents some difficulties due to the circumstances of the preclassification and the responsibility of an importer to exercise reasonable care. Additionally, the technical nature and complexity of classification of this type of merchandise factors into our decision regarding the applicability of the preclassification decision to the merchandise which is the subject of this protest.

The merchandise at issue, Jigsaw #2, was classified in PC 899806 in subheading 6405.90.9000, HTSUSA, as a ladies’ shoe with a leather-sole and with an upper of other than leather or textiles. This classification was based upon a representation by the importer that the ESAU consisted of 69.39 percent rubber/plastic material with the balance of textile material. The importer provided a product specification sheet with a diagram of the shoe and a second diagram of just the front portion of the upper with various portions identified and a calculation of 69.39 percent rubber/plastic and 30.60 percent textile. The importer also had a shoe available for examination by the Customs personnel who rendered the preclassification decision. The conclusion of the importer as to the ESAU calculation (percent of textile and percent of rubber/plastics) of the shoe was inaccurate and on that basis it may be argued that the preclassification decision does not apply to the subject merchandise. Counsel for the importer argues that none of the information supplied by the importer was inaccurate. In so saying, he referred to the detailed specifications and the sample shoe. However, although the detailed specifications of the shoe indicated the portions of the shoe that were plastic/rubber and the portions that were textile (including surface area calcuations), there is no indication on the specification sheet that certain components were overlays as opposed to pieced-in components. Although a sample shoe was available for Customs’ examination at the time of the preclassification visit, Customs personnel accepted the importer’s calculation of the ESAU based upon the information presented in the specification sheet and did not elect to dismantle the shoe. The inclusion or exclusion of components in the calculation of the ESAU, counsel argues, is a legal determination which was not the responsibility of his client, but was Customs’ responsibility to determine.

From the information contained in the file and obtained from the National Import Specialist who participated in the preclassification decision at issue, it appears that the importer did not present the information regarding the ESAU with any indication that there was doubt as to its accuracy. In some cases, calculation of the ESAU is not a difficult matter, particularly in cases in which the components are pieced-in to form the upper in which case there is no issue as to whether the pieced components are included in the calculation of the ESAU; they are. In presenting the ESAU calculation to Customs personnel without indicating some question might exist as to whether it was accurate, the importer undertook a calculation he could have left for Customs to determine. But having provided the information to Customs, Customs accepted the information as accurate and based the classification of the shoe upon that information. Information presented at a preclassification visit and upon which preclassification decisions are based is always subject to verification by Customs. Such verification need not occur at the time of the preclassification visit.

The situation which occurred here is not unlike a situation in which an importer obtains a preclassification decision upon a garment stating that the garment is of fabric which is 65 percent polyester and 35 percent cotton; yet, upon importation of the goods it is discovered that in fact the garment is of fabric which is 65 percent cotton and 35 percent polyester. The argument that a garment sample was available and Customs could have verified the accuracy of the importer’s statement as to fiber content does not prevail to allow the importer to enter goods under an improper classification.

In this case, the importer provided a calculation of the ESAU of the shoe which was inaccurate because the importer included components in the calculation which should not have been included. The fact that a sample shoe was available and Customs could have verified the accuracy of the importer’s statement regarding the ESAU does not prevail to allow the importer to follow the preclassification decision based upon inaccurate information (the importer’s calculation of the ESAU). An importer should not benefit from its erroneous act which Customs accepted in good faith as accurate and correct. It is these types of after the fact arguments made by importers and their counsel that, in part, have placed the preclassification program in jeopardy of being eliminated.

HOLDING:

The shoe at issue, Jigsaw #2, is classified in subheading 6404.20.6060, HTSUSA, as footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: footwear with outer soles of leather or composition leather: Other: for women. The 1994 rate of duty applicable to the protested entries is 37.5 percent ad valorem.

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 or entries in accordance with the decision must be accomplished prior to mailing 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 to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

PC 899806 of July 19, 1994 is superseded with respect to the classification of “Jigsaw #2” by this decision.

Sincerely,

John Durant, Director

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