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HQ 960054




May 9, 2000

CLA-2 RR:CR:TE 960054 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 6002.20.1000

Port Director
U.S. Customs Service
1 East Bay Street
Savannah, Georgia 31401

RE: Decision on Application for Further Review of Protest No. 1703-96-100159, filed November 19, 1996, Concerning the Classification of Ladder Tape/String for Venetian Blinds; Open-work Fabric of Heading 6002; Not Article of Yarn

Dear Sir:

This is a decision on a protest timely filed on November 19, 1996, against your decision in the classification and liquidation of two entries of ladder tape (for venetian blinds) entered in 1996.

FACTS:

You classified the merchandise under subheading 6002.20.1000, HTSUSA, textile category 229, the provision for “Other knitted or crocheted fabrics: Other, of a width not exceeding 30 cm: Open-work fabrics, warp knit,” with a general column one duty rate (in 1996) of 15.6 percent ad valorem.

The protestant’s primary claim is that the goods should be classified not as an open-work fabric but as an article, in subheading 5609.00.3000, HTSUSA, the provision for “Articles of yarn, strip or the like of heading 5404 or 5405, twine, cordage, rope or
cables, not elsewhere specified or included: Of man-made fibers,” with a general column one duty rate (in 1996) of 8.1 percent ad valorem. In the alternative, protestant claims that the goods should be classified either in subheading 6307.90.4000, HTSUSA, the provision for “Other made up articles, including dress patterns: Other: Cords and tassels,” with a general column one duty rate (in 1996) of 5.8 percent ad valorem; or in subheading 6002.20.6000, HTSUSA, textile category 222, the provision for “Other knitted or crocheted fabrics: Other, of a width not exceeding 30 cm: Other: Of man-made fibers,” with a general column one duty rate (in 1996) of 8.4 percent ad valorem.

Although samples of the goods at issue have colors, dimensions, and features which vary somewhat, all samples consist of a component of venetian blinds known as “ladder tape” or “ladder string.” The merchandise is a warp-knitted narrow fabric composed of polyester yarn. It is made in various widths and is knitted into stable open meshes to form a ladder-like configuration. The merchandise is composed of two parallel lengths of knitted portions (each measuring approximately two millimeters in width) which run along the two edges of the fabric and resemble the two “upright” sides of a ladder. Between the two knitted upright portions are the “rungs,” which consist of pairs of yarns that connect the two upright portions. The rungs are made as part of the knitting process and are spaced at intervals of approximately two centimeters. The ladder tape is imported in fixed-length rolls of either 1,000 feet or 1,300 feet. After importation, the ladder tape is cut to specific sizes depending upon the dimensions of the slats of venetian blinds the ladder tape is designed to support.

ISSUE:

1) Whether for classification purposes, the merchandise constitutes a fabric or an article.

2) If the merchandise is a fabric, whether for classification purposes, the fabric constitutes an open-work fabric.

LAW AND ANALYSIS:

Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified
solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI.

To support the primary claim that the merchandise at issue should be classified under heading 5609, HTSUSA, as a complete or finished article of yarn, the protestant first cites to GRI 2(a), which, in pertinent part, states:

Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article.

The protestant maintains that, since the only post-importation processing performed by a fabricator of venetian blinds on the imported ladder tape is cutting it (with scissors) to the desired length (usually window length plus five inches), the ladder tape has the essential character of a finished article. Protestant contends that the ladder tape is an article knitted in the form of a number of items in a length and should be excluded from classification in chapter 60, by “the General Chapter Notes.” (Protestant appears to be referring to the EN to chapter 60 which on page 906 state, in part, that “fabrics knitted or crocheted to shape, whether presented as separate items or in the form of a number of items in the length are, however, excluded from this Chapter.” We find this EN to be inapplicable to the imported merchandise, however, since neither the beginning nor end points of individual items in the length may be discerned, a point more fully discussed below.) The protestant cites to numerous judicial authorities defining articles, noting that a fabric becomes an article when the identity of actual articles can be seen emerging with certainty, and that, according to the rule set forth in United States v. Buss & Co., 5 Ct. App. 110 (1914), a product is an article if, at the time of importation, its essential characteristics are defined and the product is so far advanced in manufacture as to be identifiable as the finished product. The protestant also claims that, to the extent that heading [sic] 5609.00.30 is not more specific that heading [sic] 6307.90.40, the ladder tape should be classified as a made up article of cord.

In Headquarters Ruling Letter (HQ) 957218, issued March 24, 1995, this office found that ladder tape which was imported in continuous lengths (also referred to as being imported “in the piece”) constituted a fabric, as opposed to an article created from
yarn. The merchandise was classified in subheading 6002.20.1000, HTSUSA. In finding that the ladder tape of HQ 957218 was not a “made up” or finished article, we cited to HQ 956965, issued December 13, 1994, and to HQ 954822, issued December 22, 1994, in which similar issues (i.e., whether the goods in question were classifiable as material or as parts) had been addressed, and in which we stated that the requirements of a two-pronged test must be satisfied to sustain a claim that merchandise, per se, qualifies as a finished article. The test itself is drawn from the rule set forth in Buss (cited by protestant above), which more fully states that:

The rule of decision is therefore established that where such articles are imported in the piece and nothing remains to be done except to cut them apart they shall be treated for dutiable purposes as if already cut apart and assessed according to their individual character or identity. This follows, however, only in case the character or identity of the individual articles is fixed with certainty and in case the woven piece in its entirety is not commercially capable of any other use. [Emphasis added.]

The two-pronged test drawn from Buss and applied in HQ 957218 was stated as requiring:

1) A dedication to use, such that the merchandise is produced in the finished state; the merchandise having no possible use other than that for which it has been dedicated; and

2) Set dimensions.

We went on to find that, because the ladder tape was imported in rolls without any lines of demarcation to identify the individual articles to be cut from the roll, the imported goods lacked dimensions that were “fixed with certainty.” The merchandise was therefore classified not as a finished article of yarn, but as a fabric.

In similar fashion, in the previously referenced HQ 956965, issued December 13, 1994, this office classified rolls of fabric to be used as upholstery for billiard tables. The fabrics were imported in the piece for the purpose of accommodating several sizes of billiard tables for various segments of the billiard industry. Acknowledging that judicial authority concerning these types of issues had been decided under the prior tariff, i.e., the Tariff Schedules of the United States (TSUS), we noted that such authority was nevertheless instructive, since both the TSUS and the HTSUS contained related
provisions for the classification of unfinished articles. As in HQ 957218 above, we discussed Buss. We then examined the analysis set forth in Coraggio Design, Inc. v. United States, 12 CIT 143 (1988), (a case also cited by the protestant) which addressed the classification of imported rolls of woven drapery fabric measuring 118 inches in width by 50 yards in length, and which incorporated a hem on the roll’s bottom portion. Despite the relatively advanced state of the fabric’s processing and the fact that the hem dedicated the fabric for use solely as a drapery (rendering it commercially unsuitable for any other use), the outline of individual drapes to be cut was not evident in the imported rolls. The Court stated:

The imported merchandise fails to satisfy the second requirement of Buss, however, since the addition of the hem does not fix the identity of an individual drapery with certainty. It is well settled that “no matter how close the importation is to the finished article or how dedicated it is to a single use, it remains a material until the identity of actual articles can be seen emerging with certainty from the undifferentiated material.” (Citations omitted.)

Applying the rationale of Buss and Coraggio Design to the facts of HQ 956965, we found that, since the billiard table fabrics had no lines of demarcation dedicating them to any particular table size or shape, none of the fabric had been processed to a point at which it could be regarded as a part for a finished table. Neither could the fabric be considered as an unfinished article possessing the essential character of a finished article pursuant to GRI 2(a). The imported goods were therefore classified as upholstery fabric of heading 5111, HTSUSA.

In Baxter Healthcare Corp. of Puerto Rico v. United States, 182 F.3d 1333 (Fed. Cir. 1999), the Court of Appeals for the Federal Circuit (CAFC) affirmed the decision of the Court of International Trade (CIT) in Baxter Healthcare Corp. of Puerto Rico v. United States, 998 F. Supp. 1133 (C.I.T. 1998). The CIT had held that Customs (in HQ 954822, issued December 22, 1994) had correctly classified merchandise identified as Oxyphan® (a hollow polypropylene filament imported on spools in lengths of ten kilometers) as a synthetic monofilament of heading 5404, HTSUSA, rather than as a part of an oxygenator (a device which mechanically oxygenates venous blood outside of the body). Customs had reasoned that the use of the merchandise as a “part” of an oxygenator could not be discerned at the time of import. Employing the two-pronged analysis discussed above, the CAFC stated:

Whether an imported item that is made into multiple parts after import is classifiable as “parts” of other articles under the HTSUS involves two questions. First, the item must be dedicated solely or principally for use in those articles and must not have substantial other independent commercial uses.[The Court found it undisputed that Oxyphan® had no commercial use other than making membrane oxygenators and was therefore “dedicated” to such use.] Second, if the item as imported can be made into multiple parts of articles, the item must identify and fix with certainty the individual parts that are to be made from it.

In Baxter, the Court noted that each ten-kilometer roll of monofilament contributed material to approximately four oxygenators. The exact length needed per oxygenator would not be known, however, until that particular oxygenator was made. Since individual parts could not be discerned from the spool (which contained no marks or other identifiers), the parts were not identifiable or fixed at the time of import. On this basis, the merchandise was classified as monofilament, rather than as a “part.”

We find that the analysis and rationale set forth in the rulings and court cases above are directly applicable to the facts and merchandise of the instant case. The ladder tape has no commercial use other than as a component of venetian blinds, and is therefore “dedicated” to such use. However, since the imported rolls of ladder tape contain no marks by which individual lengths used to construct specific venetian blinds may be identified, the imported item does not identify and fix with certainty the individual parts that are to be made from it. Like the billiard table fabric, the ladder tape fabric, the drapery fabric, and the monofilament discussed above, the ladder tape at issue lacks dimensions that are fixed with certainty at the time of import. The imported merchandise fails to satisfy the second of two requirements judicially cited as controlling in Baxter, Coraggio Design, and Buss. The merchandise is therefore not classifiable as an article under heading 5609 or heading 6307, HTSUSA. The goods constitute a knitted fabric that is classifiable under heading 6002, HTSUSA.

Protestant claims that, even if the merchandise is found to be classifiable as a knitted fabric, the merchandise is not an “open work” fabric. Citing “Fairchild’s Dictionary of Textiles,” which is said to define “open work” as “interstices in a ground of closer texture, often to form or enhance a pattern” in “embroidery, laces, knitting and crocheting,” protestant suggests that fabric classifiable as open-work fabric, must enhance a pattern or possess a decorative aspect. There is no such requirement in the HTSUSA. Additional U.S. Note 2 to chapter 60, HTSUSA, states only that:

For purposes of this chapter, the term “open-work fabrics” means fabrics with stable open meshes, whether or not containing inwrought designs.

As noted in the FACTS section above, the merchandise is a warp-knitted narrow fabric knitted into stable open meshes to form a ladder-like configuration. The ladder tape is classified in subheading 6002.20.1000, HTSUSA, textile category 229, the provision for “Other knitted or crocheted fabrics: Other, of a width not exceeding 30 cm: Open-work fabrics, warp knit,” with a general column one duty rate (in 1996) of 15.6 percent ad valorem. For classification rulings on similar merchandise, see also New York Ruling Letter (NY) B89918, issued September 30, 1997, NY 850563, issued March 23, 1990, and NY 839379, issued April 20, 1989.

HOLDING:

The ladder tape or ladder string is classified in subheading 6002.20.1000, HTSUSA, textile category 229, the provision for “Other knitted or crocheted fabrics: Other, of a width not exceeding 30 cm: Open-work fabrics, warp knit.” The general column one duty rate (in 1996) is 15.6 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 of the decision.

No later than 60 days from the date of this letter, 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 by other methods of public distribution.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories applicable to textile merchandise, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,


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