United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2000 HQ Rulings > HQ 561660 - HQ 961050 > HQ 960242

Previous Ruling Next Ruling
HQ 960242




February 23, 2000

CLA-2 RR:CR:TE 960242 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 6404.19.3540

Port Director
U.S. Customs Service c/o Protest and Control Section
477 Michigan Avenue
Detroit, Michigan 48226

RE: Decision on Application for Further Review of Protest No. 3801-96-104833, filed November 7, 1996, concerning the classification of unassembled footwear and the assessment of marking duties

Dear Sir:

This is a decision on a protest timely filed on November 7, 1996, against your decision in the classification and liquidation of, and the assessment of marking duties on, footwear entered in August 1993.

FACTS:

You classified the merchandise under subheading 6404.19.7030, HTSUSA, the provision for “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: Other: Valued over $3 [three dollars] but not over $6.50/pair [six dollars fifty cents per pair]: Other, Other: For men,” with an applicable duty rate of 45¢/pr. [45 cents per pair] plus 18.7 percent ad valorem. You also assessed marking duties equal to 10
percent of the value of footwear identified by style number 701843, which was determined to be not legally marked as to the country of origin because the marking on the inside of the sole would be concealed upon attachment of the sole to the upper.

The protestant claims that the goods should be classified in two provisions, those being, subheading 6406.10.9090, HTSUSA, the provision for “Parts of footwear (including uppers whether or not attached to soles other than outer soles): Uppers and parts thereof, other than stiffeners: Other: Other: Other: Other, Other,” with an applicable duty rate of 4.5 percent ad valorem; and subheading 6406.20.0000, HTSUSA, the provision for “Parts of footwear (including uppers whether or not attached to soles other than outer soles): Outer soles and heels, of rubber or plastics,” with an applicable duty rate of 2.6 percent ad valorem. The protestant also asserts that, because the goods require further manufacturing, they are properly classified as “parts of footwear” which requires that only the cartons in which the parts are packed to be marked “made in Canada.”

The merchandise at issue, identified by style numbers 793005, 793011, 701837, 701843, 701860, and 793004, essentially consists of matching vamp/sole combinations which constitute 12,576 pairs of unassembled slippers. There are no excess components. The slipper components are to be assembled in the United States. All six styles consist of uppers composed of textile materials and outer soles composed of molded rubber/plastics. Style nos. 793005 and 793011 have open heels. Although the remaining four styles do not have open heels, they feature no closures and no eyelets or loops by which laces or bows might be held in place. Any bows that may be added to the uppers would appear to be essentially decorative and nonfunctional in holding the slipper to the foot.

Style no. 701843 is marked “Made in Canada” only on the inside of the outer sole, a location which will not be visible after the sole is assembled to the upper. There is no indication or claim that placement of the marking on the outside of the outer sole, or at various locations on the vamp, would not survive assembly processes.

ISSUES:

1) Whether the pairs of matching vamps and soles have the essential character of complete or finished footwear that is entered unassembled.

2) Whether marking duties were properly assessed.

LAW AND ANALYSIS:

CLASSIFICATION ISSUE:

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.

As noted above, classification is made in accordance with the GRI and the terms of the headings with the guidance of the EN to understand the scope of the headings and GRI. Heading 6406, HTSUSA, covers “Parts of footwear (including uppers whether or not attached to soles other than outer soles); removable insoles, heel cushions and similar articles; gaiters, legging and similar articles and parts thereof.” EN (A)(7) to heading 6406 indicates that the parts of footwear covered by the heading include:

Assemblies of parts (e.g., uppers, whether or not affixed to an inner sole) not yet constituting nor having the essential character of footwear as described in headings 64.01 to 64.05.

Heading 6404, HTSUSA, covers “Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials.” Since the first issue to be determined is whether the imported merchandise constitutes or has the essential character of footwear, as opposed to parts of footwear, we next look to GRI 2(a), which 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. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

EN (I), (V), (VI), and (VII), to GRI 2(a), are particularly helpful in understanding the scope of GRI 2(a) as it applies to the imported merchandise. The EN contain the following guidance:

(I) The first part of Rule 2(a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.

(V) The second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.

(VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule.

(VII) For the purposes of this Rule, “articles presented unassembled or disassembled” means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved.

No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to any further working operation for completion into the finished state.

Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately.

Examination of the subject merchandise reveals that, although the vamps and soles may be viewed as an assembly of parts, it is an assembly having the essential character of footwear. As the EN to heading 6406 above indicate, such goods are not covered by heading 6406. Although Customs has no specific information as to the particular fixing devices and post-importation assembly operations to be used, it is clear that only fixing devices and assembly operations (as opposed to any further working operations) will be required to assemble these components into finished slippers that are classifiable under heading 6404, HTSUSA.

The protestant contends that Headquarters Ruling Letter (HQ) 954251, issued June 14, 1993, supports its claim that the imported goods constitute parts of footwear. One of the skin diving boots at issue in that ruling was reclassified as “parts of footwear” in subheading 6406.10.90, HTSUSA. Unlike the unassembled slippers at issue in this case, however, the skin diving boot was imported without a sole (although a rubber/plastic sole would be attached to the boot after importation). This office ascertained that there was no market for such skin diving boots without attached soles, and that therefore, the principal use of the imported merchandise was as parts of footwear. In light of the above, we find that the 12,576 pairs of vamp/sole combinations constitute unassembled slippers which have the essential character of the finished goods. However, since none of the footwear has foxing-like bands, and all of the footwear either has open heels or is of the slip-on type, held to the foot without the use of functional laces, buckles, or other fasteners, the footwear is classified in subheading 6404.19.3540, HTSUSA.

MARKING ISSUE:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Section 1304(h) provides that 10 percent marking duties shall be levied, collected and paid if an imported article is not properly marked with the country of origin at the time of importation and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.34, Customs Regulations (19 CFR § 134.34), allows a port director to authorize repacking of imported articles under Customs supervision, in containers that would indicate their origin to an ultimate purchaser in the United States. Section 134.35(b), Customs Regulations (19 CFR § 134.35(b)), provides that a good of a NAFTA country which is to be processed in the United States in a manner that would result in the good becoming a good of the U.S. under the NAFTA Marking Rules is excepted from marking. Section 134.51, Customs Regulations (19 CFR § 134.51), provides that when articles or containers are found upon examination not to be legally marked, the port director shall
notify the importer on Customs Form (CF) 4647 to arrange with the port director’s office to properly mark the article or container or to return all released articles to Customs custody for marking, exportation or destruction. Section 134.52, Customs Regulations (19 CFR § 134.52), allows a port director to accept a certification of marking supported by samples from the importer or actual owner in lieu of marking under Customs supervision if specified conditions are satisfied.

As noted by the United States Customs Court in A.N. Deringer, Inc. v. United States, 51 Cust. Ct. 21, C.D. 2408 (1963):

Those who import goods into the United States accept certain responsibilities that have been laid on them by Congress. One such responsibility, and an important one, is to see that imported merchandise of foreign origin is properly marked to show the country of origin, before it enters into the commerce of the United States.

In Headquarters Memorandum 731775, dated November 3, 1988, Customs ruled that two prerequisites must be present for Customs to properly assess marking duties under 19 U.S.C. § 1304(f). The prerequisites are: 1) that the merchandise was not legally marked at the time of importation; and 2) that the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.

In this case, we find that both of the prerequisites set forth above are present. The unassembled footwear identified by style no. 701843 was not legally marked at the time of importation and the merchandise was not subsequently exported, destroyed, or marked under Customs supervision prior to liquidation. The protestant does not claim that the United States is the correct country of origin of the goods, that the slippers were repacked under Customs supervision, or that any other exception provided for under 19 CFR Part 134 is applicable to the facts of this case. We therefore find that, with respect to style no. 701843, the assessment of marking duties under 19 U.S.C. § 1304 was proper.

HOLDING:

The unassembled footwear identified by style nos. 793005, 793011, 701837, 701843, 701860, and 793004, are classified in subheading 6404.19.3540, HTSUSA, the provision for “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 with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners: Other, Other: For men.” The general column one duty rate (in 1993) is 18.7 percent ad valorem.

The assessment of marking duties under 19 U.S.C. § 1304 with respect to style no. 701843 was proper.

The protest should be DENIED, except to the extent that reclassification of the merchandise as indicated above results in a partial allowance. 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.

Sincerely,


Previous Ruling Next Ruling

See also: