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HQ 965177




August 29, 2002

CLA-2-42: RR: CR:TE 965177 JFS

CATEGORY: CLASSIFICATION

TARIFF NO.: 6402.99.70

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

RE: Decision on Application for Further Review of Protest No. 2704-01-101368; Classification of Youths’ and Misses’ Athletic Footwear; Customs Laboratory Results, Presumption of Correctness.

Dear Port Director:

This is a decision on an application for further review (AFR) of a protest timely filed on May 17, 2001, by Grunfeld, Desiderio, Lebowitz & Silverman, LLP, on behalf of E.S. Originals, Inc. The protest concerns the classification and liquidation of an entry of youths’ and misses’ athletic shoes, entered on June 16, 2000.

FACTS:

You classified the footwear, style YY645-0, in subheading 6402.99.70, Harmonized Tariff Schedule United States Annotated (HTSUSA), the provision for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Valued over $3 but not over $6.50/pair” with a general column one duty rate of 90 cents per pair, plus 37.5 percent ad valorem.

The protestant claims that the footwear is classified under subheading 6402.99.18, HTSUSA, which is the provision for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Having uppers of which over 90 percent of the external surface area (including any accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is rubber or plastics (except footwear having a foxing or a foxing-like band applied or molded at the sole and overlapping the upper and except footwear designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather): Other: Other” with a general column one duty rate of 6 percent ad valorem.

Style YY645-0 is a youth’s/misses’ below the ankle, lace-up athletic shoe. It has looped textile strap eyelets, a textile pull-tab at the back or heel portion of the upper and a rubber outer sole. 64,944 pairs of the shoe were imported under the subject entry, sizes 9 youths to 3 misses. Customs issued a Customs Form (CF) 28, dated September 11, 2000, requesting that the protestant submit samples (one pair) of the shoe. The import manager for the protestant, upon receiving the CF 28, selected a size nine (youths) shoe from a carton that was part of the entry in question and sent it to Customs.

The protestant submitted an affidavit from their import manager attesting to the fact that the samples selected were from the entry at issue. For purposes of this ruling, Customs is treating his statement as if it were fact.

A Customs laboratory analyzed the shoe and concluded that the external surface area of the upper is 92.1% rubber or plastic, excluding accessories and reinforcements, and 89.5% rubber or plastics including accessories and reinforcements. The report states that “if further tests are conducted, the average of the measurements has a probability of only 0.04% to fall above the 90% cutoff.”

The protestant hired a private laboratory to conduct examinations of the shoe. According to the import manager, one shoe of each of the remaining sizes was removed from the same carton as the shoe that was sent to Customs and was sent to their private lab for analysis. The results are as follows:

Lab Report No.

Size
% of Rubber/Plastics in ESAU
(Including Accessories & Reinforcements)
N61285-Revised
One of the issues in this case is whether the portion of the pull-tab at the heel of the shoe that is above the collar line, is included in the measurement of the ESAU. Therefore, the lab calculated the percentage of the ESAU composed of rubber and plastics, not counting the portion of the pull-tab above the collar. The measurement was 90.62%. 89.82
N61307
10
90.40
N61308
11
90.38
N61309
12
91.82
N61310
13
92.66
N61311
1
91.75
N61286
2
91.85
N61312
3
92.53

Each of the lab reports state the following:

REASON FOR ANALYSIS: Test and evaluation of the sample to determine the percent by area of materials used in the exterior surface of the upper under HTSUS guidelines. The Hi-Tec ruling, Slip Opinion 96-139, is followed when applicable. The ruling is interpreted that any piece lasted or attached to a lasted piece and provides structural integrity is included as part of the upper. U.S. Customs Laboratory Method 64 01 was used as a guideline for area measurements with the polar planimeter.

ISSUES:

1. Whether that portion of the pull-tab that is above the collar line of the shoe is considered accessories and reinforcements?

2. Whether the Customs Laboratory results obtained from a size nine youth’s shoe should be applied to the other sizes of the shoe that were part of the same entry?

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.

1. Whether that portion of the pull-tab that is above the collar line of the shoe is considered accessories and reinforcements?

Among other merchandise, chapter 64, HTSUS, covers footwear, gaiters and the like, and parts of such articles. Concerning uppers which consist of two or more materials, note 4(a) to chapter 64 states that:

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.

Subheading 6402.99.18, HTSUSA, provides, in pertinent part, for:

Other footwear with outer soles and uppers of rubber or plastics: Other footwear:
Other:
Having uppers of which over 90 percent of the external surface area (including any accessories or reinforcements such as those mentioned in note 4(a) to this chapter). Emphasis added.

The protestant asserts that the portion of the pull-tab at the heel of the shoe that is higher than the shoe’s collar should not be considered accessories and reinforcements, or as part of the constituent material of the upper. As a result, it should not be included when determining the constituent material of the ESAU. To support this argument, the protestant reasons that the upper portion of the pull-tab is on a different plane than the rest of the shoe and therefore is not factored into the calculation. The protestant contends that this position is consistent with prior Customs rulings excluding from the ESAU determination components that are on a plane lower than a portion of the upper. The protestant cited: Headquarters Ruling Letter (HQ) 083105, dated March 10, 1988, wherein Customs excluded the tongue and shoelaces; HQ 089265 dated August 27, 1991, wherein Customs excluded a gusset on the front of a boot shaft; and HQ 084574, dated November 30, 1989, wherein Customs excluded a bellows type tongue.

Customs rejects the protestant’s argument. In all of these rulings, the components were excluded because they were on a plane lower than a portion of the upper and they were partially or wholly covered by a portion of the upper or other component of the shoe. In HQ 958590, dated October 26, 1999, Customs stated:

It is Customs position that the tongue or flap of footwear which extends upward from the top line of the shoe and is visible and tactile is included in the calculation of the exterior surface of the upper. T.D. 84-59, 18 Cust. B. & Dec. 166 (January 11, 1984). It has consistently been Customs position that the exterior surface area of the upper is whatever is visible and tactile on the surface excepting such things as buttons, strips and other loosely attached appurtenances. In those cases where the tongue was held not to be part of the exterior surface area of the upper, it was on a plane lower than a portion of the upper and was partially or wholly covered by laces and eyelet facings or strays.

Emphasis added.

The reasoning in HQ 958590 rejects the protestant’s arguments on two fronts. First, Customs included that portion of the tongue that extended upward from the top line of the shoe in its ESAU determination. Customs did not exclude this portion of the tongue merely because it extended higher than the collar of the shoe as the protestant is asking Customs to do in the protest at hand. Second, the portion of the tongue excluded by Customs, was that portion on a plane lower than the upper, which was partially or wholly covered. In this case, the entire pull-tab is not on a lower plane, is visible and tactile, and is not partially or wholly covered. Accordingly, the entire pull-tab is considered an accessory and is added into the calculation of determining the ESAU. See also HQ 087788, dated February 26, 1991; HQ 950402, dated December 18, 1991; HQ 084013, dated March 26, 1990; and HQ 083059, dated December 5, 1989.

2. Whether the Customs Laboratory results obtained from a size nine youth’s shoe should be applied to the other sizes of the shoe that were part of the same entry?

Pursuant to 28 U.S.C. § 2639 (a) (1) (1994), Customs enjoys a statutory presumption of correctness. Thus, an importer has the burden to prove by a preponderance of the evidence that a Customs decision was incorrect. Ford Motor Company v. United States, 157 F.3d 849, 855 (Fed. Cir. 1998). Furthermore, “[i]t is well settled that the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct.” Aluminum Company of America v. United States, 60 C.C.P.A. 148, 151, 477 F.2d 1396, 1398 (1973) (hereinafter Alcoa). However, this presumption may be rebutted by showing that such methods or results are erroneous. The protestant cites Consolidated Cork Corp. v. United States, 54 Cust. Ct. 83, 86, C.C. 2512 (1965) for the proposition that the presumption of correctness may be “rebutted by showing that the testing methods or results are erroneous, or upon contrary relevant and material proof offered by the importer.” Protestant’s memo, p. 3. “Contrary relevant and material proof offered by the importer” is not one of the methods, according to the court in Consolidated cork, to rebut the presumption of correctness. Exxon Corp. v. United States, 462 F. Supp. 378, 382, 81 Cust. Ct. 87, 91, (1978). “If a prima facie case is made out, the presumption is destroyed, and the Government has the burden of going forward with the evidence.” Alcoa, 477 F.2d at 1399.

The protestant does not question the results achieved by the Customs Laboratory. Indeed, the likelihood of the Customs results being incorrect is slight. Because the shoe missed the 90% threshold by such a small amount, the Customs laboratory had three different analysts examine the shoe four times for a total of twelve examinations. None of the results showed that the ESAU of the shoe was over 90% rubber or plastics. Instead of contesting the results or methods utilized by Customs, the protestant argues that: “Customs testing of a single sample, size 9, out of 64,944 pairs does not provide a sufficient basis to reclassify shoes of the same style in sizes 10-3.” The protestant cites Target Stores Division of Dayton Hudson Corporation v. United States, Slip-Op. 00-111 Ct. Int’l Trade (August 29, 2000), in support of its argument. However, in Target, the court merely states that partial summary judgment is appropriate to the sizes that Customs agree should be reliquidated. The court provides no additional analysis or factual development. Thus, Target holds no precedential value and is not relevant. The protestant provides lab results from its own lab to show that the other size shoes had an ESAU, including accessories or reinforcements, that was over 90% rubber or plastics.

In cases such as this, where an outside report is submitted that differs from the Customs laboratory report, the Customs laboratory report cannot be disregarded and takes precedence over the outside report. See, HQ 957282, dated March 28, 1995 (citing Customs Directive 099 3820-002, dated May 4, 1992). Customs cannot rely on outside reports, which may or may not utilize different testing methods and still remain consistent in its tariff classification. In administering the HTSUS, and in order to classify footwear consistently, the same laboratory analysis must be executed throughout Customs. Customs cannot rely on outside reports that may or may not utilize different testing methods and still remain consistent in its tariff classification. Therefore, Customs must rely on its own laboratory analysis when determining the proper tariff classification of merchandise and need not consult an independent laboratory. See HQ 963748, dated November 20, 2000.

The rationale for the above-stated policy is exemplified by the facts of this case. In order to accept the results produced by the protestant’s lab, Customs would have to assume that the protestant’s laboratory measured the exact same components and utilized the exact same methods. There is a degree of subjectivity in determining what materials are part of the upper and, therefore, which portions of the upper are factored into the calculation of the ESAU. That there are possible variances, although small, in how to determine the ESAU, is supported by the protestant’s own lab reports. The reports state that:

The Hi-Tec ruling, Slip Opinion 96-139, is followed when applicable. The ruling is interpreted that any piece lasted or attached to a lasted piece and provides structural integrity is included as part of the upper. U.S. Customs Laboratory Method 64 01 was used as a guideline for area measurements with the polar planimeter.

The fact that the report uses modifying language such as “followed when applicable” and “used as a guideline” demonstrates that there is an inherent degree, of subjectivity when determining the ESAU.

As the protestant’s lab results show, the inclusion or exclusion of one very small piece of textile can put the results over the 90 percent threshold. Lab report N61285-Revised, size 9-½ shoe, measured the ESAU under two scenarios. In the first scenario, the entire textile pull-tab was counted and the ESAU was 89.82% rubber or plastic. In the second scenario, all of the textile pull-tab except that portion that extended above the collar of the shoe was counted and the ESAU was 90.62% rubber or plastic. This portion of the pull-tab is approximately one inch long and ½ inch wide, and accounted for 0.8% of the ESAU, yet it was enough to get over the 90% threshold. The pull-tab consists of a piece of material that is folded over to form a loop. The measurements provided are an approximation only and were not taken by the Custom Laboratory. The measurements were derived by measuring the portion of the folded pull-tab that extends above the collar and then multiplying that measurement by two. This demonstrates how if the protestant’s analyst included or excluded a small piece of rubber, plastic or textile in its ESAU calculation, and Customs treated that same material oppositely, then the protestant’s results will be uniformly different from the Customs results, regardless of the size of the shoe tested.

The other prong of the protestant’s argument is that the Customs sample is not representative of the entire entry. Since importers often complain when movement of their containers is delayed for the taking and testing of samples, Customs will generally request one sample that is representative of all the shoes of a particular style included in a shipment. In this case, the sampled shoe was sent to Customs in response to a Request for Information. Customs treated the shoe selected by the protestant as being representative of all of the shoes of that style in the shipment. To treat the shoe otherwise, would require Customs to obtain many samples to ensure that the samples are fully representative of the entire entry. In this case, the protestant is requesting Customs to consider each size of the shoe separately. It is not clear from the entry documents how many pairs of each size were entered. However, assuming there were 9 sizes entered, and that each size, there were 7,216 pairs of each size shoe in the entry. A statistically representative sample requires that approximately thirty samples be obtained for each size shoe and there were 9 sizes imported. Customs is not including some of the half sizes that were imported. That means Customs would have to sample and test approximately 270 shoes for one entry of one style of shoe. This would create an unworkable burden for the trade and on Customs.

Moreover, assuming that the shoe tested is the only shoe that differs from the other shoes, it is just as likely that the importer will benefit from the Customs findings. For instance, if the shoe tested by Customs was the only shoe that met the 90% rubber or plastics threshold, then the importer would have greatly benefited as to the remaining shoes. However, the importer would not have protested the liquidation.

HOLDING:

The Protest should be denied. The footwear, style YY645-0, should be classified in subheading 6402.99.70, Harmonized Tariff Schedule United States Annotated (HTSUSA), the provision for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Valued over $3 but not over $6.50/pair” with a general column one duty rate of 90 cents per pair, plus 37.5 percent ad valorem.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, Revised Protest Directive, dated August 4, 1993, a copy of this decision attached to Customs Form 19, Notice of Action, should be mailed by your office to the protestant no later than 60 days from the date of this decision. Since there are no reliquidations involved in this protest, you should be able to accomplish this direction prior to the 60 day period. Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this decision available to Customs personnel, and to the general 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.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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