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HQ 951383

April 21, 1992

CLA-2 CO:R:C:T 951383 SK


Louis S. Shoichet
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd floor
New York, N.Y. 10036

RE: Detrimental reliance on NYRL 852673 (6/11/90); original classification of hood scarves under heading 6117, HTSUSA; reclassification under heading 6505, HTSUSA; effective date of HRL 950559, which revokes NYRL 852673, delayed; 19 CFR 177.9(d)(3);

Dear Mr. Shoichet:

This is in reply to your letter of March 19, 1992, on behalf of your client, Berkshire Fashions, Inc. (hereinafter "Berkshire"), in which you claim that your client relied to its detriment on New York Ruling Letter (NYRL) 852673, dated June 11, 1990.

In Headquarters Ruling Letter (HRL) 950559, dated February 18, 1992, Customs revoked NYRL 852673 and reclassified 100% acrylic hood scarves under heading 6505.90.6090, HTSUSA, which provides for other headgear dutiable at a rate of 39.7 cents per kilogram plus 14.1% ad valorem and subject to quota category 659. The articles had previously been classified in NYRL 852673 under heading 6117, HTSUSA, which provides for other made-up clothing accessories dutiable at a rate of 12% ad valorem with an attendant quota category of 659.

After receiving NYRL 852673, Berkshire contacted overseas manufacturers for the purpose of negotiating a contract for the manufacture of hood scarves. On December 23, 1991, the importer entered into a contract with Begonia Enterprises Company, Ltd. in Taiwan to purchase 40,000 dozen hood scarves at $25.20 per dozen for a total purchase price of $1,008,000 (the landed duty paid figure), to be delivered between the months of March, 1992 and September 30, 1992. You claim that your client acted reasonably and in good faith in its reliance on NYRL 852673, both when pricing the merchandise and in assuming the proper quota category would be 659-O from China.

Under 19 CFR 177.9(d)(3), the effective date of a ruling letter that revokes an earlier ruling may be delayed for a period of up to ninety days, provided that the party seeking delay can demonstrate to the satisfaction of the Customs Service that reliance on the revoked ruling was reasonable and such reliance was detrimental.

After reviewing the information submitted, it is Customs' position that Berkshire suffered a detriment in that the hooded scarves contracted for prior to the revocation of NYRL 852673 are now subject to a higher rate of duty. Reliance on the tariff rate and quota category set forth in NYRL 852673 was reasonable inasmuch as there had been no subsequent modification or revocation of this ruling until after Berkshire had already entered into purchase agreements and committed to resale prices for the goods in the United States. Berkshire is not deemed to have been put on notice of any change in the classification of these articles until the issuance of HRL 950559 on February 18, 1992. The prerequisite for relief under 19 CFR 177.9(d)(3) has been satisfied, however any relief provided by Customs shall not extend to purchase orders placed after February 18, 1992.

Based upon your submission, the effective date of HRL 950559 is delayed by ninety (90) days (i.e., no later than May 18, 1992). The effective date of HRL 950559 may not be delayed until June 30, 1992, as per your request, because Section 177.9(d)(3) of the Customs Regulations, set forth supra, specifically limits such delays for a period up to 90 days from the date of issuance. Accordingly, through May 18, 1992, these goods are to be granted entry under the classification for other made-up clothing accessories in heading 6117, HTSUSA, with an applicable rate of duty of 12% ad valorem and quota category of 659.

This action is being taken in accordance with 19 CFR 177.9(d)(3) and 19 CFR 177.9(e)(1). Any questions concerning this letter should be directed to the Textile Classification Branch, office of Regulations and Rulings, at (202) 566-8181.


John Durant, Director
Commercial Rulings Division

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