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HQ 560650





January 29, 1998

CLA-2 RR:TC:SM 560650 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.90

Port Director
U.S. Customs Service
797 S. Saragosa Rd.
El Paso, Texas 79907

RE: Application for Further Review of Protest No. 2402-96-100017; Denial of duty exemption under HTSUS subheading 9802.00.90 to tiebacks and chair-ties; Special Regime; findings; trimmings; yarn; Mexico

Dear Madam:

This is in reference to a protest and application for further review filed by Rudolph Miles & Sons, Inc. on behalf of Conso Products Company, ("Conso"), contesting the denial of the duty exemption under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS), to tiebacks and chair-ties.

FACTS:

It is indicated that protestant imported tiebacks and chair-ties from Mexico under subheading 9802.00.90, HTSUS, on April 10, 1996. A Notice of Action dated May 10, 1996, was supplied to protestant informing it that Customs proposed to liquidate the entry under subheading 5808.90.00, as the tiebacks and chair-ties do not contain any fabric. The protest was timely filed on July 8, 1996.

Your office indicated by telephone that the tiebacks and chair-ties are made of yarn of U.S. origin and are assembled into a tassel form in Mexico. Other than the yarn, your office states that there is no other material in the tieback or chair-tie.

ISSUE:

Whether the subject tiebacks and chair-ties are eligible for duty-free entry under subheading 9802.00.90, HTSUS.

LAW AND ANALYSIS:

Appendix 2.4 of Annex 300-B of the NAFTA, provides that:

[o]n January 1, 1994, the U.S. shall eliminate customs duties on textile and apparel goods that are assembled in Mexico from fabrics wholly formed and cut in the United States and exported from and reimported into the United States under:

(a) U.S. tariff item 9802.00.80.10; or
(b) Chapter 61, 62, or 63 if, after such assembly, those goods that would have qualified for treatment under 9802.00.80.10 have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing.

Thereafter, the U.S. shall not adopt or maintain any customs duty on textile and apparel goods of Mexico that satisfy the requirements of subparagraph (a) or (b) or the requirements of any successor provision to U.S. tariff item 9802.00.80.10.

Consequently, subheading 9802.00.90, HTSUS, was created to provide for the duty-free entry of:

Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, provided that such fabric components, in whole or in part, (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process; provided that goods classifiable in chapters 61, 62, or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein.

The initial question is whether the subject tiebacks and chair-ties are considered "textile and apparel goods" under subheading 9802.00.90, HTSUS. The alternative classification of the tiebacks and chair-ties as stated by your office is subheading 5808.90.00, HTSUS. "Textile and apparel goods" eligible for duty-free treatment under subheading 9802.00.90, HTSUS, are listed in Appendix 1.1 of Annex 300-B of the NAFTA. Chapter 58 of Appendix 1.1 includes among such goods "5808.90 Ornamental trimmings in the piece, other than knit; tassels, pompons and similar articles"). Therefore, the tiebacks and chair-ties qualify as "textile and apparel goods" eligible for duty-free treatment under subheading 9802.00.90, HTSUS.

Your office states that in order to be eligible for subheading 9802.00.90, HTSUS, the articles must be made of fabric, and the documentation requirements under the old Special Regime Program (9802.00.8010), i.e., a cutting ticket and a mill invoice, need to be supplied to Customs. Since your office states that the tiebacks and chair-ties do not contain fabric, your office contends that they should be classified under subheading 5808.90.10, HTSUS. Protestant contends that subheading 9802.00.90, HTSUS, is not only limited to textile and apparel products containing "fabric", but rather if there is any fabric component in the textile or apparel product it must be U.S. formed and cut to pattern. Protestant, states that the statute provides for "textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut...", and therefore, claims that its articles "of yarn" are not disqualified from 9802.00.90 treatment.

Reviewing prior rulings, it does not appear that Customs has decided whether textile and apparel goods which do not contain any fabric components may be eligible for the duty treatment provided for under subheading 9802.00.90, HTSUS, or for that matter under the former Special Regime Program. Customs has allowed luggage (listed in Appendix 1.1 of Annex 300-B of the NAFTA) which contained components that were neither fabric nor findings or trimmings to be eligible under subheading 9802.00.90, HTSUS, in Headquarters Ruling Letter (HRL) 557875 dated May 4, 1995; however, the luggage did contain fabric components. See also HRL 559961 dated March 3, 1997, where Customs held that motor vehicle safety belts made with certain fabric and non-textile components, such as frames, supports, etc. of U.S. and foreign manufacture were eligible for subheading 9802.00.90, HTSUS, treatment.

Presidential Proclamation No. 6821 of September 12, 1995, corrected subheading 9802.00.90, stating that Presidential Proclamation No. 6641 of December 14, 1993, which established subheading 9802.00.90, inadvertently narrowed this tariff provision to only allow duty-free entry to textile and apparel goods assembled in Mexico "in whole of fabrics wholly formed and cut" in the U.S. Accordingly, it is clear that while textile and apparel goods do not have to be composed in whole of fabrics wholly formed and cut, this modification implies that some form of fabric is required in the textile and apparel good in order to be considered eligible for duty-free treatment under subheading 9802.00.90, HTSUS.

By restating the beginning of subheading 9802.00.90, HTSUS, it is our understanding that protestant is attempting to rely on the words "in which all fabric components" to support their contention that textile and apparel goods need not necessarily contain any fabric components. It is a basic tenet of statutory construction that courts should refrain from construing a statutory provision in a way that renders meaningless another provision within the same statute. See United States v. Phipps, 81 F.3d 1056, 1060 (1996), citing Ratzlaf v. United States, 510 U.S. 134 (1994). In this regard, protestant's reading of the statute, in particular the phrase "in which all fabric components", would render all of the statutory requirements of subheading 9802.00.90, HTSUS, meaningless, and would mean that as long as the good is considered a textile and apparel good assembled in Mexico, the good would receive duty-free treatment. Certainly such liberal duty-free treatment for textile and apparel goods is not what Congress intended. Furthermore, this would contradict the legislative history of subheading 9802.00.90 and the intent of the NAFTA parties under Appendix 2.4, Annex 300-B, NAFTA, to eliminate customs duties on textile and apparel goods that are assembled in Mexico "from fabrics". Additionally, the predecessor provision, the Special Regime Program, similarly required that fabric be used. Accordingly, we find that in order to be eligible for duty-free treatment under subheading 9802.00.90, HTSUS, the textile and apparel good must be assembled using fabric components. As the tiebacks and chair-ties are not composed of any fabric components, they are not eligible for subheading 9802.00.90, HTSUS, treatment.

HOLDING:

Subheading 9802.00.90 requires textile and apparel goods to be assembled using at least in part some fabric components. Since the tiebacks and chair-ties are not composed of any fabric components, they are not eligible for subheading 9802.00.90, HTSUS, treatment. Accordingly, this 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, this decision should be attached to Customs Form 19, Notice of Action, and be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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