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 546588 - HQ 561395 > HQ 561069

Previous Ruling Next Ruling
HQ 561069

December 6, 1999
RR:CR:SM 561069 CW


TARIFF NO.: 9802.00.80

Port Director
U.S. Customs Service
PO Box 3130
Laredo, TX 750443130

RE: Decision on Application for Further Review of Protest No. 230498100016; 19 CFR 10.25; foreign fabric cut to length and/or width in the U.S.

Dear Port Director:

This protest was filed against your decision in the liquidation on December 19, 1997, of an entry of comforters from Mexico as dutiable under subheading 9404.90.8505, Harmonized Tariff Schedule of the United States (HTSUS). The comforters were assembled in Mexico and entered by the Quilt Gallery, Inc. of Easley, South Carolina, under subheading 9802.00.8065, HTSUS.


Fabric was imported from China in an unbleached state by a U.S. mill which printed a pattern on the fabric. The Quilt Gallery of Easley, South Carolina, purchased rolls of this printed fabric from the mill and cut it into square or rectangular pieces no larger than six inches in any dimension. These pieces were shipped to Mexico where they were assembled with various other components such as fiber (batting/fill made in Taiwan) and a backing material woven in the U.S. to create comforters. Protestant states that the U.S.-made fabric comprising the backing of the comforter was shipped to Mexico in rolls where it was cut to the appropriate length for twin, full, queen or King size comforters.

An entry of these comforters, assembled from such components, was made at the port of Laredo, Texas, on November 6, 1996. The cost of the printed fabric square or rectangular components cut from foreign fabric and the U.S.-made backing material was claimed to be entitled to a duty allowance under subheading 9802.00.8065, HTSUS. Your office disallowed the claim for a duty allowance for the cost of the pieces and backing material under subheading 9802.00.8065, HTSUS, and sent a rate advance notice (CF 29) on November 25, 1997, stating that the comforters are fully value dutiable under subheading 9404.90.8505, HTSUS. The importer's claim was disallowed for the printed fabric pieces on the basis that 19 CFR 10.25 does not permit subheading 9802.00.80, HTSUS, treatment for foreign fabric cut merely to length and width or both in the U.S. Although the Customs Protest and Summons Information Report submitted from your office in connection with this case does not address the backing material, we understand from discussions with the import specialist handling the transaction that his concern was that the U.S.-made fabric may have been cut both to length and width in Mexico prior to the assembly process.

The entry was liquidated on December 12, 1997. A protest was timely filed on March 11, 1998, with a request for further review pursuant to 19 CFR 174.25. Laredo Customs determined that the protest was eligible for further review. This is the response of Customs Headquarters to the request for further review of the protest.


Are the comforters described above entitled to a partial exemption from duty under subheading 9802.00.80, HTSUS?


Subheading 9802.00.8065, HTSUS, provides a partial duty exemption for:

Articles, except goods of heading 9802.00.90, assembled abroad in whole or in part, of fabricated components, the product of the United States, which (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 such as cleaning, lubricating and painting.

The duty on such articles is: "A duty upon the full value of the imported article, less the cost or value of such products of the United States."

Section 10.25 of the Customs Regulations (19 CFR §10.25) states, in pertinent part, as follows:

When a textile component is cut to shape (but not to length, width, or both) in the United States from foreign fabric and exported to another country, territory, or insular possession for assembly into an article that is then returned to the United States and entered, or withdrawn from warehouse, for consumption on or after July l, 1996, the value of the textile component shall not be included in the dutiable value of the article.

The entry which is the subject of the protest was made after the effective date of 19 CFR § 10.25, namely on November 6, 1996, and thus falls within the purview of that regulation.

Subheading 9404.90.8505, HTSUS, covers "Mattress supports; articles of bedding and similar furnishings (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: Other: Other: Other: Quilts, eiderdowns, comforters and similar article; With outer shell of cotton." In 1996, the duty rate for this tariff provision was 14.2%.

On April 1, 1997, the importer, Quilt Gallery, Inc., was asked on Customs Form 28 to provide to the import specialist information on the materials used to manufacture the comforters subject to this protest. The specific question was: "Are these fabrics cut to length, width, or both in the U.S. prior to exportation to Mexico?" Quilt Gallery responded on May l, 1997: "The fabrics are cut both to length and width in the US, prior to exportation to Mexico." However, protestant now claims that the process of cutting the fabric into squares or rectangles is "better characterized as `cutting to shape' rather than mere cutting to length or width or both." The claim is made by protestant that 19 CFR §10.25 was intended to exclude only larger pieces of fabric such as towels and curtains from dutyfree treatment. Customs finds no basis for this claim that the 19 CFR §10.25 exclusion was intended to cover larger pieces of rectangular or square fabric but not smaller pieces. The samples submitted are printed fabric squares, 6 1/4" x 6 1/4", cut from 10 yard printed fabric rolls of the same width, by cutting the fabric of the rolls at a right angle to produce squares the same length as the width of the roll.

Protestant contends that the cutting of larger pieces of fabric is often accomplished:

...with simple, scissorslike shears. But the cutting of small pieces for quilts [as in the importation under protest] is accomplished entirely differently. The fabric is spread on cutting tables, several plies thick, in a manner similar to fabric spread for cutting in apparel factories. The pieces are cut, not with simple scissors, but with electric cutting knives. The cutting knife operators cut the fabric according to patterns that are lightly stenciled over the top ply of the fabric. These cutting knife operators cut the fabric into precise squares with minimal fabric waste.

A review of the pictures submitted by protestant reveals that the socalled "pattern" upon which the cutting knife makes its cut is simply a row of dots arranged in a straight line.

The information and samples submitted clearly establish that the fabric squares or rectangles which are the subject of this protest were created by cutting foreign fabric in the U.S. to length and/or width. Section 10.25 specifically excludes textile components created in this manner from receiving a duty allowance when returned as part of an article assembled abroad.

With respect to the U.S.-made backing material, we are satisfied from the information presented by protestant that the rolls of fabric for the comforters’ backing were merely cut to length in Mexico prior to the assembly process. Section 10.16(b)(5), Customs Regulations (19 CFR 10.16(b)(5)), provides that “[c]utting to length of wire, thread, tape, foil, and similar products exported in continuous length” is an example of an operation considered incidental to the assembly process. Therefore, we find that an allowance in duty under subheading 98802.00.80, HTSUS, is warranted for the cost or value of the backing material incorporated into the comforters subject to this protest.


The printed fabric squares or rectangles comprising the comforters which are the subject of this protest were cut in the U.S. to length and/or width from foreign fabric. Therefore, pursuant to 19 CFR §10.25, the cost or value of the fabric squares or rectangles are ineligible for a duty allowance under subheading 9802.00.80, HTSUS. However, an allowance in duty should be made under this tariff provision for the cost or value of the U.S.-made backing material as we are satisfied that the fabric for the backing is merely cut to length in Mexico prior to the assembly process. Accordingly, the protest should be denied in part and granted in part in accordance with this decision.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, a copy of this decision should be attached to the Customs Form 19 and mailed by your office to the protestant as part of the notice of action on the protest 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 Customs Home Page on the World Wide Web (www.customs.treas.gov), the Diskette Subscription Service, Freedom of Information Act and other public distribution channels.


John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: