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HQ 962527

April 9, 2002

CLA-2-42: RR: CR:TE 962527 JFS


TARIFF NO.: 6402.99.1865

Chief, Liquidation and Protest Branch
U.S. Customs Service
Building 77 JFK Airport
Jamaica, New York 11430

RE: Decision on Application for Further Review of Protest No. 1001-98-101498, Filed May 28, 1998, concerning the classification of women's shoes

Dear Sir:

This is a decision on the Application for Further Review (AFR) of Protest number 1001-98-1001498, filed by Grunfeld, Desiderio, Lebowitz & Silverman, LLP, on behalf of Nine West Distribution Corp. The protest concerns Customs classification and liquidation of footwear entered on December 16, 1996. Customs liquidated the entry on February 27, 1998, and the protest was timely filed on May 28, 1998.

The protest initially contested the classification by Customs of three styles of shoes. Those styles are W-Newborn, P-Racey, and P-Soldout. In a submission dated August 18, 1998, the protestant abandoned its claim with respect to styles W-Newborn and P-Soldout. Therefore, as it pertains to those two styles, the protest is denied.


You classified the footwear in subheading 6404.19.3560, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides, in pertinent part, for footwear with outer soles of rubber or plastics, with uppers of textile materials, with open toes or open heels. The applicable rate of duty is 37.5% ad valorem.

The protestant claims that the footwear is classified under subheading 6402.99.1865, HTSUSA, which provides, in pertinent part, for footwear with outer soles and uppers of rubber or plastics, having uppers of which over 90 percent of the external surface area (ESAU) is rubber or plastics. The applicable rate of duty is 6% ad valorem.

This protest stems from the improper preparation and presentation of entry papers by the importer. At issue is whether style P-Racey has uppers of textile materials or of rubber and plastics. The cause of the dispute is that the footwear is apparently manufactured with two different versions of uppers, one composed of textile materials and the other of rubber and plastics. Even though the entry contained shoes with both kinds of uppers, the protestant entered all of the merchandise as shoes having rubber and plastic uppers. The protestant asserts that this error was the result of the vendor improperly filling out the Interim Footwear Invoice.


What is the proper classification of the footwear?


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 footwear under protest, style P-Racey, was entered under entry number XXX-XXXX709-8. Eight contracts for the footwear were included in the entry. All of the footwear was entered by the importer under subheading 6402.99.1865, HTSUSA, as having an ESAU of over 90% rubber and plastics. Counsel, in a submission dated August 18, 1998, admitted that three of the contracts, HP004932, HP005208 and HP005209 are for footwear with textile uppers. Accordingly, the remaining footwear at issue is that covered by contracts HP004933, HP004934, HP004935, HP004936, and HP004937.

In support of its argument that the footwear covered by the five remaining contracts has plastic uppers, the protestant provides spreadsheets described as follows:

[The spreadsheets] summariz[e] all relevant details for each Customs entry for each contract. The spreadsheets list the invoice number, contract number, material of the upper, entry number, etc. The material of the upper is identified by the initials “MF” for microfiber (a textile upper) and “SY” for synthetic (plastic upper).

The protestant also submits the contract cards for each entry that contained style P-Racey. The contract cards list each contract, the quantity (pairs) purchased under that contract, the material of the upper of the footwear purchased and other relevant information. The spreadsheet correlates the information from the contract cards with each Customs entry and commercial invoice for the years 1996 and 1997. The protestant contends that the information on the contract card is correct and accurate. Thus, according to the protestant, it is possible to determine the true composition of the footwear at issue by looking at the contract cards.

On October 1, 1996, four contracts for style P-Racey were entered under entry number XXX-XXXX339-7. According to the contract cards and the spreadsheet provided by the protestant, this footwear had plastic uppers and was entered by the protestant under subheading 6402.99.1865, HTSUSA, as having uppers of over 90% rubber or plastics. Customs requested samples of the footwear. The protestant submitted the samples and a letter dated March 28, 1997, in which counsel for the protestant states that the footwear had been misclassified. The protestant further stated that the footwear should have been classified as having textile uppers under subheading 6404.19.35, HTSUSA. Customs relied upon this statement when it rate advanced the footwear at issue herein.

To discount the relevance of this statement, counsel for the protestant claims that:
there was a mistake of fact in the liquidation of this entry. Customs acted under a mistake of fact as to the nature of this merchandise when it liquidated the entry. As indicated in the attached exhibits [(contract cards and spreadsheets)], this merchandise in fact had uppers of plastic. Thus, the merchandise should have been liquidated under subheading 6402.99.18 at the rate of 6% ad valorem. The importer will be submitting a separate request for reliquidation to correct this mistake of fact, pursuant to 19 U.S.C. §1520(c).

There is documentary evidence to support the protestant’s claim that it was mistaken when it informed Customs, in the letter dated March 28, 1997, that the footwear had textile uppers. In a letter dated May 14, 1997, the protestant, through counsel, retracted its March 28th statement, asserting that the protestant had been mistaken when stating that all of the entered footwear had textile uppers. The protestant, through counsel, informed Customs that the footwear at issue, style P-Racey, did in fact come in two versions, one with textile uppers and one with plastic uppers. Moreover the protestant further stated that all of the contracts except for one covered shoes with plastic uppers. In support of this claim, the protestant submitted samples of the footwear with textile uppers and with plastic uppers, stylemaster sheets correlating the material of the upper to the contracts and the relevant invoices.

In response to questions raised by the Office of Regulations and Rulings concerning the letter dated May 14, 1997, Counsel submitted a memo, dated May 2, 1997, from the “Import Traffic Supervisor” for Nine West to counsel for the protestant. The memo advises counsel that:

Upon closer review of entries XXX-XXXX356-9 and XXX-XXXX339-7 it was found that the original information provided to you was incorrect. After looking at the actual purchase order and the receiving manifest the only shoe which was imported with a fabric upper was P-Soldout on entry number XXX-XXXX356-9. All other shoes on the two invoices in question have synthetic uppers.

This statement is consistent with the contract cards and spreadsheets provided by the protestant.

It must be noted, however, that this protest raises serious questions of whether the protestant acted with reasonable care with respect to the reporting requirements of the Customs regulations and failure to properly notify Customs of the contents of the entry. Clearly, these errors were avoidable as evidenced by the fact that the protestant was able to provide contract information to demonstrate the true composition of the footwear entered.

When deciding on an AFR, Customs must weigh all the evidence before it, taking into consideration its credibility and reliability. In the instant protest, Customs must weigh the evidence presented by the protestant against the protestant’s inconsistent, yet subsequently explained, statements concerning other entries involving the same style shoe. In support of its claim that the footwear at issue has uppers of rubber and plastics, the protestant has presented contract cards, spreadsheets, invoices, supporting letters and the memo from Nine West to counsel. A persuasive factor supporting the veracity and reliability of the protestant’s statements, is that the protestant readily abandoned its claims for styles W-Newborn and P-Soldout and abandoned four out of the original nine contracts at issue covering style P-Racey. Not only is this a demonstration of good faith, but it is not likely that the protestant would knowingly provide false documents when it has already abandoned many of its claims. The demonstration of good faith and counsel’s written explanations provide sufficient evidence that the footwear covered by contract numbers HP004933, HP004934, HP004935, HP004936, and HP004937, was correctly classified as entered.

The proper classification for style P-Racey, is under subheading 6402.99.1865, HTSUSA, which provides, in pertinent part, for footwear with outer soles and uppers of rubber or plastic, having uppers of which over 90 percent of the external surface area (ESAU) is rubber or plastics.


The footwear known as style P-Racey, covered by contract numbers HP004933, HP004934, HP004935, HP004936, and HP004937, is classified under subheading 6402.99.1865, HTSUSA, which provides 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, Other: For women: Other.” The applicable rate of duty is 6% ad valorem.

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.

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.


John Durant, Director
Commercial Rulings Division

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