H314186

HQ H314186 September 17, 2024 OT:RR:CTF:FTM H314186 MJD CATEGORY: Classification TARIFF NO.: 5203.00.30 Center Director Apparel, Footwear, and Textiles Center U.S. Customs and Border Protection 33 New Montgomery St. San Francisco, CA 94105 Attention: Import Specialist Patricia Klein Re: Application for Further Review of Protest No. 2304-20-101510; Tariff classification of comber noils and eligibility for preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”) Dear Center Director: This is in reference to the Application for Further Review (“AFR”) of Protest No. 2304-20-101510, timely filed by Baker & McKenzie, LLP on August 11, 2020, on behalf of their client, [****], (hereinafter “Protestant”), regarding the tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) and preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”) of certain comber noils. You have asked that certain information submitted in connection with this ruling request be treated as confidential. Inasmuch as your request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), your request for confidentiality is approved. The information contained within brackets will not be released to the public and will be withheld from published versions of this ruling. FACTS: The subject merchandise covers one line entry, [****], of [****] kg of comber noils. According to Protestant, [****], is a Mexican company (hereinafter “Mexican company”) that manufactures cotton yarn in Mexico and produces the comber noils during the yarn manufacturing process. In the process of making yarn, the Mexican company passes raw cotton through a machine which combs the fibers. Combing the fibers results in long cotton fibers which are retained for use in yarn production, and short fibers known in the industry as “comber noils.” Protestant provides that the Mexican company sells the comber noils to a middleman, [****], which then sells the comber noils in the same condition to [****], the exporter and seller of the imported cotton at issue. At the time of importation, the comber noils were classified under heading 5203, specifically subheading 5203.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Cotton, carded or combed: Other.” On July 1, 2019, CBP issued to Protestant a Proposed Notice of Action (“CBP Form 29”) explaining that the comber noils at issue did not qualify for preferential tariff treatment under NAFTA and that they were properly classified in subheading 5203.00.3000, HTSUSA, which provides for “Cotton, carded or combed: Fibers of cotton processed but not spun: Other.” In response to the CBP Form 29, Protestant submitted a letter, dated August 7, 2019, stating, in part, that the comber noils are an originating good under NAFTA, “based on preference criterion C, which covers goods produced entirely within the territory of one or more NAFTA countries (here, Mexico) exclusively from originating materials (here, cotton scrap resulting from yarn production in Mexico).” Protestant also provided that “[****], the exporter and seller of the imported cotton at issue, further processes the cotton in Mexico by bleaching and carding the scrap.” (emphasis added). The protestant did not provide any information on the source of the raw cotton when requested by the port. In its Protest, dated August 11, 2020, however, the Protestant now claims that the comber noils are properly classified in subheading 5202.99.50, HTSUS, which provides for “Cotton waste (including yarn waste and garneted stock): Other: Other: Other.” Moreover, Protestant claims that “describe [****] treated the comber noils with minimal process[ing]. Namely, the comber noils were humidified, compacted into cakes, scoured and bleached, centrifuged to eliminate the water, dried, and then compacted in bales. Importantly, the comber noils were NOT subjected to any further combing or carding process prior to importation.” (emphasis added). CBP reclassified the comber noils under subheading 5203.00.30, HTSUS, and denied the product NAFTA preferential tariff treatment. Subsequently, on November 29, 2021, CBP’s New York laboratory tested a sample of the comber noils and reported via laboratory report no. NY20211268 that the cotton fibers were carded. ISSUE: What is the tariff classification of the comber noils? Are the comber noils eligible for preferential tariff treatment under NAFTA? LAW AND ANALYSIS: Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed on or about August 11, 2020, within 180 days of liquidation. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 2304-20-101510 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because the decision against which the protest was filed is alleged to be inconsistent with matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Tariff Classification Classification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification 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 be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level. The 2018 HTSUS provisions under consideration are as follows: 5202: Cotton waste (including yarn waste and garneted stock): Other: 5202.99: Other: 5202.99.5000: Other: * * * 5203: Cotton, carded or combed: Fibers of cotton processed but not spun: 5203.00.3000: Other: 5203.00.5000: Other: * * * In addition, in interpreting the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The ENs to heading 52.02 state, in relevant part: In general, this heading covers waste cotton obtained when cotton is prepared for spinning, or during spinning operations, weaving, knitting, etc., or from the garnetting of cotton goods. It thus includes: Combing waste, usually referred to as comber noils; strippings recovered from carding or combing cylinders; broken fibres detached during the drawing process; fragments of slivers or rovings; carding fly; tangled yarn and other yarn waste; yarn and fibres resulting from the garnetting of rags. This waste may contain greasy matter, dust or other extraneous matter or may have been cleaned, bleached or dyed. It may be used for spinning or may serve for other purposes. The heading excludes: . . . (c) Carded or combed cotton waste (heading 52.03). * * * The ENs to heading 52.03 state, in relevant part: This heading covers cotton (including garnetted stock and other cotton waste) which has been carded or combed, whether or not further prepared for spinning. The main purpose of carding is to disentangle the cotton fibres, lay them more or less parallel, and entirely or largely free them from any extraneous matter they may still contain. The fibres are then in the form of wide webs (laps) which are generally condensed into slivers. These slivers may or may not be combed before being converted int

Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed on or about August 11, 2020, within 180 days of liquidation. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 2304-20-101510 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because the decision against which the protest was filed is alleged to be inconsistent with matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts.Tariff ClassificationClassification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification 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 be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level.The 2018 HTSUS provisions under consideration are as follows:5202: Cotton waste (including yarn waste and garneted stock): Other: 5202.99: Other: 5202.99.5000: Other: * * *5203: Cotton, carded or combed: Fibers of cotton processed but not spun: 5203.00.3000: Other:5203.00.5000: Other: * * * In addition, in interpreting the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are genera