[Federal Register Volume 59, Number 55 (Tuesday, March 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6532]


[[Page Unknown]]

[Federal Register: March 22, 1994]


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DEPARTMENT OF THE TREASURY
19 CFR Part 175

[TD 94-25]

 

Tariff Classification of Down Comforters; Customs Decision on a 
Domestic Interested Party Petition

AGENCY: U.S. Customs Service, Department of the Treasury

ACTION: Final interpretive rule.

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SUMMARY: Customs has held in certain rulings regarding down comforters 
with an outer shell of cotton that the outer shell determines the 
classification and the textile category of the comforters at the 
subheading level of the Harmonized Tariff Schedule of the United States 
(HTSUS). A domestic interested party claims that the down filling 
imparts the essential character to these comforters and thus believes 
the comforters should be classified at a different subheading level, 
resulting in a higher rate of duty. This document advises the public 
that Customs, after soliciting comments from the public and analyzing 
them, has decided to grant the domestic party petition.

DATES: This decision will be effective as to merchandise entered for 
consumption, or withdrawn from warehouse for consumption after April 
29, 1994.

FOR FURTHER INFORMATION CONTACT: Craig Clark, Commercial Rulings 
Division, U.S. Customs Service, (202) 482-7050.

SUPPLEMENTARY INFORMATION:

Background

    On May 27, 1993 Customs published a notice in the Federal Register 
(58 FR 30726), inviting public comments concerning a domestic 
interested party petition, filed pursuant to section 516, Tariff Act of 
1930, as amended (19 U.S.C. 1516). The petition related to the tariff 
classification of certain down comforters.
    Heading 9404, Harmonized Tariff Schedule of the United States 
(HTSUS), provides for articles of bedding and similar furnishing (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.
    In HQ 084000 (June 16, 1989) Customs held that a down comforter was 
classified as an article of bedding and similar furnishing, other of 
cotton, not containing any embroidery, lace, braid, edging, trimming, 
piping exceeding 6.35 millimeters or applique work in subheading 
9404.90.80, HTSUS, subject to a Column 1 rate of duty of 5 percent ad 
valorem and textile category 362. This down comforter had a shell made 
of 100 percent cotton fabric, a filling of white goose down, and a 
piping of less than 6.35 millimeters on all four edges.
    In HQ 086080 (February 9, 1990) Customs held that a down comforter 
was classified in subheading 9404.90.80, HTSUS, subject to a Column 1 
rate of duty of 5 percent ad valorem and textile category 362. This 
down comforter had a 100 percent woven quilted shell and a filling of 
100 percent goose down, but had no external decorative work.
    In HQ 084000 and HQ 086080 Customs has determined, therefore, that 
it is the outer cotton shell that determines the classification of 
these down comforters at the subheading level, making them classifiable 
as ``of cotton.''
    The petitioner contends that it is the down filling, and not the 
outer cotton shell, that imparts the essential character in application 
of General Rule of Interpretation (GRI) 3(b) to the down comforters and 
that should determine the classification at the subheading level. 
Consequently, the petitioner submits that the proper classification of 
the down comforters with cotton covers is as in subheading 9404.90.90, 
HTSUS, a residual provision within heading 9404, subject to a duty rate 
of 14.5 percent ad valorem.

Summary of Comments

    Twenty-six (26) comments were received in response to the Federal 
Register notice. Of these comments, twenty-three (23) were in support 
of the petition, and three (3) were in opposition to it.
    Of those supporting the petition, the following arguments were 
made: there are important policy reasons why the down filling should 
determine classification at the subheading level for down comforters; 
there are prior Customs rulings which support the petitioner's 
position; the terms of the HTSUS support classifying articles of 
Heading 9404 according to the inner filling; and the essential 
character of down comforters is provided by the down filling.
    Of those opposing the petition, the following arguments were made: 
down comforters should take the same duty rate under the HTSUS as they 
did under the TSUS; the terms of the HTSUS support classifying articles 
of Heading 9404 according to the outer shell by the application of GRI 
1; and by the application of GRI 3(b) the essential character is 
provided by the outer shell.

Analysis of Comments

    Many of the commenters in support of the petition stated that there 
are important policy considerations for changing the classification of 
down comforters. These considerations are beyond the scope of our 
review.
    One commenter who opposed the petition stated that under the Tariff 
Schedules of the United States (TSUS), down comforters were dutiable at 
5 percent ad valorem. Since the implementation of the HTSUS was 
intended to be revenue neutral, down comforters should be dutiable at 5 
percent ad valorem under the HTSUS. Customs disagrees with this comment 
because we are bound by the terms of the HTSUS, and it has been 
recognized that although it was intended that the implementation of 
HTSUS be revenue neutral, there are instances where this is not the 
case.
    Both those who supported and opposed the petition cited prior 
Customs rulings. Many of the rulings cited concerned the classification 
of articles that were different from down comforters. Although rulings 
were cited concerning the classification of down comforters, these are 
the rulings and the issue which the petitioner requested we review.
    Both those who supported and opposed the petition stated that the 
terms of Heading 9404, and the subheadings within that heading, 
indicate whether an article should be classified in Heading 9404 
according to the outer shell or the inner filling. Supporters of the 
petition state that there are subheadings within Heading 9404 in which 
the article is classified as to the inner filling; opponents of the 
petition state that there are subheadings within Heading 9404 in which 
an article is classified as to the outer shell.
    Classification of merchandise under the HTSUS is in accordance with 
the General Rules of Interpretation (GRI's). GRI 1 provides that 
classification shall be determined according to the terms of the 
headings and any relative section or chapter notes, and, provided such 
headings or notes do not otherwise require, according to the remaining 
GRI's taken in order.
    There is no disagreement among the commenters that down comforters 
fall within the scope of Heading 9404, HTSUS, by the application of GRI 
1. Once a heading is determined to be applicable, classification must 
then be made at the appropriate subheading level.
    GRI 6 provides that, for legal purposes, classification in the 
subheadings of a heading is determined in accordance with the terms of 
the subheadings and any related subheading notes and in accordance with 
the preceding rules [GRI's]. Only subheadings at the same level are 
comparable. Thus GRI 6 applies GRI's 1 through 5 in classifying goods 
at the subheading level. In addition, in application of GRI 6, 
classification must be effected at the six-digit level before 
proceeding to the eight-digit level.
    The subheadings at the six-digit level within Heading 9404 are the 
following: subheading 9404.10, which provides for ``mattress 
supports''; subheadings 9404.21 and 9404.29, which provide for 
``mattresses''; subheading 9404.30, which provides for ``sleeping 
bags''; and subheading 9404.90, which provides for all other goods not 
included in the preceding subheadings. Accordingly the subheading at 
the six-digit level which includes down comforters is 9404.90.
    After the applicable subheading at the six-digit level has been 
ascertained, the correct classification can be determined by comparing 
the eight-digit subheadings. Subheadings 9404.90.10 and 9404.90.20 
provide for ``pillows, cushions and similar furnishings.'' Subheading 
9404.90.80 provides for goods described in subheading 9404.90 which are 
not classifiable in either of the preceding subheadings, and which are 
``of cotton, not containing any embroidery, lace, braid, edging, 
trimming, piping exceeding 6.35 mm or applique work.'' Subheading 
9404.90.90 is a basket provision that covers goods described in 
subheading 9404.90, but which are not provided for in subheadings 
9404.90.10 through 9404.90.80.
    Down comforters clearly do not fall within the scope of subheadings 
9404.90.10 or 9404.90.20. Consequently, the remaining subheadings at 
the eight-digit level are subheadings 9404.90.80 and 9404.90.90. The 
comforters which are the subject of the petition meet the terms of 
subheading 9404.90.80 since the outer shell is made of cotton and does 
not contain embroidery, lace, etc. However, the comforters also contain 
an inner filling of down and since the ``other'' of subheading 
9404.90.90 refers to materials other than cotton, not containing any 
embroidery, lace, etc., the down comforters also meet the terms of 
subheading 9404.90.90. Since the comforters are described in more than 
one subheading, GRI 1 does not govern their classification and the 
other GRI's must be applied, in order, until a single classification 
can be determined.
    All of the commenters who opposed the petition stated that down 
comforters should be classified in accordance with GRI 3(a). They 
stated that of the two competing provisions at the subheading level, 
subheading 9404.90.80, which provides for ``Of cotton, not containing'' 
named forms of decorative features, and subheading 9404.90.90, which 
provides for ``Other,'' the ``of cotton'' provision is more specific 
because down is not specifically provided for.
    To understand the scope of GRI 3(a), GRI 2(b) must first be 
considered. That rule provides, in part, that ``The classification of 
goods consisting of more than one material or substance shall be 
according to the principles of rule 3.'' Down-filled comforters consist 
of at least two components, textile covering fabrics and down 
(including feathers). Accordingly, GRI 3 is applicable. The rules set 
out in GRI 3 are prefaced by the statement, ``When, by application of 
rule 2(b) or for any other reason, goods are, prima facie, classifiable 
under two or more headings, classification shall be'' according to the 
three subparts of GRI 3, taken in order. GRI 3(a) states that the most 
specific heading will be preferred unless two or more headings each 
refer to part only of the materials in a good.
    The material named in subheading 9404.90.80 is ``cotton, not 
containing any embroidery, lace, braid * * *'' That entire description 
refers to a single material. The words ``not containing'' and 
subsequent text are just as much a part of the material being described 
as if the provision read ``Of cotton waste'' or ``Of cotton sheeting''.
    The word ``Other'' in subheading 9404.90.90 refers to materials 
other than the material named in subheading 9404.90.80. That material 
could be, for example, man-made fibers, wool, down, or cotton 
containing embroidery, lace, etc. In down filled comforters, ``Other'' 
refers to the down component. Accordingly, headings 9404.90.80 and 
9404.90.90 each refer to part only of the materials in those comforters 
and GRI 3(a) is not applicable.
    GRI 3(b) provides that mixtures and composite goods consisting of 
different materials or made up of different components shall be 
classified as if they consisted of the material or component which 
gives them their essential character. Most of these commenters stated 
that it was the nature of the down and the role it plays in relation to 
the use of down comforters which show that it is down that provides the 
essential character. One commenter stated that the characteristics and 
quality of a down comforter depend on the performance of the down used 
to fill it. Also, a commenter stated that it is the down that gives a 
unique combination of warmth and lightness which is sought by 
consumers. Another reason many commenters gave that the essential 
character of down comforters is provided by the down filling is the 
cost of down. Several commenters stated that the bulk of the costs in 
producing a down comforter is attributed to the cost of the down 
itself, with one commenter adding that the down filling costs four 
times that of the outer shell.
    All of the commenters that opposed the petition stated that the 
essential character of down comforters is imparted by the outer shell. 
One commenter stated that the character of an article as a comforter 
does not change by virtue of the filling material; any fill could quite 
easily be substituted in place of any other fill without destroying the 
essential character of the article. Two commenters stated that the 
outer shell provides the comforter with its distinctive appearance and 
shape, protects the user from ticklish feathers, and serves the very 
important function of holding the down in place; without the cotton 
outer shell, the article would be incapable of use as a comforter.

Decision

    After careful consideration of the petition and the comments 
submitted in response to it, we conclude that the petitioner has 
demonstrated that down filling imparts the essential character to a 
down comforter. The characteristics and quality of a down comforter are 
imparted by the down filling. We do not agree with those who stated 
that the outer shell gives a down comforter its distinctiveness, since 
many down comforters have a fairly plain and undecorated outer shell. 
In addition, although a down comforter would be incapable of use 
without the outer shell, it would also be incapable of use as a 
comforter without the down filling.
    Another reason that the essential character of a down comforter is 
imparted by the down is the cost of the down. The much higher costs for 
down comforters are associated with the down filling, not the outer 
shell. Therefore, consumers are willing to pay a higher price for a 
down comforter than most other comforters filled with other materials.
    In accordance with the above discussion, we conclude that in the 
application of GRI 3(b), the essential character of down comforters is 
imparted by the down filling. Consequently, the merchandise at issue is 
classified under subheading 9404.90.90, HTSUS, which provides for 
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. The 
applicable rate of duty is 14.5 percent ad valorem. Although the 
subject of this notice and the preceding discussion refer to down 
comforters, the rationale for classifying that merchandise in 
subheading 9404.90.90 is equally applicable to down filled quilts, 
eiderdowns, and similar articles.

    This change in classification is effective as to merchandise 
entered for consumption, or withdrawn from warehouse for consumption, 
after April 29, 1994, which is 30 days after the date of publication in 
the Customs Bulletin.

    Any Customs rulings not in conformity with this notice are hereby 
revoked.

Authority

    This notice is published in accordance with Sec. 175.22(a), Customs 
Regulations (19 CFR 175.22(a)).

Samuel H. Banks,

Acting Commissioner of Customs.

    Approved: March 2, 1994.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 94-6532 Filed 3-21-94; 8:45 am]

BILLING CODE 4820-02-P