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

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consumption, or withdrawn from warehouse for consumption after April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]

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