HQ 084540: Internal Advice Request 15/89

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                          HQ 084540

                        MARCH 5, 1990


CLA-2 CO:R:C:G  084540  PR

CATEGORY:  Classification

TARIFF NO.:  355.85, TSUS

District Director of Customs
77 S.E. Fifth Street
Miami, Florida  33131

RE:  Internal Advice Request 15/89

Dear Sir:

     This is in response to your memorandum of March 31,
1989, concerning a request for internal advice by Wilkie,
Farr & Gallagher on behalf of Spradling International Inc.,
and Productos Quimicos Nacionales, Ltda., on the
classification of certain woven fabrics.

FACTS:

     The subject fabrics are woven, of man-made fibers, and
coated or laminated with polyvinyl chloride plastics (PVC).
The coated fabrics are stated to be over 70 percent by weight
of, and in chief value of, the PVC material.

ISSUE:

     (1) A notice of rate advance was sent advising that the
subject merchandise is classifiable under the provision for
other coated or filled fabrics, in item 355.85, Tariff
Schedules of the United States Annotated (TSUSA).  This
classification was predicated on the decision in Elbe
Products Corp. v. U.S., Court of Appeals for the Federal
Circuit, Appeal No. 87-1619 (decided May 16, 1988).  The
importers believe that Elbe does not apply and that the
merchandise is properly classifiable as entered, under the
provision for coated or filled fabrics of man-made fibers,
over 70 percent by weight of rubber or plastics, in item
355.81, TSUS.

     (2) Where Customs has issued a "binding" ruling, must it
first notify the addressee of that ruling prior to enforcing
the principles of a court case which have the effect of
changing that ruling?

     (3) Do the principles of a judicial decision take
precedence over an established and uniform practice of
classification, or must Customs go through formal rule making
procedures to change that practice?

     (4) May Customs reliquidate entries that have not been
protested to effectuate the principles of court decision?

LAW AND ANALYSIS:

     Prior to the Elbe decision, the merchandise was
classified in item 355.81, TSUS.  However, that decision
concerning nonwoven fabrics which were coated with and in
chief value of plastics, stated that there was no authority
to disregard the value of the plastics material in the
classification of the merchandise.  While the merchandise
before the court may be slightly different than the
merchandise which is the subject of this ruling, the
principles expressed in that court case are clearly
applicable to the classification of the instant merchandise.
As in Elbe, following the court's reasoning, there is no
authority, either by statute or in the legislative history to
the TSUS, to disregard the value of the PVC material.  Since
the merchandise is stated to be in chief value of plastics,
it cannot be classified under a provision which requires it
to be in chief value of man-made fibers.

     It is also contended that Customs had an established and
uniform practice to classify the subject merchandise in item
355.81, and that Customs must adhere to that practice.
Section 315,, Tariff Act of 1930, as amended (19 U.S.C. 1315)
prohibits Customs from issuing an administrative ruling which
would impose a higher rate of duty than that being imposed
pursuant to an established and uniform practice of
classification.  Furthermore, Customs had issued an
administrative ruling to one of the parties here involved
that the instant merchandise was classifiable in item 355.81.

     It was the decision of the Court of Appeals for the
Federal Circuit, not Customs, which enunciated clear
principles of classification mandating the change in
classification.  Section 152.16(e), Customs Regulations (19
CFR 152.16(e)), requires that unless Customs otherwise
directs, the principles of any court decision adverse to the
government shall be applied not only prospectively, but also

to all unliquidated entries and protested entries which have
not been acted upon.  Since it was the court decision which
required the change in classification, no notice, either for
a change of practice or for a change in a "binding" ruling,
is required.

     However, since the merchandise at issue is not identical
to that before the court in Elbe, Customs has no authority to
apply the principles of a court decision adverse to the
government to entries which have been liquidated and which
have not been protested.

HOLDING:

     The subject merchandise is properly classifiable in item
355.85, TSUS.  All unliquidated entries and liquidated
entries for which a protest has been filed and not acted upon
should be classified in accordance with the principles set
out in the Elbe decision.  A copy of this ruling should be
furnished to the initiator of the internal advice request.


                              Sincerely,

                              //H. Volenick// for


                              John Durant, Director
                              Commercial Rulings Division