HQ 963027

September 9, 1999

CLA-2 RR:CR:GC 963027/960816 PH

CATEGORY: Classification

TARIFF NO.: 8428.90.00

Port Director of Customs

18011K Cross Beam Drive

Charlotte, NC 28217

RE: Protest 1512-97-100177; Automatic Gusset Line Closer; Schadok
Lifting and Handling Device; Loader

Dear Port Director:

This is our decision on protest 1512-97-100177, against your
classification under the Harmonized Tariff Schedule of the United States
(HTSUS) of machines used to make up automatic gusset line closer
machines. In preparation of this ruling, consideration was given to
counsel's supplemental submission of July 29, 1999.

FACTS:

The merchandise is invoiced as \"ONE PICK UP AND ORIENTATION SET WITH
CONTROL KEY BOARD\" and \"ONE TURRET UNIT WITH CONTROL CABINET AND
ACCESSORIES AS MACHINE AUTOMATIC GUSSET\". The importer states that
these articles are two of the four machines which make up an \"Automatic
Gusset Line Closer\" (AGLC) machine used to make pantyhose. The first
article, also called a \"Schadok Lifting and Handling Device\", lifts
fabric blanks from the supply reservoir of tubular fabric blanks,
orients the blanks, and transports them to the second article (also
called a \"Loader\"). The Loader positions the blanks and removes
creases and pleats from them, after which the other two machines in the
AGLC perform sewing functions.

In the July 29, 1999, supplemental submission, additional information
was provided about the crease and pleat removal component of the Loader.
According to a sworn statement by a person described as \"one of the
inventors of the AGLC machine\", the pleat removal feature was not
included on the prototype loaders but evolved on imported machines to
handle garments which contain a lot of spandex and/or rubber. The pleat
remover consists of a set of fingers that run inside the frames in a
circular motion to balance out the stretch in the garment, thereby
removing any pleats. It is an attachment to the loader that can be
turned on or off, depending on the style of the garments being
processed. It is estimated that 25% of the styles processed by the
importer require use of the feature. The cost of the pleat remover is
approximately 2% of the loader and the cost breakdown between the
Schadok Lifting and Handling Device and the Loader is: Schadok device
65%, Loader 35%.

The merchandise was entered in 14 entries between April and December,
1993, as other sewing machines, automatic units, in subheading
8452.21.90, HTSUS. The entries were liquidated on January 31, 1997, with
classification as other machines and mechanical appliances having
individual functions, not specified or include elsewhere, in subheading
8479.89.90, HTSUS.

The importer's counsel filed this protest with Customs on April 30,
1997, against the classification of the merchandise. Citing Harmonized
Commodity Description and Coding System Explanatory Note (EN) 84.79, the
protestant contends that the machines are precluded from classification
under heading 8479, HTSUS, because they can be properly classified in
another more specific heading of Chapter 84, HTSUS, namely heading 8428
or 8452, HTSUS. The protestant also contends that the machines are used
exclusively as components for the AGLC's and that their principal
functions are the lifting, handling, and loading functions specifically
provided for in subheading 8428, HTSUS.

Alternatively, the protestant argues that the machines, when combined
with the other two machines making up the AGLC'S, contribute together to
the clearly defined function performed by sewing machines, and that the
four machines are interdependent on one another. Therefore, under Note
4, Section XVI, HTSUS, the machines should be classified as sewing
machines in heading 8452, HTSUS. In this alternative argument, the
protestant contends that the machines would be classified as parts of
sewing machines in subheading 8452.90.00, HTSUS.

ISSUE:

Whether the Schadok Lifting and Handling Devices and the Loaders, two of
the four machines making up Automatic Gusset Line Closer machines, are
classifiable as other lifting, handling, loading or unloading machinery
in subheading 8428.90.00, HTSUS, other sewing machines in subheading
8452.21.90, HTSUS, other parts of sewing machines in subheading
8452.90.00, HTSUS, or other machines and mechanical appliances in
subheading 8479.89.90, HTSUS.

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed (i.e., within 90
days after but not before the notice of liquidation; see 19 U.S.C.
1514(c)(3)(A)) and the matter protested is protestable (see 19 U.S.C.
1514(a)(2) and (5)).

Classification of merchandise under the HTSUS is in accordance with the
General Rules of Interpretation (GRIs), taken in order. GRI 1 states in
part that, for legal purposes, classification shall be determined
according to the terms of the headings and any relative section or
chapter notes, and provided the headings or notes do not require
otherwise, according to GRIs 2 through 6. GRI 3(c) provides that when
goods are *prima facie* classifiable under two or more headings, goods
which cannot be classified by reference to GRI 3(a) (by reference to the
heading which provides the most specific description) or GRI 3(b)
(classification of mixtures, composite goods consisting of different
materials or made up of different components, and goods put up in sets
for retail sale as if they consisted of the material or component which
gives them their essential character) shall be classified under the
heading which occurs last in numerical order among those which equally
merit consideration.

The Harmonized Commodity Description and Coding System Explanatory Notes
(ENs) constitute the official interpretation of the Harmonized System.
While not legally binding on the contracting parties, and therefore not
dispositive, the ENs provide a commentary on the scope of each heading
of the Harmonized System and are thus useful in ascertaining the
classification of merchandise. Customs believes the ENs should always be
consulted. See T.D. 89‑80, published in the [Federal
Register]{.underline} August 23, 1989 (54 F.R. 35127, 35128).

The 1993 HTSUS headings under consideration are as follows:

> 8428 Other lifting, handling, loading or unloading machinery (for
> example, elevators, escalators, conveyors, teleferics)
>
> 8452 Sewing machines, other than book-sewing machines of heading 8440;
> furniture, bases and covers specially designed for sewing machines;
> sewing machine needles; parts thereof
>
> 8479 Machines and mechanical appliances having individual functions,
> not specified or included elsewhere in this chapter; parts thereof

Note 4, Section XVI, HTSUS, provides that:

> Where a machine (including a combination of machines) consists of
> individual components (whether separate or interconnected by piping,
> by transmission devices, by electric cables or by other devices)
> intended to contribute together to a clearly defined function covered
> by one of the headings in chapter 84 or chapter 85, then the whole
> falls to be classified in the heading appropriate to that function.

The protestant contends that the machines are parts of sewing machines
made up of the two machines imported in the protested entries and two
other machines which perform the sewing function, so that the individual
components combine to contribute together to a clearly defined function
covered by heading 8452, HTSUS, and the whole should be classified in
that heading, pursuant to Note 4, Section XVI, HTSUS. In applying Note
4, Section XVI, HTSUS, Customs has repeatedly noted that there are no
Legal Notes or ENs that provide for \"unfinished functional units\" or
\"parts of functional units\". The fact that several machines, if
imported together, would be classified under a single heading as a
\"functional unit\" does not mean that the same would hold true if they
are imported separately. (See, *e.g*., Headquarters Rulings (HQs) 087077
dated March 27, 1991; 950218 dated April 17, 1992; 957326 dated July 17,
1995; 961003 dated June 10, 1998; and 962105 dated April 22, 1999.) This
is particularly true when, as in this case, the machines imported in the
protested entry do not include the machines which give the complete or
finished article its essential character (*i.e*., that of a sewing
machine) (see GRI 2(a)). When imported separately, the machines must be
individually classified and classification in subheading 8452.21.90 or
8452.90.00, HTSUS, by virtue of Note 4, Schedule XVI, HTSUS, is
precluded.

The functions of the Schadok Lifting and Handling Device are to remove
fabric blanks from a supply reservoir, orient the blanks in a
predetermined manner, and convey them to the Loader. Each of these
functions is encompassed within the language of heading 8428, HTSUS (see
also EN 84.28, according to which \"\... this heading covers a wide
range of machinery for the mechanical handling of materials, goods, etc.
(lifting, conveying, loading, unloading, etc.) \[and\] \[t\]hey remain
here even if specialised for a particular industry, for agriculture,
metallurgy, etc.\"). The Schadok Lifting and Handling Device is
classified as other lifting, handling, loading or unloading machinery in
subheading 8428.90.00, HTSUS.

The functions of the Loader are to orient the fabric blanks received
from the Schadok Lifting and Handling Device, remove creases and pleats
from the fabric blanks (by stretching them, according to materials
provided by the protestant), and position a pair of them on another
machine for slitting and sewing. Two of these functions are basically
the same as the functions of the Schadok Lifting and Handling Device
(orienting the fabric blanks and positioning them). These functions are
encompassed within the language of heading 8428, HTSUS (see above). The
third function, removing creases and pleats by stretching, is not
encompassed within the language of heading 8428, HTSUS, nor is it
specified or included elsewhere in Chapter 84, HTSUS, other than in the
\"basket\" provision in heading 8479, HTSUS.

Note 3, Section XVI, HTSUS, provides, in part:

> Unless the context otherwise requires \... machines adapted for the
> purpose of performing two or more complementary or alternative
> functions are to be classified \... as being that machine which
> performs the principal function.

The General EN for Note 3, Section XVI, HTSUS (p. 1226-1227), states, in
part:

> In general, multi-function machines are classified according to the
> principal function of the machine. \... Where it is not possible to
> determine the principal function, and where, as provided in Note 3 to
> the Section, the context does not otherwise require, it is necessary
> to apply General Interpretative Rule 3(c) \....

In HQ 960816 dated August 27, 1998, Customs concluded that removing the
creases and pleats by stretching was the principal function of the
Loaders and, therefore, that the Loaders were classified as other
machines and mechanical appliances having individual functions, not
specified or included elsewhere in Chapter 84, in subheading 8479.89.90,
HTSUS. This determination was based on the facts available to Customs at
that time, *i.e.*, \"\[the crease and pleat removal\] function,
preparatory to sewing the gusset into the pantyhose, is critical to the
successful production of pantyhose \[and\] \[t\]he other two functions
are subsidiary to, or preparatory for, this function, and are actually
continuations of the functions of the Schadok Lifting and Handling
Device.\"

HQ 960816 was, and remains, correct on the facts as described in the
ruling and before Customs. However, pursuant to 19 CFR 174.28, Customs
may consider alternative claims and additional grounds or arguments
submitted in writing by the protestant with respect to any decision
which is the subject of a valid protest at any time prior to disposition
of the protest (*i.e.*, prior to the mailing of the protest denial
(Customs Form 19) to the protestant, *San Francisco Newspaper Printing
Co. v. United States*, 9 CIT 517, 620 F. Supp. 738 (1985)). Customs
rulings are issued on the assumption that all of the information upon
which they are based is accurate and complete in every material respect
(see 19 CFR 177.9(b)(1); see also 19 CFR 177.2(b)(1)).

In this case, before disposition of the protest, the protestant has
provided additional grounds in writing with respect to the decision
under protest. The additional information is that the crease and pleat
removal component is used with approximately 25% of the styles of
garments being processed in the importer's operations and represents a
very small part of the cost of the Loader. As noted in HQ 960816, the
dictionary definition of \"principal\" is \"first in rank, authority,
importance, degree, etc.\", (*Webster's new World Dictionary of American
English*, 3rd Coll. Ed. (1988), at p. 1070). Although we do not believe
that the relative cost of the components performing the different
functions is necessarily relevant in determining the component which
performs the principal function, we note the protestant's statement that
the crease and pleat removal component was added to the Loader after its
development and is needed with only about 25% of the styles of garments
being processed. On the other hand, we note that the crease and pleat
removal component is described as an integral part of the AGLC in the
patent for the machine (U.S. Patent No. 5,165,355). Bearing in mind the
definition of \"principal\" (see above), we conclude that the crease and
pleat removal function is important, but so are the orienting and
positioning functions. We conclude that this is a situation in which it
is not possible to determine [the]{.underline} principal function.
Therefore, in accordance with the General EN for Note 3, Section XVI,
HTSUS, quoted above, it is necessary to apply GRI 3(c), which requires
classification under the heading which occurs last in numerical order
among those which equally merit consideration. As between headings 8428
and 8479, HTSUS, that is, of course, the latter. The Loaders are
classified as other machines and mechanical appliances in subheading
8479.89.90, HTSUS. (See HQ 957161 dated April 24, 1995, for a similar
analysis and classification.)

HOLDING:

The Schadok Lifting and Handling Devices are classified as other
lifting, handling, loading or unloading machinery in subheading
8428.90.00, HTSUS, and the Loaders are classified as other machines and
mechanical appliances in subheading 8479.89.90, HTSUS.

EFFECT ON OTHER RULINGS:

HQ 960816 dated August 27, 1998, is DISTINGUISHED.

**The protest is GRANTED in part (as to the Schadok Lifting and Handling
Devices) and DENIED in part (as to the Loaders). In accordance with
Section 3A(11)(b) of Customs Directive 099 3550‑065, dated August 4,
1993, Subject: Revised Protest Directive, this decision should be mailed
(in this case, both this decision and HQ 960816 should be mailed), with
the Customs Form 19, by your office to the protestant no later than 60
days from the date of this letter. Any reliquidation of the entry in
accordance with the decision must be accomplished prior to mailing of
the decision. Sixty days from the date of the decision the Office of
Regulations and Rulings will take steps to make the decision available
to Customs personnel via the Customs Rulings Module in ACS and the
public via the Diskette Subscription Service, Freedom of Information
Act, and other public access channels.**

Sincerely,

John Durant, Director,

Commercial Rulings Division