AGENCY: Customs Service, Treasury.

ACTION: Notice of receipt of domestic interested party petition; solicitation of comments.

SUMMARY: Customs has received a petition submitted on behalf of a domestic interested party requesting the reclassification of certain imported textile costumes. The petitioner contends that Customs is incorrect in classifying textile costumes which are flimsy, not durable, and not normal articles of wearing apparel, under subheading 9505.90.6090, Harmonized Tariff Schedule of the United States (HTSUS), as "Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Other: Other: Other." The provision is duty free under the general column one rate and costumes classifiable under this provision are not subject to quota or visa restraints. The petitioner contends that all imported textile costumes should be classified in Chapters 61 or 62, HTSUS, asserting that textile costumes are excluded from classification under subheading 9505.90.6090, HTSUS, pursuant to Note 1(e), Chapter 95, which states that the chapter does not cover sports clothing or fancy dress, of textiles, of chapter 61 or 62. If classified under Chapter 61 or 62 of the HTSUS, the costumes would be dutiable and may be subject to quota and visa restraints. This document invites comments with regard to the correctness of the current classification.

DATES: Comments must be received on or before (60 days from Monday, December 22, 1997).

ADDRESS: Written comments (preferably in triplicate) are to be addressed to U.S. Customs Service, Office of Regulations and Rulings, Attention: Commercial Rulings Division, 1300 Pennsylvania Avenue, NW., Washington, D.C. 20229. Comments submitted may be inspected at the Commercial Rulings Division, Office of Regulations and Rulings, located at 1300 Pennsylvania Avenue., NW., 3rd Floor, Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Ann Segura Minardi, Textiles Branch, (202-927-1368).

SUPPLEMENTARY INFORMATION:

A petition has been filed under section 516, Tariff Act of 1930, as amended (19 U.S.C. 1516), on behalf of an American manufacturer of textile costumes. The petitioner contends that virtually identical costumes to those manufactured by petitioner are being imported into the U.S. and some of these textile costumes are being erroneously classified by Customs under subheading 9505.90.6090, Harmonized Tariff Schedule of the United States (HTSUS), as "Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Other: Other: Other." The provision is duty free under the general column one rate and costumes classified under this provision are not subject to quota or visa restraints. The petitioner claims that all imported textile costumes should be classified in Chapters 61 or 62, HTSUS, asserting that textile costumes are excluded from classification under subheading 9505.90.6090, HTSUS, pursuant to Note 1(e), Chapter 95. If classified under Chapters 61 or 62, the costumes would be dutiable and may be subject to quota and visa restraints.

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the harmonized system is such that virtually all goods are classified by application of GRI 1, that is, 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 GRIs may then be applied. The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs.

Heading 9505, HTSUS, includes articles which are for "Festive, carnival, or other entertainment." However, Note 1(e), chapter 95, HTSUS, excludes articles of "fancy dress, of textiles, of chapter 61 or 62" from chapter 95. The ENs to 9505, state, among other things, that the heading covers:

(A) Festive, carnival or other entertainment articles, which in view of

their intended use are generally made of non-durable material. They include:

(3) Articles of fancy dress, e.g., masks, false ears and noses,

wigs, false beards and moustaches (not being articles of postiche -

heading 67.04), and paper hats. However, the heading excludes

fancy dress of textile materials, of chapter 61 or 62.

In interpreting the phrase "fancy dress, of textiles, of chapter 61 or 62," Customs initially took the view that fancy dress included "all" costumes regardless of quality, durability, or nature of the item. However, Customs has reexamined its view regarding the scope of the term "fancy dress" as it relates to costumes. On November 15, 1994, Customs issued Headquarters Ruling Letter (HQ) 957318, which referred to the settlement agreement of October 18, 1994, reached by the United States and Traveler Trading in the case of Traveler Trading Co. V. United States, Civil Action, #91-02-00084. In HQ 957318, Customs stated that it had agreed to classify as festive articles in subheading 9505.90.6090, HTSUS, costumes of a flimsy nature and construction, lacking in durability, and generally recognized as not being normal articles of apparel.

The imported costumes which are the subject of HQ 957318 are of the same class or kind of merchandise as the costumes manufactured by petitioner. Costumes, whether imported or domestically manufactured, are traditionally worn in conjunction with the celebration of the Halloween festival or to costume parties. The costumes at issue are constructed of fabric comprised of man-made or natural fibers, but not of paper. The costumes usually depict a character, creature, or professional person, and often include accessories.

Petitioner asserts that Customs interpretation of the term "fancy dress" is incorrect since the term "fancy dress" is synonymous with the word "costume." In support of this assertion, petitioner cites the "Cambridge International Dictionary of English" (1995) as stating that the word "costume" is American for the British and Australian term "fancy dress." In addition, petitioner cites the "Oxford English Dictionary" (2d ed. 1989) as stating that the definition of the term "fancy dress" is "[a] costume arranged according to the wearer's fancy, usually representing some fictitious or historical character."

The petitioner states that the Nomenclature Committee of the Customs Cooperation Council (predecessor to the World Customs Organization) considered the scope of the term "fancy dress" and determined that the proper classification for costumes was in Section XI. Further, a recent decision by the Canadian International Trade Tribunal held that the language of Note 1(e) regarding "fancy dress, of textiles" included the inexpensive costumes before the Tribunal because the costumes were "arranged or made to suit the wearer's fancy to represent fictitious characters" and that subheading 9505, HTSUS, covered "goods [that] are more indicative of face disguises than of actual clothing."

In citing the ENs to Chapter 95, petitioner argues that the examples set forth as "articles of fancy dress" in the ENs include only items that act as accessories to the fancy dress but are not themselves "fancy dress" because they do not clothe the body. Further, petitioner claims that the phrase in the ENs, "articles of fancy dress", does not include those articles made of textile material and that an item of "fancy dress" is the actual costume, not the accessories.

Petitioner states that the durability of the costume is irrelevant to the determination of whether a costume is an item of apparel. Petitioner cites the case of Admiral Craft Equip Corp. V. United States, 82 Cust. Ct. 162, 164, C.D. 4796 (1979), in support of their position that Customs should apply a "use" test in classifying textile costumes and the case of Dynamics Classics, Ltd. V. United States, 10 CIT 666 (1986), as setting forth factors to be considered in applying the "use" test. In the Dynamics case the court cited United States v. Carborundum Co., 63 CCPA 98, 102, C.A.D. 1172, 536 F.2d 373 (1976), for stating the elements used to establish the chief use of a class or kind of merchandise: "(1) the general physical characteristics of the merchandise; (2) the expectations of the ultimate purchaser, (3) the channels of trade, and (4) how it is advertised and used." According to the petitioner, application of these factors would require that a Halloween costume be classified as an article of apparel in Chapter 61 or 62.

Finally , petitioner states that Court of International Trade (CIT) decisions interpreting the Tariff Schedules of the United States (TSUS), are inapplicable when classifying costumes under the HTSUS. Petitioner argues that Customs should not consider the CIT's decisions in Traveler Trading Co. V. United States, 713 F.Supp. 409 (CIT 1989), and I.C.I. worldwide, Inc. V. United States, 14 CIT 201 (1990), because both were decided under the TSUS. Specifically, it is petitioner's contention that the courts' decisions in those cases rested on the " ...very broad and preclusive nature of the TSUS's definition of `toys'." Petitioner further asserts that the classification of costumes under the HTSUS is very different from the TSUS because costumes are never classifiable as toys under the HTSUS and costumes are specifically excluded from classification as articles of fancy dress of textiles pursuant to Note 1(e) to Chapter 95.

Pursuant to Section 175.21(a), Customs Regulations (19 CFR 175.21(a)), before making a determination on the matter, Customs invites written comments on the petition from interested parties.

The domestic party petition, as well as all comments received in response to this notice will be available for public inspection in accordance with the Freedom of Information Act (5 U.S.C. 552), 1.4, Treasury Department Regulations (31 CFR 1.4), and Section 103.11(b), Customs Regulations (19 CFR 103.11(b)), between the hours of 9:00 a.m. to 4:30 p.m. on regular business days, at the: U.S. Customs Service, Office of Regulations and Rulings, Commercial Rulings Division, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC.

The principal author of this document was Ann Segura Minardi, Textiles Branch, Office of Regulations and Rulings, U.S. Customs Service. However, personnel from other Customs offices participated in its development.

Approved: December 5, 1997

Acting Deputy Assistant Secretary of the Treasury

Dennis M. O'Connell