GOBLINS, GHOSTS YET TO SCARE UP HIGHER DUTIES \ CUSTOMS STILL REVIEWING COSTUME CLASSIFICATION

GOBLINS, GHOSTS YET TO SCARE UP HIGHER DUTIES \ CUSTOMS STILL REVIEWING COSTUME CLASSIFICATION

It looks like those flimsy Halloween costumes that turn children into goblins and ghouls will still be crossing U.S. borders without expensive duties and quotas this summer.

Customs is mulling over more than 750 responses it received to a petition urging change to a 1994 ruling that classifies certain Halloween costumes as festive articles or toys, instead of apparel.By classifying the nondurable costumes as toys, the goods escape the higher duties slapped on apparel and don't have to compete for the limited quota allocated to major apparel suppliers like China.

Customs accepted public comment on the issue until Feb. 20 after a domestic costume maker, Rubie's Costume Co. of Queens, N.Y., filed a petition with Customs last year asking them to change their 1994 ruling.

In that ruling, Customs reversed previous regulations classifying all costumes with textiles as wearing apparel, meaning they could get hit with duties of up to 30 percent.

A FRONT-BURNER ISSUE

''This is a front-burner issue for us and we're trying to push it forward,'' said a Customs officials, who declined to be identified. Customs' Office for Rulings and regulations is reviewing the comments, many of which are form letters signed by individuals whom support the domestic industry.

Domestic players such as Rubie's believe the retailers importing the flimsy costumes without duties have an unfair advantage, while the domestics have to pay tariffs on the fabric, thread and other supplies used to make a costume in the United States.

Marc Beige, president of Rubie's Costumes, has said imports of the costumes from China jumped by 100 percent to $100 million for the two-year period ending in 1996.

On the other hand, importers and retailers say the introduction of tariffs and quotas will make the flimsy costumes, which are usually thrown away after one wearing, too expensive. ''That's the end of it,'' said New York attorney John Pellegrini, referring to trade in the costumes if Customs classifies them as wearing apparel.

SOME COSTLY COSTUMES

Mr. Pellegrini, customs counsel for the U.S. Association of Importers of Textiles and Apparel, said the items will be prohibitive if importers have to pay extra duty plus the cost of quota for items that retail for much less than a shirt or dress competing for the same quota slot.

A spokeswoman for the International Mass Retail Association in Arlington, Va., could not be reached for comment.

Trade experts say importers, gearing up to bring in the first shipments this summer, will probably escape the higher duties this year even if Customs decides to change the classification. The Customs official said the textile classification branch must finishing reviewing the case and then make a recommendation to Acting Customs Commissioner Samuel H. Banks, who will then forward the recommendation onto officials at the Department of Treasury for their approval.

If Customs agrees with the domestic industry, the reclassification would have to be published in the Federal Register and it would then become effective 30 days later, Mr. Pellegrini said.

MAKING THE NEXT MOVE

If Customs disagrees with Rubie's and upholds classifying the costumes as toys, then Rubie's must make the next move.

After Customs notifies the domestic costumer maker of an incoming shipment of flimsy costumes, then Rubie's can file a protest with Customs.

Once Customs denies the protest, Rubie's can then take its claim to the Court of International Trade.

''That could take a long time,'' said Mr. Pellegrini.