CLA-2 RR:CR:GC 961234 PH
Arlen T. Epstein, Esq.
Serko & Simon L.L.P.
One World Trade Center, Suite 3371
New York, N.Y. 10048
RE: Glassware covered with glass beads; metal stand; tea light
candles; candle holder; glassware for table, kitchen,
toilet, office, indoor decoration; table, kitchen or other
household articles of iron or steel; principal use;
essential character; goods put up in sets for retail sale;
U.S. Additional Note 1(a); GRI 3(b); ENs Rule 3(b)(VIII);
Rule 3(b)(IX); Rule 3(b)(X); Better Home Plastics Corp. v.
United States; HQ 961211
Dear Mr. Epstein:
This is in reference to your request on behalf of Russ
Berrie and Company, Inc., to the Director, Customs National
Commodity Specialist Division, New York, N.Y., dated October 30,
1997, for a ruling as to the classification under the Harmonized
Tariff Schedule of the United States (HTSUS), of bead-covered
glassware and candles. Samples were provided. Your letter was
referred to this office for reply. In preparing this decision,
consideration was also given to your supplemental submission of
December 8, 1997. We regret the delay.
FACTS:
The merchandise consists of the following:
Item 13991 - This article is a cylinder-shaped article of
glassware (flat-bottomed with a slightly outward turned lip,
2 7/8" top diameter (including lip) and 2 5/8" in height.
It fits in a metal stand 5" high and 3" in diameter with
four legs. Around the top half of the stand (where the
glassware fits) are strung pink beads.
Item 13992 - This article is a pumpkin-shaped (flat base,
rounded sides, opening of the same width as the base)
article of glassware, 3" top diameter, 4 1/4" diameter at
mid-point, 3 3/4" in height. Around the glassware (not
including the base or opening) are strung pink beads.
Item 13993 - This article is a pumpkin-shaped (flat base,
rounded sides, opening of the same width as the base)
article of glassware, 2 1/4" top diameter, 3 1/4" diameter
at mid-point, 3" in height. Around the glassware (not
including the base or opening) are strung pearl-colored
beads.
Item 13994 - This article is a metal stand in a shape
similar to that of a desk lamp with a cylinder-shaped holder
of metal (1 3/4" in diameter and 3/4" in height) where the
light bulb would be in such a lamp. The article is stated
to have a glass container (not with sample) which, according
to the illustrations accompanying your letter, would fit
into this holder. Over the holder (with the top open) is a
"lamp shade" strung with pink and pearl-colored beads.
In the case of each article, light from a candle inside the
glassware and beads is diffused but visible. You state that a
"votive" candle will accompany each article and that they will be
imported packed for retail sale. We note that the sample
candles, rather than being "votive"-style candles, are similar to
tea-light candles, 1 1/2" in diameter and 3/4" in height and
melted into a metal cylinder-shaped container.
You state that the beads in each article are of glass. You
contend that classification should be on the basis of the beads,
in that "the essential character of the [articles] is clearly
imparted by the glass beads, which dominate all of the items in
terms of visual effect and in the case of ... three ..., in terms
of value." On this basis, you contend classification should be
in subheading 7018.90.50, HTSUS.
The subheadings under consideration are as follows:
3406.00.00 Candles, tapers and the like.
The 1998 general column one rate of duty for goods classifiable
under this provision is 1.2% ad valorem.
7013.99.50 Glassware of a kind used for table, kitchen,
toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018): ... Other glassware: ... Other: ... Other:
... Other: ... Valued over $0.30 but not over $3
each.
The 1998 general column one rate of duty for goods classifiable
under this provision is 30% ad valorem.
7018.90.50 Glass beads ... and articles thereof other than
imitation jewelry ...: ... Other: ... Other.
The 1998 general column one rate of duty for goods classifiable
under this provision is 6.6% ad valorem.
7323.99.90 Table, kitchen or other household articles and
parts thereof, of iron or steel; ...: Other: ...
Other: ... Not coated or plated with precious
metal: ... Other: ... Other.
The 1998 general column one rate of duty for goods classifiable
under this provision is 3.4% ad valorem.
9405.50.40 Lamps and lighting fittings including searchlights
and spotlights and parts thereof, not elsewhere specified or included; ...: ...
Non-electrical lamps and lighting fittings: ...
Other: ... Other.
The 1998 general column one rate of duty for goods classifiable
under this provision is 6.3% ad valorem.
ISSUE:
Whether the beaded glass and metal articles with candles are
classifiable as candles in subheading 3406.00.00, HTSUS,
glassware of a kind used for indoor decoration or similar
purposes in subheading 7013.99.50, HTSUS, other glass beads and
articles thereof in subheading 7018.90.50, HTSUS, other table,
kitchen or other household articles of iron or steel in
subheading 7323.99.90, HTSUS, or other non-electrical lamps and
lighting fittings in subheading 9405.50.40, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). 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, taken in order.
Pursuant to GRI 3(b), goods which are prima facie classifiable
under two or more headings shall be classified as if they
consisted of the material or component which gives them their
essential character.
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 under the System. Customs believes
the ENs should always be consulted. See T.D. 89-80, published in
the Federal Register August 23, 1989 (54 FR 35127, 35128).
Subheadings 7013.99.50, 7323.99.90, and 9405.50.40, HTSUS,
as applicable to the merchandise under consideration, are
controlled by use (other than actual use) (see Group Italglass
U.S.A., Inc. v. United States, 17 CIT 1177, 839 F. Supp. 866
(1993); E.M. Chemicals v. United States, 923 F. Supp. 202 (CIT
1996); Stewart-Warner Corp. v. United States, 3 Fed. Cir. (T) 20,
25, 748 F.2d 663 (1984)). In such provisions, articles are
classifiable according to the use of the class or kind of goods
to which the articles belong. If an article is classifiable
according to the use of the class or kind of goods to which it
belongs, Additional U.S. Rule of Interpretation 1(a), HTSUS,
provides that:
In the absence of special language or context which
otherwise requires-- (a) a tariff classification controlled
by use (other than actual use) is to be determined in
accordance with the use in the United States at, or
immediately prior to, the date of importation, of goods of
that class or kind to which the imported goods belong, and
the controlling use is the principal use.
In other words, the article's principal use in the U.S. at
the time of importation determines whether it is classifiable
within a particular class or kind (principal use is distinguished
from actual use; a tariff classification controlled by the latter
is satisfied only if such use is intended at the time of
importation, the goods are so used and proof thereof is furnished
within 3 years after the date the goods are entered (U.S.
Additional Note 1(b); 19 CFR 10.131 - 10.139)).
The Courts have provided factors, which are indicative but
not conclusive, to apply when determining whether merchandise
falls within a particular class or kind. They include: general
physical characteristics, expectation of the ultimate purchaser,
channels of trade, environment of sale (accompanying accessories,
manner of advertisement and display), use in the same manner as
merchandise which defines the class, economic practicality of so
using the import, and recognition in the trade of this use. See
Lenox Collections v. United States, 19 CIT 345, 347 (1995);
Kraft, Inc, v. United States, 16 CIT 483 (1992), G. Heileman
Brewing Co. v. United States, 14 CIT 614 (1990); and United
States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d
373 (1976), cert. denied, 429 U.S. 979 (1976).
This office recently has exhaustively reviewed the principal
use of articles such as those under consideration (glassware in
various forms contended to be principally used as candle
holders). In the March 25, 1998, edition of the CUSTOMS
BULLETIN, Volume 32, Number 12, page 32, Customs issued a notice
under 19 U.S.C. 1625 proposing to modify or revoke two
Headquarters and five New York ruling letters, to classify the
articles described therein as other glassware of a kind used for
indoor decoration or similar purposes in subheading 7013.99,
HTSUS, instead of as candle holders in subheading 9405.50.40,
HTSUS. The comments submitted in response to this notice
provided considerable information regarding the "pertinent
factors" (see above) related to the principal use of the class or
kind of goods to which the goods considered in the proposed
rulings belong. Based on this information, Customs has concluded
that the class or kind for goods such as those under
consideration is defined by the form or shape of the article
(e.g., bell-shape, similar to bell-shape, flower pot shape, tulip
or flower petal shape, cube or rectangle shape, disk shape, bowl
shape, and other shapes) and its size. We have found there to be
a clear distinction between glassware used as candle holders and
that used for general indoor decoration based on the size of the
articles, in the absence of other pertinent evidence or
information. Glassware with an opening of 4 inches or less in
diameter and a height or depth of 5 inches or less is used
substantially more frequently as a candle holder than for any
other purpose, according to the information we have obtained, and
larger glassware is used substantially more frequently for
general indoor decoration. See the July 15, 1998, edition of the
CUSTOMS BULLETIN, Volume 32, Number 28, page 12, wherein the
March 25, 1998, CUSTOMS BULLETIN notice was withdrawn.
The glass components of the articles under consideration are
of the shape or form and within the dimensions for glassware
which, based on the information obtained in response to the March
25, 1998, CUSTOMS BULLETIN, indicates their inclusion in the
class or kind of goods principally used as candle holders.
Additionally, the beaded covering provides, in the words of
advertising literature for similar articles, "[a] dramatic
display for candles[,]" also supporting principal use as candle
holders. The articles (without candles) are classifiable as non-electrical lamps and lighting fittings in subheading 9405.50.40,
HTSUS. See, e.g., Headquarters Ruling Letter (HQ) 961211 dated
July 23, 1998. Because Note 1(e) of Chapter 70, HTSUS, provides
that that chapter does not cover lamps or lighting fittings or
parts thereof of heading 9405, the articles may not be classified
as glass beads and articles thereof in subheading 7018.90.50,
HTSUS, as you suggest.
The beaded articles are imported with candles. Assuming
that the beaded articles and candles are packaged in a manner
suitable for sale directly to users without repacking, they make
up "goods put up in sets for retail sale" for purposes of GRI
3(b) (see EN Rule 3(b)(X)). Candles are classified as
"[c]andles, tapers and the like" in subheading 3406.00.00, HTSUS.
Therefore, the beaded articles and candles are, prima facie,
classifiable under different headings. Under GRI 3(b),
classification is determined on the basis of the component which
provides the essential character. EN Rule 3(b)(VIII) lists as
factors to help determine essential character the nature of the
materials or components, their bulk, quantity, weight or value,
and the role of a constituent material in relation to the use of
the goods.
Recently, there have been several Court decisions on
"essential character" for purposes of GRI 3(b). Better Home
Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996),
affirmed 119 F.3d 969 (Fed. Cir. 1997), involved the
classification of shower curtain sets, consisting of an outer
textile curtain, inner plastic magnetic liner, and plastic hooks.
Customs had classified the sets on the basis of the textile
curtain under the "default rule of GRI 3(c)", after determining
that neither the relative specificity test nor the essential
character test was applicable (119 F.3d at 971). The CIT found
that the plastic liner performed the indispensable function of
keeping water inside the shower and therefore held that the
plastic liner imparted the essential character upon the set. In
its decision affirming the CIT decision, the CAFC stated:
The [CIT] carefully considered all of the facts, and, after
a reasoned balancing of all the facts, concluded that Better
Home Plastics offered sufficient evidence and argument to
overcome the presumption of correctness. The court
concluded that the indispensable function of keeping water
inside the shower along with the protective, privacy and
decorative functions of the plastic liner, and the
relatively low cost of the sets all combined to support the
decision that the plastic liner provided the essential
character of the sets. ... The court's decision did not
rely solely, or even hinge, on the indispensability of the
water-retaining function. The decision was substantially
based on the importance of the other functions as well as
the cost of the entire set. [119 F.3d at 971]
Other decisions in which the Court looked primarily to the
role of the constituent material in relation to the use of the
goods to determine essential character include Mita Copystar
America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997),
motion for rehearing and reconsideration denied, 994 F. Supp. 393
(CIT 1998), and Vista International Packaging Co., v. United
States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also,
Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), in
which the Court found that, although GRI 3(b) could not be
applied, if a GRI 3(b) analysis were performed, the essential
character would be based upon the composite good's function.
Based on the foregoing, we conclude that in an essential
character analysis for purposes of GRI 3(b), the role of the
constituent materials or components in relation to the use of the
goods is generally of primary importance, but the other factors
listed in EN Rule 3(b)(VIII) should also be considered, as
applicable. In this case, the "indispensable function" (Better
Home Plastics, supra) of the set and the roles of the components
thereof are not conclusive. That is, the function of the candle
is to provide light (and scent) and the role of the beaded glass
and/or metal articles is to hold the candle. However, a candle
is consumed as it is used, so that the beaded glass and/or metal
article could continue to be used, whether to hold another candle
or for some other use, after the candle is consumed.
The other factors listed in EN Rule 3(b)(VIII), however, may
be used to establish essential character. Quantity is not
conclusive (there is one of each component). The remaining
factors (bulk, weight, and value) support the beaded glass and/or
metal component as being determinative of essential character.
In this regard, we note that for each article the values of the
beads, glassware, and metal components (if applicable) are
considerably greater than the value of the candles and that in
both Better Home Plastics decisions, the Court took note of value
as a factor in the determination of essential character (916 F.
Supp. 1268; 119 F.3d at 971). Accordingly, we conclude that
essential character is provided by the beaded glass and/or metal
component. The articles are classified as non-electrical lamps
and lighting fittings in subheading 9405.50.40, HTSUS.
HOLDING:
Each of the beaded glass and/or metal articles with candles
are classified as other non-electrical lamps and lighting
fittings in subheading 9405.50.40, HTSUS, provided that, in
regard to classification of the candles as components of sets,
the components are packaged in a manner suitable for sale
directly to users without repacking.
Sincerely,
John Durant, Director
Commercial Rulings Division