CLA-2 RR:CR:GC 962208K
Port Director
Port of New York
U.S. Customs Service
6 World Trade Center
New York, NY 10048
RE: Review of Protest 1001-98-101682; Rosenthal USA Ltd.; Chinaware
Dear Port Director:
The following is our response to the referral by your office, dated September 9, 1998, of the request for further review of the above-referenced protest.
FACTS:
The consumption entry covering the imported merchandise was liquidated on March 6, 1988, under the provision for porcelain or china tableware and kitchenware, for hotel or restaurant ware and not household ware, in subheading 6911.10.10, Harmonized Tariff Schedule of the United States (HTSUS) (1997), with duty at the general rate of 32% ad valorem. A timely protest under 19 U.S.C. 1514 was received on June 4, 1998. The protestant requested reliquidation of the entry under the provision for porcelain or china tableware and kitchenware, other household ware, in subheading 6911.10.38, HTSUS, with duty at the general rate of 6.8% ad valorem. A meeting was held on November 3, 1999, with counsel representing the protestant to discuss the merits of the issues followed by a further submission dated December 22, 1999.
The manufacturer is Rosenthal Ag, Germany and the protestant is Rosenthal, USA. A brochure or catalog entitled Sanssouci, Daten and Fakten 93/94, Rosenthal Classic, Rosenthal AG Hotel & Restaurant Service, a Rosenthal Hotel & Restaurant Service catalog, pages 5 through 143 dated 3/97 (hereinafter referred to as the commercial catalog), a Rosenthal Price Book (hereinafter referred to as the retail catalog), with a list price, effective May 1, 1996, were submitted. The file under review contains two samples of Rosenthal Classic dinner plates described as “Commercial,
Monbijou, 11420-30027” and “Retail Monbijou, 10420-10226”. Although the invoices list articles, including plates in the commercial Monbijou pattern, the invoices do not include the specific plates as represented by the samples.
The protestant, Rosenthal USA Ltd, maintains two divisions, one for retail (which may be considered as household ware) and one for commercial (which may be considered as hotel ware). The chemical composition of the chinaware is stated to be identical for both retail (household) and for commercial (hotel ware). The protestant opines that both the retail and the commercial chinaware are household ware, and that hotels and restaurants purchase the chinaware “ because of its sleek, lightweight appearance and design which result in an elegant product of the kind recognized by sophisticated individuals as that which is used in their own homes for special occasions.” The protestant suggests that the Monbijou and the Sanssouci patterns, as advertised in the commercial and retail catalogs, are similar and that the patterns in the retail are household and therefor, the patterns in the commercial catalog are also household and not hotel ware.
In the submission dated August 11, 1998, the protestant indicated that in 1997, the company’s (total) sales were 61.5% retail and 38.5% commercial. In a submission dated December 22, 1999, it was indicated that the ratio of sales for the Sanssouci patterns in 1998, was 78% for commercial and 22% for retail. However, through September 1999, the ratio of sales for commercial was 38% and 62% for retail. No statistics were submitted to show the percentages of commercial versus retail sales for the patterns and articles listed in the commercial catalog. Likewise, no statistics were submitted to show the percentages of commercial versus retail sales for the patterns and articles listed in the retail catalog. Specifically, no statistics were submitted to show the percentages of commercial versus retail sales for the Sanssouci articles listed in the commercial catalog or for the Sanssouci articles listed in the retail catalog.
The commercial Monbijou dinner plate, as represented by the sample is approximately 10 ½ “ in diameter including the rim of 1¼ “ leaving 8 ¼ “ of serving capacity. There is a foot (on the bottom or back side of the plate) of approximately
6 ¾” in diameter, and the plate weighs approximately 1 pound and 9.5 ounces. The bottom or backside of the plate contains the glazed logo “Rosenthal, Classic, Hotel & Restaurant Service, Germany ©”.
The retail Monbijou dinner plate, as represented by the sample is approximately 10 ½ “ in diameter including the rim of 1½” leaving 7” of serving capacity. There is a foot (on the bottom or backside of the plate) of approximately 6 inches in diameter, and the plate weighs approximately 1 pound and 3 ounces. The bottom or back side of the plate contains the glazed logo “Rosenthal, Classic, Germany, 1”
Both plates are entirely white except for the green colored logos, which are registered trademarks. The plates are not decorated although there are some designs on the rims. The commercial catalog refers to the plate as a “plate flat” and the retail
catalog refers to the plate as a “dinner plate 10.25”. The rim of the commercial 10 ½” flat plate is thicker than the rim of the retail 10 1/4 “ dinner plate. The commercial plate weighs more and has more serving capacity than the retail dinner plate.
The commercial catalog offers a potential commercial customer the option to purchase the chinaware with the logo or name of the establishment glazed and fired on the dinnerware that will not fade away with everyday use. The retail catalog does not offer a similar service. The commercial white chinaware for the Monbijou and Sanssouci patterns is advertised as microwave and dishwasher proof. The retail white chinaware for the Monbijou and Sanssouci patterns are advertised as dishwasher proof (but does not include microwave proof) and there is no option for a logo. The commercial catalog for these patterns does not indicate that handcare was recommended or that the articles were dishwasher safe (as compared with dishwasher proof). Some of the articles in decors other than white in the retail catalog indicate that handcare is recommended and they are dishwasher safe (as compared with dishwasher proof). The commercial catalog has additional columns concerning weight and stackability of the dinnerware that are not found in the retail catalog.
In the catalogs and the invoices, the “form” numbers indicate the style patterns, the “decor” numbers indicate whether the articles are white, colored or decorated and the “article” number indicates the type of article such as a plate or saucer, etc. When the same pattern or style is listed in both the commercial and retail catalogs, different form and article numbers are used for identification purposes. For example, the commercial catalog uses form # 11420 to identify the Monbijou style and article # 30027 is used to identify a 27 cm (10 ½”) flat plate, whereas, in the retail catalog, form # 10420 is used to identify the Monbijou style and article # 10226 is used to identify a “dinner plate 10.25”. Not all of the form style patterns are listed in both catalogs.
The invoices list the forms, decor, and types of articles covered by the entry and subject to the protest as follows.
Form 61000 is found in the retail catalog (Rosenthal Price Book) at page 13 c as Rosenthal Versace Casual but the specific decors # 406120, # 406121 and # 406123 are not listed in the catalog. The dinnerware is sold in 5 piece settings and advertised as dishwasher proof. The catalog does not indicate whether the articles are microwave proof, the weights and stackability of the articles are not indicated and only one size dinner plate is available depending upon the decor. The Rosenthal Versace Casual pattern is not found in the commercial catalog.
Form 03500, with decors # 403500 through # 403508, and a variety of articles, is found in the retail catalog at pages 22 and 23 as Rosenthal Renaissance. The dinnerware is sold in 5 piece settings, is available in multiple designs and colors and advertised as dishwasher proof. The catalog does not indicate whether the articles are microwave proof and the weights and stackability of the articles are not indicated. The Rosenthal Renaissance pattern is not found in the commercial catalog.
Form 13450, with decor # 80 0001 (white), article # 30029, is found in the commercial catalog at page 21, as the Rosenthal Laola studio-line pattern. Article 30029 is listed as a 29 cm (11 ½”) flat plate. The flat plate is available in six different sizes and the catalog indicates the weight and stackability for each plate. The catalog indicates that the article is microwave and dishwasher proof. The Rosenthal Laola pattern is not found in the retail catalog.
Form 89000, with decor # 80 0001 (white), article # 38906 (cappuccino saucers), is found in the commercial catalog at page 97, as the Sonderatikel Special Items. No information is indicated concerning microwave or dishwasher proof. The weight is indicated but the stackability is not included for any of the articles listed in this pattern as special items. The Sonderatikel Special Items are not found in the retail catalog.
Form 11420, with decor # 80 0001 (white), articles # 34415 (creamers), # 34001 (bases for coffee pots), # 3402 (lids for coffee pots), # 30606 and # 33012 (bowls), # 34611 and # 34609 (saucers), # 31230 (soup plates), # 33150 (pasta/salad bowls), # 30512 (fruit bowls), # 30019, # 30022, # 30025, (flat plates of various dimensions, however, the sample Monbijou 27 cm flat plate, article # 30027 is not included in the invoices), # 34211 (teapot bases), # 34212 (tea pot lids), # 34627 (cups), and # 34652 (coffee mugs), is found in the commercial catalog at page 57 as the Rosenthal Classic Monbijou pattern. The flat plate is available in 6 sizes and the catalog indicates that the articles are microwave and dishwasher proof and lists the total weight and stackability of the articles. The Rosenthal Classic Monbijou pattern is found as form # 10420 in the retail catalog at page 21. None of the articles in the retail Monbijou Classic pattern are included in the invoices. The retail catalog only provides for one size plate, a “dinner plate 10.25”. The retail Monbijou pattern is available in 5-piece place settings and the weights and stackability of the articles are not listed in the retail catalog. Further comparisons of the commercial and retail Monbijou patterns are discussed above.
Form 10630, with decor # 80 0001 (white), article # 31230 (a soup plate), is found in the commercial catalog at page 45 as the Rosenthal Classic Epoque pattern. The catalog indicates that the soup plate is available in 3 sizes, is microwave and dishwasher proof, and lists the total weights and stackability. The Epoque pattern is not found in the retail catalog.
Form 12480, with decor # 80 00001 (white), articles # 30029 (27 cm flat plates), # 34211 (teapot bases), # 34212 (teapot covers), and # 34611 (saucers), is found in the commercial catalog at page 63 as the Rosenthal Classic Sanssouci pattern. The flat plate is available in 6 sizes and the catalog lists the weights and stackability of the articles. The capacities for the tea pots and soup bowls are indicated. The white articles, decor # 80 0001, are microwave and dishwasher proof. None of the articles in the commercial catalog for form 12480 indicate that handcare is recommended. The Rosenthal Classic Sanssouci pattern is found as form 10480 in the retail catalog at page 25. None of the articles in the retail Sanssouci pattern are included in the invoices. The retail catalog only provides for one size for a “dinner plate 10.25”. The retail Sanssouci pattern is available in 5-piece place settings. The weights and stackability of the articles are not listed in the retail catalog. The white decor is listed as dishwasher proof but not listed as microwave proof. The weights and stackabilites of the articles are not indicated. The decors for the four colored decorated patterns are not listed as dishwasher proof or microwave proof. Two of the decorated patterns indicate they are dishwasher safe and the two others indicate that handcare is recommended.
Form 18610, with decor # 80 0001 (white), articles # 30016 (16 cm flat plates), # 30026 (26 cm flat plates), # 30123 (23 cm soup plates), # 30512 (fruit compotiers), # 34415 (creamers), # 35072 (trays), # 32628 (28 cm oval plates), and # 32633 (33 cm oval plates), is found in the commercial catalog at page 15, as the Rosenthal studio-line Cupola pattern. The white decor is indicated as dishwasher and microwave proof, flat plates are available in 6 different sizes and the weights and stackability are indicated. The Rosenthal studio-line Cupola pattern is also found in the retail catalog at page 16 as form 18600 but this form is not included in the invoices. There is only one size plate available in the retail catalog referred to as a (dinner plate 12.25”) and the pattern is available in 5-piece place settings. The pattern is dishwasher proof but not microwave proof and the weights and stackability are not indicated.
Form 18510, with decor # 80 0001 (white), articles # 30016 (16.3 cm flat plates), # 346673 (tasse cups), # 34611 (tasse saucers) is found in the commercial catalog at page 11, as the Rosenthal studio-line Ametria pattern. The white articles are dishwasher and microwave proof, flat plates are available in 6 different sizes and the weights and stackability of the plates are indicated. All of the white and colored-decorated articles in form 18510 are dishwasher microwave proof and handcare is not recommended for any of the articles. The Ametria pattern is not found in the retail catalog. However form 18500, the Rosenthal studio-line Asymmetria pattern, page 15 of the retail catalog is similar but this form is not included in the invoices. Only one “dinner plate 10.5” is available and the pattern is available in 5 piece place settings. The white décor is dishwasher proof but not microwave proof. Handcare is recommended for the decor 405801 (white-gold), and dishwasher safe is indicated for the decor 405811 (gold-ribbon).
ISSUE:
Whether the tableware and kitchenware of porcelain or china is principally used as hotel or restaurant ware or as household ware.
LAW AND ANALYSIS:
The classification of imported merchandise under the HTSUS is governed by the principles set forth in the General Rules of Interpretation (GRI). GRI 1 requires that classification be determined first according to the terms of the headings of the tariff
schedule and any relative section and chapter notes and, unless otherwise required, according to the remaining GRI, taken in their appropriate order. Accordingly, we first have to determine whether the articles are classified under GRI 1. We are satisfied that the classification is by virtue of GRI 1 as reflected in our determination that follows.
Subheading 6911.10 at the international level and at the HTSUS level, provide for tableware and kitchenware of porcelain or china. Subheading 6911.10, HTSUS, is further broken out at the eight-digit level. Subheading 6911.10.10, HTSUS, provides for tableware and kitchenware and other ware not household ware. Household tableware and kitchenware of porcelain and china are provided for in subheadings 6911.10.15 through 6911.10.80, HTSUS. (Emphasis added.) Subheading 6911.10. 38, HTSUS, provides for household tableware and kitchenware available in specified sets with an aggregate value over $200.
Rules 1. (a) and ( b) of the Additional U.S. Rules of Interpretation, HTSUS, provides the following;
1. 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; (Emphasis added.)
(b) a tariff classification controlled by the actual use to which the imported goods are put in the United States 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;
The subheadings of 6911.10, HTSUS, at the eight digit-level are “use” provisions. See Lenox Collections v. United States, 19 CIT 345 (1995). These competing provisions of the tariff are use provisions. Once the facts determine the principal use of the tableware, it follows that the merchandise is classified by virtue of GRI 1. This issue, the principal use of hotel versus household tableware, was thoroughly covered in Headquarters Ruling Letter 959745, dated July 20, 1998, and we quote the following from that ruling;
While Additional U.S. Rule of Interpretation 1(a) provides general criteria for discerning the principal use of an article, it does not provide specific criteria for individual tariff provisions. However, the U.S. Court of International Trade (CIT) has provided factors, which are indicative but not conclusive, to apply when determining whether particular merchandise falls within a class or kind. They include: general physical characteristics, the 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, Kraft, Inc, v. U.S., USITR, 16 CIT 483, (June 24, 1992) (hereinafter Kraft); G. Heilman Brewing Co. v. U.S., USITR, 14 CIT 614 (Sept. 6, 1990); and U.S. v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979; Lenox Collections v. United States, 20 CIT, Slip Op. 96-30 (Feb. 2, 1996).
The best facts available for the class or kind to which the Rosenthal dinnerware patterns and articles belong that determine principal use are the differences and comparisons of the articles listed in the Rosenthal commercial and retail catalogs. These differences were described in extensive detail under the facts above. Generally, the dinnerware listed in the commercial catalog are thicker, heavier, stackable, microwave proof, dishwasher proof, do not require handcare, have a greater serving capacity and a greater variety of accessories are available (such as matching vases and ashtrays) as compared to the dinnerware listed in the retail catalog. The patterns and articles listed in the two catalogs are not interchangeable. The hotel or restaurant owner using the Monbijou pattern listed in the commercial catalog cannot replace any broken plates by ordering plates from the retail catalog.
In their catalogs, Rosenthal Ag, the German manufacturer, and its subsidiary-importer, Rosenthal USA, have created a catalog identifying their patterns and articles of dinnerware that meet the needs of hotels and restaurants and a catalog identifying their patterns and articles of dinnerware for household use. The importer is in the position to show by statistics that the sale of such articles listed in the commercial catalog are principally sold in their retail outlets. No such information has been submitted.
The criteria for principal use as cited by the court appears to be met in this case. In the absence of other information for specific patterns and articles, we believe that the best available evidence to show principal use for the articles covered by the consumption entry, are the protestants own commercial and retail catalogs
HOLDING:
The Rosenthal chinaware articles covered by the consumption entry that are described above and as listed in the protestant’s catalog, Rosenthal Hotel & Restaurant Service, March 1997, are classified under the provision for porcelain or china tableware and kitchenware, for hotel or restaurant ware and not household ware, in subheading 6911.10.10, HTSUS.
The Rosenthal chinaware articles covered by the consumption entry that are described above and as listed in the protestant’s catalog, The Rosenthal (retail) Price Book, February 1998, are classified under the provision for porcelain or china tableware and kitchenware, other household ware, in subheadings 6911.10.35, 6911.10. 37, and 6911.10.38, HTSUS, depending on the aggregate value of the articles listed in Additional U.S. Note 6(b) of Chapter 69.
You are directed to allow and disallow the protest in part based on these holdings.
Headquarters Ruling Letter 959745 dated July 20, 1998, is followed and affirmed.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, Revised Protest Directive, dated August 4, 1993, a copy of this decision attached to Customs Form 19, Notice of Action, should be provided by your office to the protestant no later than 60 days from the date of this decision and any reliquidations of entries in accordance with this decision must be accomplished prior thereto.
Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make this decision available to Customs personnel, and to the general public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act and other public access channels.
.
Sincerely,
John Durant, Director
Commercial Rulings Division