CLA 2 RR:CR:GC 963254 JGB
Port Director
U.S. Customs Service
Port of Minneapolis
330 Second Ave., South
Minneapolis, MN 55401
RE: Protest 3501-98-100155; festive articles
Dear Director:
This is our decision on Protest 3501-98-100155 against your decision in the classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS). The entries, made in 1997, were liquidated on August 28, 1998, and the protest timely filed on November 27, 1998.
FACTS:
The protest covers merchandise that was largely the subject of New York Ruling Letters (NY) 818736 and 818737, both issued February 14, 1996. The merchandise at issue in this protest consists of ornamental tassels and balls of gold braid and a rope garland sold to distributors for sale to retail shops during the Christmas season as Christmas tree ornaments.
Style 86573, consists of a decorative tassel ornament composed of man-made fiber yarns wrapped in lurex metallic yarns. This tassel contains a plastic ball on top measuring about 2.5" in diameter which is wrapped with lurex (metallic) wrapped man-made fiber yarns. Out of this ball portion hang two fringed tassels. This decorative tassel, which measures about 5.5" in overall length contains a loop for hanging.
Style 86567, consists of a tassel ornament composed of materials similar to style 86573. It consists of a decorative ball-like portion at the top measuring about 1" in diameter having a singular hanging fringed tassel. It measures about 5.5" in overall length and contains a loop for hanging purposes.
Style 86569, consists of a tassel ornament composed of materials similar to style 86573. Based on the photograph provided, it appears to consist of a decorative ball-like portion at the top measuring about 1" in diameter, beneath which is another portion of circular wrapping of the gold colored cord. At the bottom hangs a singular fringed tassel. Its measurements appear to be similar to the other tassels and it contains a loop for hanging purposes.
Style 86572, consists of an approximately 6' long twisted cord with a tassel on each end. The product is made of metalized yarns.
Following the existing rulings, you classified styles 86569, 86573, and 86567 in subheading 5808.90.00, HTSUS, which provides for “... tassels, pompons and similar articles.” You classified style 86572 in subheading 5609.00.40, HTSUS, which provides for articles of yarn, strip or the like of heading 5404 or 5405, twine, cordage, rope or cables, not elsewhere specified or included, of other than vegetable or man-made fibers.
The protestant claims classification for each of the articles in subheading 9505.10.25, HTSUS, the provision for “Festive, carnival or other entertainment articles...parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof: Christmas ornaments: Other: Other.”
ISSUE:
Whether the garlands and tassels are classified within chapters 56 or 58, in the provision for ropes or the provision for tassels, respectively, or, in the alternative, as festive articles within heading 9505.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) taken in their appropriate order provide a framework for classification of merchandise under the HTSUS. Most imported 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, provides, among other things, for festive, carnival or other entertainment articles. Articles for Christmas festivities are specifically provided for in subheading 9505.10, HTSUS. Although the articles that are the subject of this protest are described by the respective headings in which the entries were liquidated, consideration must be given to relevant section and chapter notes.
Note 1(u) to Section XI, HTSUS, which includes headings 5609 and 5808, provides that this section does not cover articles of Chapter 95. Thus, if the tassels and garlands are classifiable under heading 9505, then note 1(u) to Section XI precludes classification under any heading in Section XI and necessitates classification under Chapter 95.
In Midwest of Cannon Falls, Inc. v. United States, Slip Op. 96-19 (Ct. Int’l Trade, 1996), aff’d in part, rev’d in part, 122 F.3d 1423, Appeal Nos. 96-1271, 96-1279 (Fed. Cir. 1997) (hereinafter Midwest), the Court addressed the scope of heading 9505, HTSUS, specifically the class or kind of merchandise termed “festive articles,” and provided new guidelines for classification of such goods in the heading. In general, merchandise is classifiable as a festive article in heading 9505, HTSUS, when the article, as a whole:
1. Is not predominately of precious or semiprecious stones, precious metal or metal clad with precious metal;
2. Functions primarily as a decoration or functional item used in celebration of, and for entertainment on, a holiday; and
3. Is associated with or used on a particular holiday.
Based upon a review of the articles subject to the Midwest decision, Customs is of the opinion that the Court has included within the scope of the class “festive articles,” decorative household articles which are representations of an accepted symbol for a recognized holiday, and utilitarian/functional articles that are three-dimensional representations of an accepted symbol for a recognized holiday. See Customs Bulletin, Volume 32, Numbers 2/3, dated January 21, 1998.
In addition to the criteria listed above, the Court considered the general criteria for classification set forth in United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979 (hereinafter Carborundum). Therefore, with respect to decorative and utilitarian articles related to holidays and symbols not
specifically recognized in Midwest or in the Customs Bulletin dated January 21, 1998, Customs will also consider the general criteria set forth in Carborundum to determine whether a particular good belongs to the class or kind “festive articles.” Those criteria include the general physical characteristics of the article, the expectation of the ultimate purchaser, the channels of trade, the environment of sale (accompanying accessories, manner of advertisement and display), the 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.
With respect to the tassels and garlands, both are purely decorative articles. The articles could be used in decorative settings not associated with a particular holiday; therefore, they are not automatically eligible for heading 9505, unless convincing Carborundum evidence is also present. In the context of this case, it is clear that the tassels and garlands are used with other Christmas articles, to decorate a home and specifically to decorate a Christmas tree. The channels of trade are well established. Customs visits to the showrooms of the importer, as well as photographs provided of the showrooms picturing this merchandise decorating Christmas trees, demonstrate that the manner of advertisement and display is consistent with festive use. The physical characteristics of the article further support the festive designation. The loops that easily permit the tassels to hang on a tree establish their use as Christmas ornaments and reduce the likelihood that they are destined for use in non-festive settings. As a whole, the evidence provided here is sufficient to make a determination that these tassels and garlands are to be used in connection with the recognized holiday of Christmas.
It is quite possible that this or similar merchandise may be imported in the future for other uses that would be inconsistent with festive celebrations. These uses would be evidenced by sale at other times of the year, not in connection with the holiday and out of the channels of trade that have been established here, among other things. In the event that inconsistent uses reverse the Carborundum evidence, tassels and garlands of this type would fail to be pulled out of the heading for tassels or for rope and would remain classified as indicated in the New York rulings cited supra.
The protestant claimed that the New York rulings, supra, were revoked by operation of law as enunciated by the Midwest decision. The clearest situation in which this would happen is when the subject of a particular Customs ruling was also the subject of the court case in question and the court decided a different classification from Customs. For example, a Customs ruling on a Christmas water globe classifying it as ornamental glassware would be void by operation of law, because the Midwest court ordered such an article to be reclassified as festive. More difficult to apply is when the concept or theory is overruled by the court. In the instant case, the New York rulings relied upon, specifically found the tassels and garlands to fail to qualify as festive articles because they were “not considered to be traditional festive Christmas decorations.” The Midwest court held that the “traditional” standard, as enunciated in the EN’s to heading 9505, could not be used to limit what could be classified as a Christmas ornament under heading 9505. Therefore, Customs agrees with the protestant that the New York rulings, supra, have been revoked by operation of law and cannot be relied on by either Customs or the public.
Because the merchandise qualifies for classification in heading 9505, HTSUS, Note 1(u) to Section XI, HTSUS, precludes classification in headings 5609 and 5808, Section XI, HTSUS.
In view of the Carborundum evidence presented and the fact that the particular tassels and garlands have been shown to be used in connection with Christmas holiday decoration, they must be classified in heading 9505, HTSUS, specifically in subheading 9505.10.25, HTSUS, the provision for “Festive, carnival or other entertainment articles...parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof: Christmas ornaments: Other: Other.”
HOLDING:
The protest should be ALLOWED. The entries should be reliquidated according to the classification as indicated herein.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of
the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division