CLA-2 RR: CR: GC 967379 DBS
Ms. Cari Grego
Dollar Tree Stores, Inc.
500 Volvo Parkway
Chesapeake, VA 23320
RE: Modification of NY J82021; Pumpkin Carving Set
Dear Ms. Grego:
On April 10, 2003, the Director, National Commodity Specialist Division, issued to you New York Ruling Letter (NY) J82021, classifying a pumpkin carving kit under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) according to General Rule of Interpretation (GRI) 3(c). We have reviewed the ruling and found the classification of the kit with the battery operated light to be incorrect. This ruling sets forth the correct classification. In addition, please note that the analysis used to classify all three sets in NY J82021 is modified herein.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of the above identified ruling was published on January 5, 2005, in the Customs Bulletin, Volume 39, Number 2. Two comments were received in response to the notice. The concerns raised are addressed herein.
FACTS:
The merchandise classified in NY J82021 is described as pumpkin carving kits. All three are identified by the same two model numbers: Item No. H1124 and 813659. The first kit consists of a manual drilling tool with a plastic drill tip, a wood hammer and 50 plastic pegs. The second kit consists of a manual drilling tool with a plastic drill tip, 20 plastic pegs, a crayon and a wood scoop. The third set consists of a manual drilling tool with a plastic drill tip, 50 plastic pegs and a battery operated light to be placed inside the pumpkin to illuminate the pegs. The items of the three kits are packaged for retail sale. The kits are classified as sets according to the heading of the article or articles that provide the essential character of the set.
It was determined no component in the sets imparted the essential character. Therefore, they were classified according to GRI 3(c) by the component occurring last in numerical order among the competing headings which equally merit consideration.
ISSUE:
Whether the pumpkin carving kits have an essential character for purposes of classification according to GRI 3(b).
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation. GRI 1 provides that the classification of goods shall be determined 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.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
NY J82021 correctly concluded that the kits at issue constituted "goods put up in sets for retail sale" according to GRI 3(b). GRI 3(b) provides, in relevant part, that such sets are classified by the component that imparts the essential character of the set. If the essential character cannot be determined, GRI 3(c) provides that the set will fall to be classified in the heading that occurs last in numerical order among those which equally merit consideration. GRI 3(c) applies only where GRI 3(a) and GRI 3(b) fail. See EN to GRI 3. The ruling stated that no single component in the kits imparted the essential character, and classified the sets by GRI 3(c) under heading 9608, HTSUS, which was the last heading among the various items in each set. The application of GRI 3(c) was consistent with several rulings on pumpkin carving kits. However, we now believe the essential character can be determined, and resort to GRI 3(c) is not necessary.
EN VIII to GRI 3(b) explains that "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of the constituent material in relation to the use of the goods." Recent court decisions on the essential character for GRI 3(b) purposes have looked primarily to the role of the constituent material in relation to the use of the goods. See, e.g., Better Home Plastics Corp. v. U.S., 916 F. Supp. 1265 (CIT 1996), aff’d 119 F. 3d 969 (Fed. Cir. 1997) Mita Copystar America, Inc. v. U.S., 966 F. Supp. 1245 (CIT 1997), rehear’g denied, 994 F. Supp. 393 (CIT 1998) ), rev'd on other grounds 160 F. 3d 710 (Fed. Cir. 1998); see also Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), aff'd 171 F.3d 1370 (Fed. Cir. 1999).
Better Home Plastics involved the classification of shower curtain sets. In holding that the set was classified in heading 3924, HTSUS, which provided for the plastic liner, the Court of International Trade relied largely on previous decisions in which the essential character was the component that was indispensable to the function of the good. See United States v. Canadian Vinyl Industries, Inc., 64 C.C.P.A. 97, C.A.D. 1189, 555 F.2d 806 (1977); see also United China & Glass v. United States, 61 Cust. Ct. 386, 389, 293 F. Supp. 734, 737, Cust. Dec. 3637 (1968) (noting essential character is that attribute "which is indispensable to the structure, core or condition of the article, i.e., what it is."). It reasoned that the utilitarian role of a shower liner, that is, preventing the escape of water, protecting the curtain from mildew and soap scum, and providing privacy, is more important than the decorative value of the inexpensive and partially transparent textile curtain sold with it.
The primary purpose of a pumpkin carving kit is to carve designs, such as a jack o' lantern face, into a pumpkin. Although it may not predominate in bulk, weight or value, the carving tool, or in this case, drilling tool, fulfills this purpose. A pumpkin cannot be carved into a jack o' lantern by a pegs or crayons or a scoop. Moreover, the other components contribute to the use of the carving tool or accent the carved designs. However, without the other articles, the carving/drilling tool can still be used to carry out the kits' purpose of carving a design into a pumpkin. It is the carving tool that is indispensable to the set. Therefore, the utility of the carving/drilling tool in relation to the use of the set predominates over the remaining goods just as the plastic liner predominated over the curtain in Better Home Plastics.
Comments opposing the proposed action to modify NY J82021 and revoke CBP's treatment of pumpkin carving sets argued that, unlike the set in Better Home Plastics in which the court determined that liner served the purpose of the whole set, here a consumer must use each of the items in these sets to complete the decorating process. It was further argued that the attraction of the sets is the other products in the set, as carving tools may be purchased individually, and are sold next to the sets in a retail store. Both of the commentors suggest that, in light of the foregoing, stencils (or the like) impart the essential character of the set, or at least are equally important. We have considered these and other arguments raised in the comments and disagree. In these instances, stencils do not decorate the pumpkin, their designs must be carved into the pumpkin, making them less essential to the set than the carving tool. In this case, the drilling tool is akin to the carving tool, as discussed above.
As the essential character of the instant sets is imparted by the plastic drillling tool, the instant pumpkin carving sets are classified according to GRI 3(b) in subheading 3926.90.9880, HTSUSA, which provides for other articles of plastic.
In addition to the rulings at issue above, we reviewed other rulings issued to other importers or their representatives on pumpkin carving kits. Many of them held the kits were classified by the carving instrument, whether it was a knife of heading 8211, HTSUSA, or other hand tools of heading 8205, HTSUSA, but employed GRI 3(c) to resolve the classification. As the holding is correct but the analysis is not, the rulings need not be modified pursuant to 19 U.S.C. §1625(c). However, the analysis in the following rulings needs to be corrected: NY I89205, dated November 19, 2002; NY G87082, dated February 26, 2001; NY 818260, dated February 9, 1996; NY 807079, dated March 2, 1995; NY 817821, dated January 22, 1996; NY 899065, dated June 22, 1994 and NY 815629, dated October 19, 1995. The analysis set forth to classify several models of pumpkin carving kits in NY G81860, dated September 27, 2000, also require modification, but as other models in the ruling require new classifications, the analysis will be modified in a separate ruling pursuant to 19 U.S.C. §1625(c).
We note that certain exceptions to the analysis set forth above apply on a case-by-case basis. NY B85472, dated June 5, 1997, classified a pumpkin carving kit consisting of a plastic "Erie Eyeball Maker," plastic scoop and saw with a metal blade and plastic handle, in subheading 8211.92.4060, HTSUSA, by GRI 3(c). In that case, making eyeballs and sawing the pumpkin both accomplish the primary purpose of carving designs into the pumpkin, and are therefore equally essential to that particular set. Application of GRI 3(c) was appropriate.
In the proposed action, we also determined that GRI 3(c) was also properly applied to NY F83018, dated February 22, 2000, which classified Pumpkin Party Deluxe Carve and Stencil Kit in subheading 8524.39.8000, HTSUS. The set included a CD-ROM that generated stencils on a computer. We stated stencil making and pumpkin carving are equally important in relation to the use of that set. One commentor stated that the CD-ROM was not interactive, that it simply contained stencil designs to be printed out. As this was similar to any other stencil, the exception was not clear.
NY F83018 states that the user can "produce pictorial stencils generated from the CD-ROM program application." While the commentor's interpretation of this statement appears as equally plausible as ours, the National Commodity Specialist Division, issuer of the ruling, verified that the CD-ROM was in fact interactive. One could create stencils, but could also use preprogrammed stencils. Thus, the use of this good is not simply to carve decorations, but create that which is to be carved. We have re-evaluated our position in light of this information and herein affirm our initial determination.
The commentor further argued that applying GRI 3(c) provides certainty for importers in classifying these sets, whereas case-by-case determinations create confusion. While it would be simpler and more efficient for both importers and CBP to apply GRI 3(c) in all set cases, it is inconsistent with the laws of tariff classification, specifically GRI 3. The sections of GRI 3 are applied hierarchically. GRI 3(c) is the last resort, to be used only if we are unable to determine the essential character. Upon reconsideration, we were able to determine the essential character of the sets we reviewed. Therefore, we need not resort to GRI 3(c) for most pumpkin carving sets.
Classifying a "set for retail sale" (or composite good) by its essential character is the legal fiction created by GRI 3(b). See The Pomeroy Collection, Inc. v. United States, 246 F. Supp. 2d 1286, 1294 (CIT 2002), a'ffd by Pomeroy, 336 F.3d 1370 (Fed. Cir. 2003). Whether a group of goods is classifiable as a set, and, if so, by which component, are determinations that depend upon the various factors enumerated above. The determinations are innately "case-by-case." Though a pattern of classification often emerges where goods have similar components, as many of the aforementioned sets do, the GRIs must be applied in all instances.
HOLDING:
At GRI 3(b), the instant pumpkin carving kits are classified in subheading 3926.90.9880, HTSUSA, which provides for, "Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other: Other." The 2005 rate of duty is 5.3% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY J82021, dated April 10, 2003, is hereby MODIFIED. In accordance with 19 U.S.C 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. As this time frame is determined by statute, CBP cannot delay the effective date.
Though the classification remains unchanged, the analysis of the following rulings is hereby modified in accordance with the LAW AND ANALYSIS above as follows with respect to the specifically enumerated products:
Ruling Number
Issue Date
To Whom Addressed
Product identification
NY I89205
November 19, 2002
Paper Magic Group, Inc
Item # 6520210 "Be Neat and Carve" pumpkin carving kit
NY G87082
February 26, 2001
Expeditors International of Washington, Inc. on behalf of Pumpkin LTD, d/b/a Pumpkin Masters
Sparkling Pumpkin Jewels pumpkin carving kit
NY 818260
February 9, 1996
Silvey Shipping Co., Inc. on behalf of The Paper Magic Group, Inc.
"Carve & Candle Kit" and "Tools for Ghouls- Pumpkin Carving Kit"
NY 807079
March 2, 1995
Silvey Shipping Co., Inc. on behalf of The Paper Magic Group, Inc "Creative Pumpkin Carver," "Carve & Candle Kit" and "Tools for Ghouls-Pumpkin Carving Kit"
NY 817821
January 22, 1996
Four Star International Trading Company
"4-piece pumpkin carving kit"
NY 899065
June 22, 1994
Sunstar Industries, Inc.
"7-piece Halloween Pumpkin Carving Kit"
NY 815629
October 19, 1995
Circle International, Inc. on behalf of Sunhill Industries, Inc.
"Pumpkin carving kit"
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division