CLA-2 OT:RR:CTF:TCM H266006 CkG
Carmen A. Trutanich,
Tucker Ellis, LLP
515 South Flower Street
Los Angeles, CA 90071-2223
Re: Modification of NY N261965; classification of plastic cartridge for ear piercing gun
Dear Ms. Trutanich,
This is in response to your request of April 30, 2015, on behalf of Onyx Industries, Inc., for the reconsideration of New York Ruling N261965, dated March 27, 2015, concerning the classification of the System 75 cartridge with earring and clutch. You request clarification of the ruling, specifically as to whether the System 75 is classified as a part of an ear piercing gun, or whether it is classified as part of a set along with the included earring.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to modify NY N261965 was published on April 12, 2017, in Volume 51, Number 15 of the Customs Bulletin. One comment was received in response to this notice.
FACTS:
In NY N261965, the subject merchandise is described as follows:
The merchandise concerned is a plastic cartridge containing a piercing earring and clutch used within an ear-piercing instrument. The backend of the stud is sharpened to a point that enables the earring to pierce through an earlobe without a preexisting hole. The piercing studs are made of stainless steel or titanium posts, and the clutches are made of stainless steel, of which some of the posts and clutches are gold-plated. Some of the posts are further embellished with foreign origin faux jewels made of glass or of Cubic Zirconia (CZ) which is considered a simulated (synthetic) precious gemstone of diamond. Some imitation jewels are also made of plastic, such as those that are sold as faux pearls. Two System 75 Display(s) are sealed together in an adjoining, perforated sterile blister pack and are meant to be sold in pairs, however, one can purchase an individual Display.
Each System 75 Display, not including the foreign faux or simulated gemstone or faux pearl, consists of four plastic components (a white plastic box, a white plastic support, two clear plastic inserts) of United States origin and three base metal components (spring, stud and clutch) of United States origin, all of which are assembled in Mexico. It is unstated whether the faux gemstone or pearl or CZ is affixed to the earring post in the United States or Mexico; for purposes of this discussion the faux stone or faux pearl or CZ will be considered affixed to the post within the United States. The unassembled cartridge itself prior to being assembled in Mexico consists of a white plastic box, a white plastic support, two clear plastic inserts and a base metal spring. In Mexico the plastic cartridge with base metal spring (five pieces) is assembled, and the base metal piercing earring along with its base metal clutch are positioned and placed appropriately within the cartridge. After which two System 75 Display(s) are sealed together in an adjoining, perforated sterile blister pack. In total seven United States components are assembled together to form the System 75 Display.
The System 75 is designed to be incorporated into a Studex ear piercing gun. The System 75 holds the earring in the correct position, and when the trigger of the ear piercing gun is pulled, the metal spring in the System 75 is activated and pushes the earring into the ear.
ISSUE:
Whether the System 75 is classified in heading 8479, HTSUS, heading 7116, HTSUS, or heading 7117, HTSUS.
Whether the System 75 is classified by application of GRI 1, GRI 3(b), or GRI 5(b).
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of
Interpretation (GRI). GRI 1 provides that classification 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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
7116: Articles of natural or cultured pearls, precious or semiprecious stones (natural,
synthetic or reconstructed):
7116.20: Of precious or semiprecious stones (natural, synthetic or reconstructed):
Articles of jewelry:
7116.20.05: Valued not over $40 per piece…
* * *
7117: Imitation jewelry:
Of base metal, whether or not plated with precious metal:
7117.19: Other:
Other:
7117.19.90: Other…
* * *
8205: Hand tools (including glaziers' diamonds), not elsewhere specified or included; blow
lamps; vices, clamps and the like, other than accessories for and parts of, machine tools;
anvils; portable forges; hand or pedal-operated grinding wheels with frameworks.
8205.59: Other:
Of iron or steel:
8205.59.45: Caulking gun…
8205.59.55: Other…
* * *
8479: Machines and mechanical appliances having individual functions, not specified or
included elsewhere in this Chapter:
Other machines and mechanical appliances:
8479.89: Other…
* * * *
General Rule of Interpretation (GRI) 5 provides as follows:
5. In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein :
(a) Camera cases, musical instrument cases, gun cases, drawing instrument
cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character;
(b) Subject to the provisions of Rule 5 (a) above, packing materials and packing
containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.
Note 2 to Chapter 82 provides as follows:
Parts of base metal of the articles of this Chapter are to be classified with the articles of which they are parts, except parts separately specified as such and tool-holders for hand tools (heading 84.66). However, parts of general use as defined in Note 2 to Section XV are in all cases excluded from this Chapter
Note 11 to Chapter 71 provides as follows:
For the purposes of heading 71.17, the expression “imitation jewellery” means articles of jewellery within the meaning of paragraph (a) of Note 9 above (but not including buttons or other articles of heading 96.06, or dress-combs, hair-slides or the like, or hairpins, of heading 96.15), not incorporating natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed) nor (except as plating or as minor constituents) precious metal or metal clad with precious metal.
* * * *
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The Explanatory Note to GRI 5(b) reads as follows:
RULE 5 (b)
(Packing materials and packing containers)
(IV) This Rule governs the classification of packing materials and packing containers of a kind normally used for packing the goods to which they relate. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use, for example, certain metal drums or containers of iron or steel for compressed or liquefied gas.
(V) This Rule is subject to Rule 5 (a) and, therefore, the classification of cases, boxes and similar containers of the kind mentioned in Rule 5 (a) shall be determined by the application of that Rule.
The EN to heading 7116, HTSUS (EN 7116), provides, in pertinent part:
The heading covers all articles…wholly of natural or cultured pearls, precious or semi-precious stones, or consisting partly of natural or cultured pearls or precious or semi-precious stones, but not containing precious metals or metals clad with precious metal…
It thus includes: (A) Articles of personal adornment and other decorated articles…containing natural or cultured pearls, precious or semi-precious stones, set or mounted on base metal (whether or not plated with precious metal), ivory, wood, plastics etc.
The EN to heading 7117, HTSUS (EN 7117), provides, in pertinent part:
For the purposes of this heading, the expression imitation jewellery…[does] not incorporate precious metal or metal clad with precious metal…nor natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed).
* * * *
In NY N261965, CBP determined that the System 75 with the included earrings was a composite article classified in either heading 7116 or heading 7117, HTSUS, depending on the composition of the gemstone, by application of GRI 3(b) (finding that the earring with the faux gemstone imparted the essential character to the article). You request “clarification” of the holding in NY N261965, suggesting that either the System 75 Display should be classified at GRI 1 as a part of the earring gun in heading 8479, HTSUS, or that it be considered “ordinary packaging” for the earring, and thus classified in heading 7117, HTSUS, by application of GRI 5(b).
In NY N261965, it was noted that the System 75 would be considered a dedicated part of a complete ear piercing gun. You suggest if this is the case, then classification in heading 8479, HTUSS, as a part of a machine with an individual function not elsewhere specified, should be considered.
The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Techs. Ltd. v. United States (“Bauerhin”), 110 F. 3d 774 (Fed. Cir. 1997). The first, articulated in United States v. Willoughby Camera Stores, Inc. (“Willoughby”), 21 C.C.P.A. 322, 324 (1933), requires a determination of whether the imported item is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 778 (quoting Willoughby, 21 C.C.P.A. 322 at 324). The second, set forth in United States v. Pompeo (“Pompeo”), 43 C.C.P.A. 9, 14 (1955), states that an “imported item dedicated solely for use with another article is a ‘part’ of that article within the meaning of the HTSUS.” Id. at 779 (citing Pompeo, 43 C.C.P.A. 9 at 13). Under either line cases, an imported item is not a part if it is “a separate and distinct commercial entity.” Bauherin, 110 F. 3d at 779.
The System 75 is designed to be used in conjunction with an ear piercing gun. The ear piercing gun cannot function without the cartridge or the earrings. The cartridge, holds the earrings in the correct position and propels the earrings into the ear when the ear piercing gun is triggered. Even though the System 75 can function without the Studex ear piercing gun, the fact that the System 75’s purpose is to secure the operation of the Studex gun is enough to establish that the component is integral to the machine. See Bauerhin at 1451. We therefore agree that the System 75 is a part of a complete ear piercing gun. A complete ear piercing gun, however, is classified in heading 8205, HTSUS, as a hand tool. See e.g., NY N211356, dated April 6, 2012. See also HQ 950032, dated October 30, 1991, and NY C83998, dated February 23, 1998 (tagging guns). A part of an ear piercing gun cannot be classified as a part of machine of heading 8479, HTSUS, if the machine itself is not classified therein.
The System 75 is not a machine of heading 8479, HTSUS. The System 75 operates by way of a simple spring mechanism. Pursuant to the decision of the United States Customs Court in Border Brokerage Company v. United States, C.D. 2046 (1958), a simple spring operated mechanism is not considered a machine for the purposes of the HTSUS (“The simple kind of mechanical action involved in the release of the energy stored up in a spring, when in fact nothing more is accomplished than that something held in a downward position by a heavy weight is pulled erect, prompts us to agree with defendant that a spring stake bunk does not rise to the dignity of a machine.”). The System 75 operates by way of a similar spring mechanism to that at issue in Border Brokerage Company, it is not sold, marketed, or recognized in the trade as a machine, and therefore is not classifiable as a machine of Chapter 84.
As there is no heading which provides for the System 75 at GRI 1, we turn to the remaining GRIs. In NY N261965, we considered the System 75 a composite good and classified it accordingly, by application of GRI 3(b). Similarly, in NY N214377, dated May 11, 2012, CBP applied GRI 3(b) in classifying an “ear piercing cassette” and earrings included, designed for an ear piercing gun, in heading 7117, HTSUS. While we agree with the ultimate classification and the applicability of GRI 3(b), we disagree that the System 75 is a composite good. The System 75 consists of two distinct goods, classifiable in different headings, which are intended to be used together for the specific purpose of placing the earring in the ear but which are not integrated or combined together. The earring and clutch are classified in either heading 7116, HTSUS, as precious jewelry, or heading 7117, HTSUS, as imitation jewelry, depending on whether the gemstone is cubic zirconium or glass. The plastic cartridge in turn is classifiable in heading 3926, HTSUS, as an other article of plastic. The earring and clutch are placed into the plastic cartridge, which ejects the earring when the Studex ear piercing gun is triggered. We consider the earring and plastic cartridge to constitute a set under GRI 3(b). We further consider the earrings to impart the essential character to the set. The plastic cartridge is essentially a storage and delivery mechanism for the earring, which is the more valuable component, and the reason for purchasing the System 75.
In regard to the System 75 with a cubic zirconium gemstone, Legal Note 11 to Chapter 71 provides that for the purposes of heading 7117, the expression “imitation jewelry” means articles of jewelry within the meaning of paragraph (a) of note 9 (i.e., any small objects of personal adornment such as earrings), not incorporating natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed) nor (except as plating or as minor constituents) precious metal or metal clad with precious metal. A cubic zirconium is a synthetic (simulated) diamond and is categorized under precious gemstones. Accordingly, this item is precluded from classification in heading 7117 by operation of Note 11 to Chapter 71, and is classifiable as precious (synthetic) jewelry in heading 7116, HTSUS. See e.g., HQ H007655, dated September 28, 2007. When the System 75 is imported without a cubic zirconium gemstone it is classified in heading 7117, HTSUS.
Within heading 7117, HTSUS, two subheadings are implicated: 7117.19, HTSUS, which provides for other imitation jewelry of base metal, and 7117.90, HTSUS, which provides for other imitation jewelry. Pursuant to GRI 6, we apply GRIs 1 through 5 in order again at the subheading level to determine the classification. The earring consists of a base metal stud and a faux gemstone made of either glass, plastic, or cubic zirconium, and thus could fall under either subheading 7117.19, HTSUS, or 7117.90, HTSUS, at GRI 1. At GRI 3(b), we must determine the essential character of the earring in order to determine the subheading classification. As discussed in NY N261965, the base metal stud is worked into a point, which expressly fulfills the functionality of this good (i.e., to allow for the discharge of a piercing earring into one’s earlobe for establishing articles of jewelry worn for personal adornment). Accordingly, the essential character is imparted by the base metal stud. The applicable subheading for the System 75, without a cubic zirconium gemstone, will be 7117.19.90, HTSUS. We therefore agree with the finding in NY N261965 that the System 75 is classified in heading 7116 when imported with a cubic zirconium gemstone, or 7117 when imported with a plastic or glass faux gemstone.
Although you appear to agree with the classification of the System 75 in headings 7116 or 7117, HTSUS, you argue that the classification of the System 75 should be based on GRI 5(b). We note first that we have already found that the System 75 and earrings are classified in heading 7116 or 7117, HTSUS, by GRI 3(b), and therefore resort to GRI 5 is unnecessary. GRI 5(b) is further inapplicable in this case because the System 75 is not a packing container normally used for packing jewelry.
GRI 5(b) provides that packing materials and packing containers presented with the goods therein will be classified with the goods if they are of a kind normally used for packing such goods. In NY N261965 we determined that the article at issue is the combination of the plastic cartridge and earrings—i.e., a composite good. You argue instead that the earrings are the article or good to be examined, and that the System 75 plastic cartridge is merely the packaging for said article under GRI 5(b) and should be classified with the earrings.
The concept of "usual" containers includes a variety of containers such as plastic envelopes for carrying rainwear when not in use, cases designed for electric shavers, and tobacco tins, which may continue to be used by the purchaser to "house" the original contents but which, when that purpose has been fulfilled, are usually discarded because of their lack of durability or their general unsuitability for other uses. A container is not "of a kind normally used for packing" when it possesses independent commercial appeal and adds significantly to the value of the goods. See HQ 560811, HQ 085766, dated February 1, 1990 (bubble bath container). The System 75 cartridge is not so flimsy as to be inherently disposable, and it is capable of being reused with any other set of earrings. It also adds value to the earrings by integrating with the Studex ear piercing gun, thus providing the mechanism by which the earrings are placed in the ear. The convenience of piercing the ear and fitting the earrings in one motion, in the comfort of home, is likely to be an advantage and selling point of the System 75 and the Studex ear piercing gun. The System 75 has multiple functions in relation to the earrings—it serves as packaging, display, and delivery mechanism—i.e., it allows the user to pierce the ears and place the earrings in the ear in one motion. It is more than simply packaging, and it is not the “usual” or “ordinary” packaging for jewelry. It is the blister packs that the System 75 cartridges are placed in that constitute the packaging for the cartridge and earrings. The System 75 is thus not classifiable at GRI 5. See e.g., Bruce Duncan Co. v. United States, 63 Customs Ct. 412, C.D. 3927 (1969), Amersham Corporation v. United States, 728 F.2d 1453, 1456 (Fed, Cir. 1984), Mita Copystar Am. v. United States, 160 F.3d 710, 713 (Fed. Cir. 1998), which classified printer toner cartridges and butane fuel cartridges as parts of printers and cigarette lighters at GRI 1. Although the instant cartridges are not classifiable at GRI 1, they are classifiable at GRI 3 and therefore classification under GRI 5 is precluded. See also HQ H273316, dated
July 19, 2016.
HOLDING:
By application of GRI 1 and GRI 3(b), the System 75, when imported with a cubic zirconium gemstone, is classified in heading 7116, HTSUS, specifically subheading 7116.20.05, HTSUS, which provides for “Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed): Of precious or semiprecious stones (natural, synthetic or reconstructed): Articles of jewelry: Valued not over $40 per piece.” The 2016 general, column one rate of duty is 3.3% ad valorem.
By application of GRI 1 and GRI 3(b), the System 75, when imported with a faux gemstone made of glass or plastic, is classified in heading 7117, HTSUS, specifically subheading 7117.19.90, which provides for “Imitation jewelry: Of base metal, whether or not plated with precious metal: Other: Other: Other.” The 2016 general, column one rate of duty is 11% ad valorem.
EFFECT ON OTHER RULINGS:
NY N261965, dated March 27, 2015, 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.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division