CLA-2 OT:RR:CTF:TCM H275674 CkG
Despina Keegan
Despinda Keegan, LLC
One Penn Plaza, Ste 3600
New York, NY 10119
Re: Revocation of NY M82559 and NY M84189; classification of a rolling pullman case, backpacks, a tote bag, and an insulated lunch bag.
Dear Ms. Keegan:
This is in reference to New York Ruling Letter (NY) M82559, issued to you on dated May 2, 2006, and NY M84189, issued to CVS pharmacy on June 16, 2006, regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a rolling pullman case, two backpacks, a tote bag and an insulated lunch bag.
We have reconsidered these decisions. For the reasons set forth below, we have determined that the classification of the bags in question in subheadings 4202.12.80, HTSUS (rolling bag), 4202.92.08, HTSUS (insulated lunch bag), and 4202.92.30, HTSUS (backpacks and tote bag) was incorrect.
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 revoke NY M82559 and NY M84189 was published on July 06, 2016, in Volume 50, Number 27 of the Customs Bulletin. No comments were received in response to this notice.
FACTS:
In NY M82559, the subject merchandise was described as follows:
You submitted a sample of a rolling (trolley) pullman case that has a telescopic handle and wheels and is designed to contain clothing and other personal effects during travel. It is manufactured with an exterior surface of nylon and a front panel of PVC sheeting with a printed design of Dora The Explorer. The case measures approximately 11" W x 14.5" H x 3.5" D. A zipper secures it.
You provided descriptive literature of a backpack. You state that it is a child’s backpack manufactured with an exterior surface of polyester man-made fiber textile material with a front panel of polyvinyl chloride (PVC) plastic sheeting with a Tinkerbell themed depiction. The backpack measures approximately 11" W x 14.5" H x 5.5" D. The top of the bag is secured with a zipper.
You provided descriptive literature of a tote bag. You state that it is child’s open top tote bag constructed of an exterior surface of nylon with a front panel of PVC sheeting depicting the SpongeBob Nickelodeon licensed character.
In NY M84189, the subject merchandise is described as follows:
The insulated lunch bag is designed to carry food and/or beverage. It is manufactured with an exterior surface of 100% polyester man-made fiber textile material with a front panel of polyvinyl chloride (PVC) plastic sheeting with a "Cars"© themed depiction. The bag measures approximately 10" W x 7¾" H x 4" D. The bag has a carrying handle on top and is secured by means of a zippered closure on three sides of the bag.
The backpack is manufactured with an exterior surface of polyester man-made fiber textile material with a front panel of polyvinyl chloride (PVC) plastic sheeting with a "Cars"© themed depiction. The backpack measures approximately 12" W x 15" H x 3" D. The top and sides of the bag are secured with a zipper.
ISSUE:
Whether the essential character of the instant bags is imparted by the textile material or by the plastic sheeting on the outer surface.
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 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the remaining GRIs 2 through 6. GRI 6, HTSUS, requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable. The GRI's apply in the same manner when comparing subheadings within a heading.
4202: Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper:
Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers:
4202.12: With outer surface of plastics or of textile materials:
4202.12.20: With outer surface of plastics…
With outer surface of textile materials:
4202.12.80: Other…
Other:
4202.92: With outer surface of sheeting of plastic or of textile materials:
Insulated food or beverage bags:
With outer surface of textile materials:
4202.92.08: Other . . . .
4202.92.10: Other . . .
Travel, sports and similar bags:
With outer surface of textile materials:
4202.92.30: Other…
4202.92.45: Other…
* * * * *
In NY M82559 and NY M84189, CBP classified a rolling case, a tote bag, two backpacks and an insulated lunch bag in subheadings 4202.12.80, 4202.92.08, and 4202.92.30, HTSUS, as bags with an outer surface of textile materials. The instant bags all have an exterior surface comprised mostly of textile materials and a front panel of plastic sheeting featuring a cartoon character or theme.
There is no dispute that the instant bags are classified in heading 4202, HTSUS, as insulated food or beverage bags. The issue arises at the subheading level, which requires the application of GRI 6. GRI 6 requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable.
At the eight-digit subheading level, the issue is whether the instant bags have an outer surface of textile or non-textile material. Because the instant bags have outer panels of both textile and plastic, classification is determined by application of GRI 3.
GRI 3 states:
When by application of [GRI] 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods . . . , those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components . . . which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
The subheadings covering the instant bags refer only to part of the
materials or components contained therein. Therefore, under GRI 3(a), these subheadings must be regarded as equally specific in relation to the article, and the article must be classified as if it consisted of the material or component which gives it its essential character, pursuant to GRI 3(b).
The “essential character” of an article is “that which is indispensable to the structure, core or condition of the article, i.e., what it is.” Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (Ct. Int’l Trade 2005). 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.” The classification of the instant bags will thus turn on which component imparts the essential character to the whole.
CBP has generally determined that the material comprising the bulk of the exterior surface area of a bag imparts the essential character. See e.g., HQ 962817, dated January 14, 2002 (“Customs believes that the four panels with an outer surface of plastic impart the essential character. These panels comprise the bulk of the outer surface of the bag. We also note that the material of these four panels is thicker and more rigid than the material used for the two side panels. Thus, we believe that these panels contribute significantly to the shape or form of the bag. Lastly, we note that when the bag is “collapsed” for storage, only the top and bottom panels (with an outer surface of plastic) are visible”); HQ H025873, dated September 3, 2010 (classifying a cooler bag in accordance with the majority of the exterior surface area). However, the plastic front panel of an insulated food or beverage bag might impart the essential character to the whole in cases where the style of the front panel significantly outweighs the remaining factors. See e.g., HQ H088427, dated May 29, 2015.
In NY M82559 and NY M84189, CBP held that the essential character of the bags in question was determined by the textile material which comprised the majority of the external surface area of the bags, even though the plastic front panels featured visually appealing designs such as cartoon characters. However, as noted in HQ H088427, the relative external surface area is not the only factor in the classification of such bags. In this case, the plastic front panels of the instant bags feature the popular cartoon characters Dora the Explorer, Tinkerbell, and Spongebob, and characters from the Cars movie. These bags have an immediate visual appeal that is geared towards children, a particularly demanding and vociferous group of customers who are not likely to concern themselves with the composition, cost, sturdiness, or durability of a bag as opposed to the appeal of the design and the specific character represented. Unlike HQ H088427, HQ H025873, or HQ 962817, where the visual appearance of the front panel of the bags differed only in minor respects from the remainder of the exterior, the plastic front panel of the instant bags is clearly distinct and given the factors discussed above, is likely to play a significant role in the decision to purchase and use the bag.
This conclusion is consistent with past rulings wherein CBP has determined that the essential character of similar bags was determined by a plastic front panel with a similarly appealing design. See e.g., HQ 964768, dated April 26, 2001 (backpack featuring the “Pooh” and “Tigger” characters on the front); NY N261757, dated March 19, 2015 (insulated cooler bag featuring Darth Vader on the front panel); NY N237048, dated February 06, 2013 (tote bag featuring several Disney Princesses on the front).
HOLDING:
By application of GRI 1, GRI 3(b) and GRI 6, the rolling Pullman case is
classified in heading 4202, HTSUS, specifically subheading 4202.12.20, HTSUS, which provides for “Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers: With outer surface of plastics or of textile materials: With outer surface of plastics.” The 2016, column one, general rate of duty is 20% ad valorem.
By application of GRI 1, GRI 3(b) and GRI 6, the insulated lunch bag is
classified in heading 4202, HTSUS, specifically subheading 4202.92.10, HTSUS, which provides for “Trunks,…and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Other: With outer surface of sheeting of plastic or of textile materials: Insulated food or beverage bags: Other.” The 2016, column one, general rate of duty is 3.4% ad valorem.
The backpacks and tote bag are classified in heading 4202, specifically subheading 4202.92.45, HTSUS, which provides for “Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers…: Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other.” The 2016 column one, general rate of duty is 20% 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 online at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY M82559, dated May 2, 2006, and NY M84189, dated June 16, 2006, are hereby revoked.
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