CLA-2 OT:RR:CTF:FTM H287971 GaK

Port Director, Port of Norfolk-Newport News
U.S. Customs & Border Protection
101 E. Main St.
Norfolk, VA 23510

RE: Application for Further Review of Protest No. 1401-16-100087; Classification of premium cold packs (ice bags)

Attn.: Stacey Carter, Senior Import Specialist

Dear Port Director:

This is in response to the Application for Further Review (“AFR”) of Protest No. 1401-16-100087, filed on July 25, 2016, on behalf of Precept Medical Products, Inc. (“Precept” or “Protestant”). This AFR concerns U.S. Customs & Border Protection’s (“CBP”) tariff classification of cold packs (ice bags) under the Harmonized Tariff Schedule of the United States (“HTSUS”).

FACTS:

This AFR concerns the tariff classification of ice bags entered on June 19, 2015, and liquidated April 29, 2016. The ice bags were entered under subheading 6307.90.98, HTSUS, which provides for “[o]ther made up articles, including dress patterns: Other: Other” and liquidated under the same heading. In its AFR, the Protestant states that the ice bags are correctly classified in subheading 3926.90.21, HTSUS, which provides for “[o]ther articles of plastics and articles of other materials of headings 3901 to 3914: Other: Ice bags; douche bags, enema bags, hot water bottles, and fittings therefor; invalid and similar nursing cushions; dress shields; pessaries; prophylactics; bulbs for syringes; syringes (other than hypodermic syringes) and fittings therefor, not in part of glass or metal.”

The Protestant describes the ice bags as follows:

[t]he goods at issue in this protest are premium cold packs (ice bags) imported by Precept from China. They consist of a tough plastic bag, or bladder, to be used to hold ice, with an attached rigid plastic clip for fastening the top of the plastic bag and keeping the ice to be placed within the bag securely within it; the clip also prevents leakage of water as the ice that has been placed within the bag melts. The plastic ice bag is imported together with a nonwoven textile bag which holds and contains the plastic ice bag. The textile bag consists of two layers of nonwoven fabric: a soft outer layer, and an absorbent inner layer. Four nonwoven textile ties are sewn on to all four corners of the textile bag for attachment of the ice pack (plastic ice bag and nonwoven textile bag holder) to a human body.

The cold packs are imported for use in hospitals and other health care settings. They are disposable ice packs, meant to be secured to whichever part of a patient’s body (knee, leg, arm, elbow, etc.) will benefit from the therapeutic qualities (reduction in swelling, etc.) of the application of ice.

ISSUE:

Whether the ice bags are classified under heading 3926, HTSUS, as “[o]ther articles of plastics and articles of other materials of headings 3901 to 3914” or heading 6307, HTSUS, as “[o]ther made up articles, including dress patterns”?

LAW AND ANALYSIS:

Initially, we note that the matter protested is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after June 19, 2015. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).

Further Review of Protest No. 1401-16-100087 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with certain CBP rulings concerning allegedly similar merchandise, including Headquarters Ruling Letter (“HQ”) W968209, dated May 29, 2007; HQ H055380, dated August 8, 2013; HQ 089319, dated August 14, 1991; HQ 964054, dated March 2, 2001; HQ 956845, dated December 22, 1994; New York Ruling Letter (“NY”) N110545, dated July 9, 2010; and NY N013182, dated July 11, 2007.

Classification under the HTSUS is governed by the General Rules of Interpretation (“GRIs”). 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.

GRI 3(b) and (c) provide as follows:

When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: … (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, 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 Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are generally indicative of the proper interpretation of these headings. See T.D. -80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The ENs to GRI 3(b) provide, in pertinent part, that:

(VII) In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (VIII) The 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 a constituent material in relation to the use of the goods.

The 2015 HTSUS headings under consideration are as follows:

3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:

* * *

6307 Other made up articles, including dress patterns:

The ice bags are comprised of several component articles that are prima facie classifiable under two or more headings. Heading 3926, HTSUS, describes the plastic bag used to hold ice. Heading 6307 describes the nonwoven textile bag, to contain the plastic bag, with ties sewn on the four corners for attachment of the ice bag to a person. Because the ice bags are prima facie classifiable under more than one heading, GRI 3 is implicated. Specifically GRI 3(b) directs that composite goods made up of different components shall be classified as if they consisted of the material or component that gives them their essential character. GRI 3(b) covers mixtures, composite goods, and goods put up in sets for retail sale. For purposes of this rule, EN IX to GRI 3(b) provides that, “composite goods made up of different components shall be taken to mean not only those in which the component are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.” As such, the ice bags are properly described as composite goods because they consist of plastic and textile components, that are attached to each other to form an inseparable whole.

Under GRI 3(b), composite goods must be classified according to the material or component that imparts the article with its essential character. 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.” 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 Estee Lauder, Inc. v. United States, 815 F. Supp. 2d 1287, 1296 (Ct. Int'l Trade 2012); Structural Industries, 360 F. Supp. 2d 1330; Conair Corp. v. United States, 29 C.I.T. 888 (2005); Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278 (Ct. Int'l Trade 2006), aff'd 491 F.3d 1334 (Fed. Cir. 2007).

Prior rulings that have classified heating or cooling composite goods have differentiated between goods on the basis of whether the article as a whole appears to function primarily as a means to provide heat or cold. In such instances, the heating/cooling element imparts the essential character. See HQ 964851, dated April 18, 2001; HQ 966262, dated May 29, 2003; HQ 957182, dated March 6, 1995; HQ 959825, dated May 19, 1999; HQ 964054, dated March 2, 2001; HQ 956845, dated December 22, 1994; HQ 957478, dated September 7, 1995. However, the ice bags at issue are not imported with a heating/cooling element. The user must fill up the plastic bag with ice in order to use it as an ice bag and it is not meant to be used as heat therapy. Protestant cited CBP rulings claimed to be inconsistent with the port’s decision, however the cited rulings considered heating or cooling composite goods imported with a heating/cooling element, and the goods were classified according to the heating/cooling element. For instance, in HQ W968209 CBP considered a heat therapy patch that contained iron powder, water, salt, activated charcoal, and vermiculite; in HQ H055380, CBP considered a cold and hot compress which contained a gel-filled plastic pouch that can be frozen or boiled in hot water; and in HQ 964054, CBP considered a pack, consisting of water and polyurethane foam sealed in a polyurethane film bag, which can be microwaved or chilled.

HQ 089319 is also distinguishable from the ice bags in this case. In HQ 089319, cited by Protestant, CBP considered a hot water bottle with a textile covering and found that the textile covering was merely a decorative cover for the hot water bottle and classified the good according to the hot water bottle because it provided the essential character of the set. We find that HQ 089319 is not applicable in this case because the textile covering in HQ 089319 was merely decorative and did not serve any function. Unlike the textile covering in HQ 089319, the textile portion of the ice bags at issue serve the function of protecting the user from ice burn and as a result allowing the patient to benefit from the ice placed in the plastic bag. Ice packs are used to treat muscle strains or sprains and patients are instructed to always keep a cloth between the skin and the ice pack. Therefore, the plastic bag used to hold ice in this case is impractical and hazardous without the textile bag.

Based on the meaning of “essential character” under GRI 3(b), we find that the ice bags are primarily used to protect the user from making direct contact with the ice pack by attaching the plastic bag to the textile bag. It is also consistent with NY N233378, dated October 17, 2012, which considered nearly identical ice bags composed of a polyester pouch and a plastic reclosable liner bag. The plastic reclosable liner bag was to be filled with ice and then placed inside the polyester pouch, which was designed to be tied to the patient. The product was found to be a composite good and the essential character imparted by the textile pouch. The Protestant argued that NY N233378 is not applicable to the product at hand because the ruling is inconsistent with other rulings regarding composite goods for heating or cooling. However, as discussed above, the rulings cited by the Protestant are not applicable to this case because the ice bags at issue were not imported with a heating/cooling element. Therefore, we find that the textile bag confers the essential character to the ice bags and classified according to the textile bag. The ice bags are classified under subheading 6307.90.98, HTSUS, which provides for “[o]ther made up articles, including dress patterns: Other: Other: Other.”

HOLDING:

By application of GRI 1 and GRI 3(b), the subject ice bags are classified under heading 6307, HTSUS, specifically under subheading 6307.90.98, HTSUS, which provides for “[o]ther made up articles, including dress patterns: Other: Other: Other.” The 2015 column one, general rate of duty is 7% 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 internet at www.usitc.gov/tata/hts/.

You are instructed to DENY the protest.

In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP 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 Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division