CLA-2 CO:R:C:G 083149 JMH

Richard G. Seley
Rudolph Miles & Sons, Inc.
Customhouse Brokers
4950 Gateway East
P.O. Box 144
El Paso, Texas 79942

RE: Champagne glasses and cake knife

Dear Mr. Seley:

Your letter of November 25, 1988, requesting a classification ruling under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) for the Love's Remembrance champagne glasses and cake knife has been referred to this office for a reply.

FACTS:

The merchandise in question are two champagne glasses and a cake knife packed together for retail sale. The goods are intended to be a gift for use at a wedding reception. The glasses are for drinking champagne and the knife for cutting the wedding cake.

The glasses, whose country of origin is Mexico, are less than 24 percent lead monoxide and have a value of $0.40 each. One glass is marked with the word "Bride" and the other is marked with the word "Groom". White ribbons are tied around the stem of each glass.

The knife, whose country of origin is Japan, has a fixed blade made of base metal and a plastic handle. The knife is marked with the words "Love's Remembrance."

The champagne glasses and cake knife are packed within U.S. origin packaging.

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ISSUE:

Issue 1: Whether the champagne glasses and cake knife packed together for retail sale are a "set" within the meaning of General Rule of Interpretation 3(a) of the HTSUSA.

Issue 2: Whether U.S. origin packaging would be entitled to any allowance under subheading 9801.00.10, HTSUSA, as "Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad..."

LAW AND ANALYSIS:

Issue 1:

The classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUSA, states in part that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes...and according to the following provisions." The "following provisions" includes GRI 3(a) and GRI 3(b), HTSUSA, which refer to articles in sets "for retail sale..." GRI 3(a) provides that the heading which most specifically describes the goods is preferred and headings for goods in a set are to be considered equally specific. GRI 3(b) states that:

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, as far as this criterion is applicable.

The Explanatory Notes to the HTSUSA must be studied in order to determine what is a "set" so to implement these rules, The Explanatory Notes, although not dispositive, are to be looked to for the proper interpretation of the HTSUSA. 54 Fed. Reg. 35127, 35128 (August 23, 1989). The Explanatory Note for Rule 3(b) gives a three part test for "goods put up in sets for retail sale." Harmonized Commodity Description and Coding System (HCDCS), Vol. 1, p. 4. The three step definition states:

For the purposes of this Rule, the term 'goods put up in sets for retail sale' shall be taken to mean goods which:

(a) consist of at least two different articles which are prima facie, classifiable in different headings.

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(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards). (emphasis added)

Since these three steps are listed in the conjunctive, all three must be met. The cake knife is classifiable within heading 8211.91.50, HTSUSA, and the champagne glasses are classifiable within heading 7013.29.20, HTSUSA. The goods are packaged together for sale directly to users without any further repacking. Therefore, parts (a) and (c) are clearly fulfilled by the champagne glass and cake knife package.

The problem arises with part (b) of the definition. Glasses and knives do not fulfill the same particular need or specific activity. This office does not consider the concept of a wedding celebration as a specific activity or particular need for the products. These items are used for two distinct activities, drinking champagne and cutting cake. Therefore, they do not form a "set" within the meaning of GRI 3(b). This causes the rules regarding "sets" to be inapplicable.

In view of the foregoing, the champagne glasses and cake knife must be classified separately although they are packed together. The appropriate classification for the champagne glasses is within subheading 7013.29.20, HTSUSA, as "Glassware of a kind used for table, kitchen...or similar purposes... Drinking glasses, other than of glass-ceramics...Other...Valued over $0.30 each but not over $3 each." The cake knife is classified within heading, 8211.91.50, HTSUSA, "Knives with cutting blades...Table knives having fixed blades...Knives with rubber or plastic handles."

Issue 2:

Regarding the duty that may be placed upon U.S. packaging, subheading 9801.00.10, HTSUSA, provides duty-free treatment to U.S. products that are exported and returned without having been advanced in value or improved in condition by any means while abroad, provided there is compliance with the documentary requirements of 19 C.F.R. 10.1. We have previously held that American containers that meet all of the criteria for classification under subheading 9801.00.10, HTSUSA, will be afforded duty-free treatment under that tariff provision. Merely filling the containers with its contents does not constitute an advancement in the condition of the container. C.S.D. 89-26, 23 Cust. Bull. & Dec., No. 10, p. 35 (1989).

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HOLDING:

The champagne glasses and cake knife packaged together to be sold for a wedding gift must be classified separately as the articles do not meet the requirements for a "set". The items do not fulfill the same particular need nor are they used for the same specific activity. The champagne glasses are classifiable under subheading 7013.29.20, HTSUSA, as "Glassware of a kind used for table, kitchen...or similar purposes...Drinking glasses, other than of glass-ceramics...Other...Valued over $0.30 each but not over $3 each." The rate of duty is 30 percent ad valorem. The cake knife is classifiable within subheading 8211.91.50, HTSUSA, as "Knives with cutting blades...Table knives having fixed blades...Knives with rubber of plastic handles." The rate of duty is $0.01 each plus 5.7 percent ad valorem. The packing materials are duty free.

The U.S. packaging that meets the requirements of subheading 9801.00.10, HTSUSA, and the documentation requirement of 19 C.F.R. 10.1 will be eligible for duty-free treatment when imported into the United States.

Sincerely,

John Durant, Director
Commercial Rulings Division