CLA 2 RR:CR:GC 963174 JGB
Port Director
U.S. Customs Service
Port of Minneapolis
330 Second Ave., South
Minneapolis, MN 55401
RE: Protest 3501 98 100052; Santa Pocket Watch Ornament with 15 inch Chain; festive articles
Dear Director:
This is our decision on Protest 3501 98 100052 against your classification of a Santa Pocket Watch Ornament under the Harmonized Tariff Schedule of the United States (HTSUS). The entries, made in 1997, were liquidated on February 27, 1998, and the protest timely filed on April 24, 1998.
FACTS:
The merchandise at issue consists of a battery-operated quartz analog pocket watch (item 84043) in a gold-toned base metal case with a gold-toned base metal chain. The chain is about 15 inches in length and has an attached clip for affixing the watch to the wearer's clothing. The item is sold in a gift box along with an extra battery and a base metal hook designed for hanging on a Christmas tree. It can be used either as a pocket watch for telling time or as a Christmas tree ornament. The case cover has a molded raised face of Santa on the outside which opens to reveal on the inside of the case the words "December 25." The face of the article has the words "Christmas Time" below the center of the dial and the commercial logo "Department 56" where the manufacturer/retailer's name often appears.
The protestant claims classification for the article in subheading 9505.10.25, HTSUS, the provision for “Festive, carnival or other entertainment articles...parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof: Christmas ornaments: Other: Other.”
In accordance with New York Ruling Letter (NY) B80804, issued to Department 56 on January 28, 1997, with regard to the classification and marking of the Santa Pocket Watch Ornament, item 84043, you classified the article according to the standard tariff treatment for watches, provided for in Statistical Note 1 to Chapter 91, HTSUS. The movement, case, and battery were classified in subheading 9102.91.4010, 9102.91.4020, and 9102.91.4030, HTSUS, respectively, the provision for "Wrist watches, pocket watches and other watches, including stop watches, other than those of heading 9101: Other: Electrically operated: Having no jewels or only one jewel in the movement." The watch chain was classified in subheading 7117.19.9000, HTSUS, the provision for "Imitation jewelry: Of base metal, whether or not plated with precious metal: Other: Other: Other." The extra battery was classified in subheading 8506.80.0000, HTSUS, the provision for "Primary cells and primary batteries; parts thereof: Other." The copper hook was classified in subheading 7419.91.4030, HTSUS, the provision for "Other articles of copper: Other: Other: Other: Other, Other."
ISSUE:
Whether the Santa Pocket Watch Ornament is classified in heading 9505.10.2500, HTSUS, as a festive article or whether the pocket watch ornament is classified according to the standard treatment for pocket watches imported with their chains.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) taken in their appropriate order provide a framework for classification of merchandise under the HTSUS. Most imported goods are classified by application of GRI 1, that is, 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. The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs.
Heading 9505, HTSUS, provides, among other things, for festive, carnival or other entertainment articles. Articles for Christmas festivities are specifically provided for in subheading 9505.10, HTSUS.
In Midwest of Cannon Falls, Inc. v. United States, Slip Op. 96-19 (Ct. Int’l Trade, 1996), aff’d in part, rev’d in part, 122 F.3d 1423, Appeal Nos. 96-1271, 96-1279 (Fed. Cir. 1997) (hereinafter Midwest), the Court addressed the scope of heading 9505, HTSUS, specifically the class or kind of merchandise termed “festive articles,” and provided new guidelines for classification of such goods in the heading. In general, merchandise is classifiable as a festive article in heading 9505, HTSUS, when the article, as a whole:
1. Is not predominately of precious or semiprecious stones, precious metal or metal clad with precious metal;
2. Functions primarily as a decoration or functional item used in celebration of, and for entertainment on, a holiday; and
3. Is associated with or used on a particular holiday.
Based upon a review of the articles subject to the Midwest decision, Customs is of the opinion that the Court has included within the scope of the class “festive articles,” decorative household articles which are representations of an accepted symbol for a recognized holiday, and utilitarian/functional articles that are three-dimensional representations of an accepted symbol for a recognized holiday. See Customs Bulletin, Volume 32, Numbers 2/3, dated January 21, 1998.
In addition to the criteria listed above, the Court considered the general criteria for classification set forth in United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979 (hereinafter Carborundum). Therefore, with respect to decorative and utilitarian articles related to holidays and symbols not specifically recognized in Midwest or in the Customs Bulletin dated January 21, 1998, Customs will also consider the general criteria set forth in Carborundum to determine whether a particular good belongs to the class or kind “festive articles.” Those criteria include the general physical characteristics of the article, the expectation of the ultimate purchaser, the channels of trade, the environment of sale (accompanying accessories, manner of advertisement and display), the use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use.
With respect to the Santa Pocket Watch Ornament, this article appears to be a utilitarian or functional article because it conforms to the general characteristics of pocket watches designed to be worn on the person. The embossed portion on the case is not a three-dimensional Santa figure and the statement on the box that the article is an ornament does not in and of itself transform a pocket watch into a Christmas ornament or make the principal use of the article a Christmas ornament. As indicated, supra, the Midwest court looked at Carborundum evidence to help identify whether a particular article conformed the uses expected of festive articles. As to physical characteristics, this article is in every respect a pocket watch that is used for telling time. It is not a "toy" pocket watch used to play at the telling of time or a novelty designed to provide a comical or unexpected time of day. Instead, it is real and functional. Physically, the only thing that would suggest Christmas about this functional watch is the superficial embossing of the cover and the marking on the clock face. With respect to the use of the article in the same manner as merchandise which defines the class, this article would apparently be used on the person enabling a colloquy such as 'do you know what time it is?' and whatever the response, the answer would be "no, it's Christmas Time." This personal usage is markedly different from the function of Christmas articles, namely, to decorate the home or environs and provide a contrast to everyday decoration. The class is defined by its use and the instant article does not conform to that use. As to the other Carborundum factors, Customs would not dispute that these articles would be used in connection with the Christmas season and that the person buying the watch would expect to use it during that season. Moreover, Customs does not dispute that these articles would be sold in connection with Christmas promotions and not in fine jewelry stores. However, these articles appear to be more akin to watches bearing a logo of a favorite sports team to be worn while attending games to show team spirit or as a conversation piece. For these reasons, the approach to defining the scope of festive articles employed by the Midwest court does not alter the outcome of the administrative ruling, NY B80404, dated January 28, 1997, provided the protestant on this article.
The protestant asserts that the pocket watch "is essentially the same class or kind of article" such as the importer's "'Village Square Clock Tower' (with working mechanical movement also)" which Customs has classified as a festive article in subheading 9505.10.2500, HTSUS. The decision set forth in HQ 960171, dated April 7, 1998, revokes or modifies a prior ruling on the Village Square Clock Tower which classified the article as a clock. The revocation states that the change was based on the showing that the Village Square Clock Tower was an accessory to the Heritage Village, which, in turn, had been ruled to be a festive article for tariff purposes. As an accessory to a festive article, the Village Square Clock Tower is required to be classified with the rest of the Village under the provisions of Legal Note 3 to Chapter 95. While it is certainly true that both the Village Square Clock Tower and the pocket watch at issue here contain functioning clocks, the similarities end there. The Village Square Clock Tower is a decorative article intended to displayed in the home beneath or around the Christmas tree. The pocket watch is intended to be worn or carried on the person as evidenced by an actual watch chain, and it may be incidentally attached to a Christmas tree as an ornament. Customs would not dispute that the pocket watch could be hung from a Christmas tree. However, the principal use of the article appears to be as a timepiece worn on the person, based on the physical characteristics of the article and its complete functioning as a pocket watch.
This article fails to qualify as an article of heading 9505, HTSUS.
We also note that the General ENs to Chapter 91 exclude "(c) Toy clocks and watches and Christmas tree accessories in the form of clocks or watches, such as those without clock or watch movements (heading 95.03 or 95.05)" Emphasis added. While this EN puts toys in the toy provision where they belong and Christmas tree accessories "without clock or watch movements" in the festive heading where they belong, it also makes clear that working watches with movements remain in Chapter 91. Therefore, the exclusion from Chapter 91 found in the ENs does not describe the instant article or operate to exclude it from Chapter 91.
HOLDING:
The protest should be DENIED.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs 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 of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division