CLA-2 OT: RR: CTF: TCM H244107 APP
Port Director
Los Angeles/Long Beach Seaport
U.S. Customs and Border Protection
301 E. Ocean Blvd., Suite 1400
Long Beach, CA 90802
Attn: Jim Nakamoto, Import Specialist
RE: Protest and Application for Further Review No. 2704-12-103862; Tariff classification of a three-album storage set made from paperboard covered in PCV material
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 2704-12-103862, timely filed on December 19, 2012, on behalf of Target Stores, a division of Target Corporation (“protestant” or “Target”). The AFR concerns U.S. Customs and Border Protection’s (“CBP”) tariff classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of an album set consisting of three media albums with a combined storage capacity of 120 CDs/DVDs and a slipcase designed to hold them. The album set is made of paperboard that has been covered entirely in polyvinyl chloride vinyl material (“PCV”).
FACTS:
From August 11, 2011 to January 2, 2012, the importer of record, Target, filed three entries of “Atlantic Grey Elite Media Binder 120 Capacity (DPCI 012-08-0063)” in heading 4202, HTSUS (2011 and 2012), 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.” On June 22, 2012, August 10, 2012, and November 16, 2012, CBP liquidated the merchandise as entered.
Protestant asserts in the instant AFR that by application of General Rule of Interpretation (“GRI”) 1, the merchandise should be classified in heading 4820, HTSUS (2011 and 2012), which provides for “Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard.” In the alternative, protestant asserts that by application of GRI 3(b), the merchandise should be classified in heading 6307, HTSUS (2011 and 2012), which provides for “Other made up articles, including dress patterns.”
In its AFR application, protestant describes the three-album storage set as follows:
The merchandise imported under cover of the captioned entries (copies enclosed as Attachment 2) includes the Atlantic Grey Elite Media Binder 120 Capacity (DPCI 012-08-0063) (“media binder”). As illustrated in the Target.com advertisement enclosed as Attachment 3, this article is a three album storage set consisting of three media binders with a combined storage capacity of 120 CDs or DVDs, and a slip case designed to hold the three binders. The binders and the slip case are made from paperboard that has been covered entirely in polyvinyl chloride vinyl material. Each binder has an individual storage capacity of 40 discs for a total of 120 discs between all three binders. Each binder contains a total of 10 nonwoven polypropylene “pages[,]” covered in plastic sheeting on one side only. Each page is capable of holding a total of 4 discs: two discs may be stored per side in either a pouch formed by the plastic sheeting on one face of the page, or in a pouch formed by the nonwoven polypropylene fabric on the opposite side of the page (photographs of the binder pages are included as Attachment 4).
(emphasis added).
The photographs of the product reveal that the binders are not looseleaf and do not have rings or clips. The three binders are similar in shape and form to books with numerous pages permanently affixed in the interior of each binder. The slipcase keeps them together and upright on a desk or table. The three binders and the slipcase are sold together as an album set.
ISSUE:
Whether the album set is classifiable as container for storage under heading 4202, HTSUS or as album of paper/paperboard under heading 4820, HTSUS, or as box file, letter tray and similar articles of paper/paperboard under heading 4819, HTSUS, or as other made up textile article under heading 6307, HTSUS.
LAW AND ANALYSIS:
CBP first notes that the matter is protestable under 19 U.S.C. § 1514(a)(2), as a matter on classification. The AFR was timely filed on December 19, 2012, within 180 days of liquidation of the three entries. See 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 Number 2704-12-103862 is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed involves questions of law or fact, which have not been ruled upon by the Commissioner of Customs or his designee or by the courts.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the GRIs. GRI 1 requires that classification be determined first according to the terms of the heading 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.
GRI 2(b) provides that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. GRI 3(a) states that goods should be classified according to the heading which affords the most specific description, unless the multiple headings under consideration refer to only part of the materials or substances contained in goods that are mixed or composite, or to only part of the items in a set put up for retail sale. GRI 3(b) provides that “composite goods consisting of different materials or made up of different components” are to be classified “as if they consisted of the material or component which gives them their essential character,” and where this is not possible, “under the heading which occurs last in numerical order among those which equally merit consideration.”
The HTSUS (2011 and 2012) headings at issue are the following:
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:
4819 Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibers; box files, letter trays and similar articles, of paper or paperboard of a kind used in offices, shops or the like:
4820 Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard:
6307 Other made up articles, including dress patterns:
Additional U.S. Note 2 to Chapter 42, HTSUS, provides that for purposes of classifying an article under subheading 4202.92, “articles of textile fabric impregnated, coated, covered or laminated with plastics (whether compact or cellular) shall be regarded as having an outer surface of textile material or of plastic sheeting, depending upon whether and the extent to which the textile constituent or the plastic constituent makes up the exterior surface of the article.”
Note 1 to Chapter 48, HTSUS, states that for the purposes of this chapter, “except where the context otherwise requires, a reference to ‘paper’ includes references to paperboard (irrespective of thickness or weight per m²).”
Note 1(m) to Section XI, HTSUS, which covers Chapter 63, HTSUS, states that this section does not cover “[p]roducts or articles of chapter 48 (for example, cellulose wadding).”
Note 1 to Chapter 63, HTSUS states that subchapter 1 “applies only to made up articles, of any textile fabric.”
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 Treasury Decision (T.D.) 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The ENs to GRI 3(b), state, in relevant part, that:
(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.
(IX) For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components 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.
Examples of the latter category of goods are:
(1) Ashtrays consisting of a stand incorporating a removable ash bowl.
(2) Household spice racks consisting of a specially designed frame (usually of wood) and an appropriate number of empty spice jars of suitable shape and size.
As a general rule, the components of these composite goods are put up in a common packing.
The EN to heading 42.02, HTS, states, in relevant part, the following:
This heading covers only the articles specifically named therein and similar containers.
These containers may be rigid or with a rigid foundation, or soft and without foundation . . .
Subject to Notes 2 and 3 to this Chapter, the articles covered by the first part of the heading may be of any material. The expression “similar containers” in the first part includes hat boxes, camera accessory cases, cartridge pouches, sheaths for hunting or camping knives, portable tool boxes or cases, specially shaped or internally fitted to contain particular tools with or without their accessories, etc.
The articles covered by the second part of the heading must, however, be only of the materials specified therein or must be wholly or mainly covered with such materials or with paper (the foundation may be of wood, metal, etc.). The term “leather” includes chamois (including combination chamois) leather, patent leather, patent laminated leather and metallised leather (see Note 1 to this Chapter). The expression “similar containers” in this second part includes note cases, writing cases, pen cases, ticket cases, needle cases, key cases, cigar cases, pipe cases, tool and jewellery rolls, shoe cases, brush cases, etc. . . . .
The heading does not cover: . . . .
(c) Articles which, although they may have the character of containers, are not similar to those enumerated in the heading, for example, book covers and reading jackets, file covers, document jackets, blotting pads, photo frames, sweetmeat boxes, tobacco jars, ashtrays, flasks made of ceramics, glass, etc., and which are wholly or mainly covered with leather, sheeting of plastics, etc. Such articles fall in heading 42.05 if made of (or covered with) leather or composition leather, and in other Chapters if made of (or covered with) other materials . . .
The EN to heading 48.19, HTS, states, in relevant part, that:
(B) Box files, letter trays and similar articles of a kind used in offices, shops or the like.
This group covers containers, such as filing cabinets, box files, letter trays, storage boxes and similar articles of a rigid and durable type, and generally of better finish than the packing containers of group (A) . . . . They are used for the filing or storage of documents or stock of various kinds in offices, shops, warehouses, etc.
These articles may have reinforcements or accessories of non paper materials (e.g., hinges, handles, locking devices of metal, wood, plastics or textile material). They may also be provided with frames of metal, plastics, etc., for the insertion of indication cards.
The heading excludes:
(a) Articles of heading 42.02 (travel goods, etc.) . . . .
(d) Albums for samples or for collections (heading 48.20).
(e) Sacks and bags of woven paper yarn, of heading 63.05.
The EN to heading 48.20, HTS, states, in relevant part, that:
This heading covers various articles of stationery, other than correspondence goods of heading 48.17 and the goods referred to in Note 10 to this Chapter. It includes: . . .
3) Binders designed for holding loose sheets, magazines, or the like (e.g., clip binders, spring binders, screw binders, ring binders), and folders, file covers, files (other than box files) and portfolios . . . .
(6) Albums for samples or for collections (e.g., stamp, photograph) . . . .
(8) Book covers (binding covers and dust covers), whether or not printed with characters (title, etc.) or illustrations . . . .
The goods of this heading may be bound with materials other than paper (e.g., leather, plastics or textile material) and have reinforcements or fittings of metal, plastics, etc. . . . .
The EN to heading 63.07, HTS, covers, among other things:
[A]rticles in the length, made up within the meaning of Note 7 to Section XI, provided they are not included in other headings of Section XI.
The EN to heading 63.07, HTS, states that this heading excludes:
(b) Travel goods (suit cases, rucksacks, etc.), shopping bags, toilet cases, etc., and all similar containers of heading 42.02.
Protestant argues that pursuant to the U.S. Court of International Trade’s (“CIT”) opinion in Global Sourcing Group, Inc. v. United States, 33 CIT 389, 611 F. Supp. 2d 1367 (2009), the binders are clearly provided for by name in heading 4820, HTSUS, and specifically in subheading 4820.30.00, HTSUS. Protestant cites New York Ruling Letter (“NY”) N024835, dated Apr. 16, 2008 (three-ring binder composed of paperboard covered in coated paper) and Headquarters Ruling Letter (“HQ”) H085977, dated Aug. 26, 2010 (multiple binders including a binder for CD storage made from a kraft board core and spine covered with nylon and PVC). In the alternative, protestant argues that the binders are classifiable in heading 6307, HTSUS. In support of this proposition, protestant cites NY M86546, dated Sept. 28, 2006 (CD/DVD organizers of paperboard covered with paper). Protestant notes that NY M86546 was issued before CIT’s holding in Global Sourcing Group.
The subject merchandise is a composite good made up of three albums, rather than binders, and a slipcase. The terms “binder” and “album” are not defined in the HTSUS or its legislative history. For guidance on the common meaning of “binder” and “album,” we looked to the dictionary definition. The online Oxford dictionary defines a “binder” as “a hard cover for holding magazines or loose sheets of paper together” such as a “three-ring binder.” The online Oxford dictionary defines an “album” as “[a] blank book for the insertion of photographs, stamps, or pictures.” The Merriam-Webster dictionary defines a “slipcase” as “a protective container for books or magazines that has one open end.” Unlike binders, the subject albums do not have metal rings and clips, and are essentially blank books for storage of the CD/DVD collection. The slipcase holds the three albums together in an upright position. Since the subject merchandise is a composite good, consisting of three albums and a slipcase, the instant album set cannot be classified under GRI 1, and CBP must apply the remaining GRIs.
Heading 4820, HTSUS covers albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard. The ENs to heading 48.20 explain that this heading covers “Albums for samples or for collections (e.g., stamp, photograph)” and that the goods of this heading “may be bound with materials other than paper (e.g., leather, plastics or textile material).” In Global Sourcing Group, 33 CIT at 395-405, 611 F. Supp. 2d at 1373-81, the CIT ruled that binders containing a rigid paperboard core, one or more layers of foam padding, an outer covering of either vinyl or textile fabric, metal binder mechanisms permanently affixed to the spine, and interior sleeves that accommodate a writing pad or other flat items should be classified in heading 4820, HTSUS. The CIT held that the ENs to heading 4820 made it clear that the plastic and vinyl materials do not disqualify the subject merchandise from classification under heading 4820, HTSUS; that classification of a good under heading 4820, HTSUS depended on whether it was comprised of paper or paperboard; and that merchandise specifically provided for in chapter 48, HTSUS was not covered by headings 3926 and 6307, HTSUS.
CBP has previously classified albums of paper or paperboard in heading 4820, HTSUS. In NY N106615, dated June 14, 2010, CBP classified photo albums consisting of paper pages permanently bound between stiff paperboard covers with plastic pockets to hold photos in heading 4820, HTSUS, specifically in subheading 4820.50.00, HTSUS. In NY H85751, dated Dec. 3, 2001, CBP classified a photo album consisting of paper or paperboard pages permanently bound (sewn) between hard covers covered with cloth in heading 4820, HTSUS, specifically in subheading 4820.50.00, HTSUS. Each paper or paperboard page was partially wrapped with a clear plastic film and had four pockets designed to hold a single photograph in each pocket. The albums in the instant matter are similar in that they are made from paperboard covered in another material and are designed to store, hold, and organize items. Each album contains ten nonwoven polypropylene pages covered in plastic sheeting on one side only. Each page is capable of holding four CDs/DVDs. Therefore, the three albums at issue look like photo collection pages with larger sleeves and are covered by heading 4820, HTSUS.
Heading 4819, HTSUS covers box files, letter trays, and similar articles of a rigid and durable type that are used for the filing and storage of documents or stock of various kinds in offices. See EN (B) to heading 48.19. In NY L87012, dated Sept. 2, 2005, CBP classified a magazine holder made of rigid, non-corrugated paperboard in heading 4819, HTSUS. The magazine holder was a “slipcase-like article resembling a box” that was cut diagonally, so that its top and much of one end were open. In NY N055056, dated Apr. 15, 2009, CBP classified a gift card holder of paperboard used to carry a gift card in heading 4819, HTSUS. The instant slipcase resembles the magazine holder and the gift card holder because it is made of paperboard and its top is open. The instant slipcase is essentially a box with an open top that is designed to hold the three albums together and as such it is covered by heading 4819, HTSUS.
The albums and slipcase are not listed eo nomine in heading 4202, HTSUS and are not similar to the exemplars listed therein. See Otter Products, LLC v. United States, 834 F.3d 1369, 1373-74 (Fed. Cir. 2016). The ENs to heading 42.02, HTS exclude articles “which, although they may have the character of containers, are not similar to those enumerated in the heading.” The four characteristics that unite the exemplars of heading 4202, HTSUS are organizing, storing, protecting, and carrying. See Otter Products, 834 F.3d at 1374, 1379-81; Avenues in Leather, Inc. v. United States, 423 F.3d 1326, 1332 (Fed. Cir. 2005). Courts consider these four characteristics collectively. See Otter Products, 834 F.3d at 1378. The instant albums house the pages with the CDs/DVDs to save storage space at home or in the office. The albums can also protect and organize. The albums are not used to carry CDs/DVDs and are not intended or capable of transporting CDs/DVDs from one location to another. The slipcase functions as a box that is used to hold the albums together and upright on a desk or table. The albums and the slipcase lack significant carrying space, which makes them “unsuitable to carry newspapers, books, and other objects that are normally carried in containers and are common to Heading 4202.” Avenues in Leather, 423 F.3d at 1333. Thus, the albums and the slipcase are not containers within the meaning of heading 4202, HTSUS.
When goods are, prima facie, classifiable under two or more headings, classification shall be made pursuant to GRI 3. In the instant case, the respective headings for each of the separate components are equally specific (4820, HTSUS for the albums and 4819, HTSUS for the slipcase) and, therefore, the album set is not classifiable by GRI 3(a). Proceeding to GRI 3(b), the first issue CBP considers is whether the subject merchandise is a composite good.
EN IX for GRI 3(b) defines “composite goods” as made up of separable components that “are adapted one to the other and are mutually complementary” and “together . . .form a whole which would not normally be offered for sale in separate parts.” Examples of composite goods are ashrays consisting of a stand incorpating a removable ash bowl or household spice racks consisting of a specially designed frame and empty spice jars. See EN IX for GRI 3(b). The subject merchandise consists of three albums and a slipcase, which are prima facie classifiable in different headings. The three albums and slipcase are adapted to one another and complement one another. Each of the three albums holds, organizes, and stores CDs/DVDs. The slipcase holds the three albums together and upright on a desk or shelf. The three albums and slipcase are offered for sale together as one product.
Since the subject merchandise is a composite good, the component which gives it the essential character will determine its ultimate classification. Based on EN VIII for GRI 3(b), essential character may 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 factor, which determines essential character, varies among different types of goods. See The Pomeroy Collection, Ltd. v. United States, 893 F. Supp. 2d 1269, 1287-88 (CIT 2013) (holding that the component that gives the article as a whole its ability to serve its overall function imparts the essential character). The component that provides the subject merchandise with its essential character are the three albums made from paperboard covered in PCV material containing nonwoven polypropylene pages covered in plastic sheeting on one side only, which allow to hold, protect, and store CDs/DVDs. The slipcase has a secondary role and only keeps the albums together in an upright position. Additionally, the albums contribute the greatest weight, bulk, and quantity to the entire good. Accordingly, the subject merchandise is classifiable as an album of paper or paperboard because the paperboard albums give the essential character of the composite good.
Lastly, heading 6307, HTSUS is not applicable because by virtue of Note 1(m) to
Section XI, HTSUS, the instant albums with the slipcase are excluded from Chapter 63, HTSUS.
Based on the foregoing, we find that the subject albums with the slipcase meet the terms of heading 4820, HTSUS by application of GRI 3(b) as a composite good based on the essential character of the three albums used to hold CDs/DVDs.
HOLDING:
By application of GRIs 3(b) and 6, the instant composite good consisting of the three media albums with the slipcase is classified in heading 4820, HTSUS, specifically in subheading 4820.50.00, HTSUS, which provides for “Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard: Albums for samples or for collections.” The 2011 and 2012 column one, general rate of duty is free.
Since the reclassification of the merchandise as indicated above would result in the same rate of duty as claimed, you are instructed to allow the protest in full. A copy of this decision should be attached to the Form 19 Notice of Action.
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, through its counsel, no later than sixty (60) days from the date of this letter. Any reliquidation of the entry, in accordance with the decision, must be accomplished prior to mailing of the decision. Sixty days from the date of this letter, the Office of Trade will make this letter available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web 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