OT:RR:CTF:CPMMA H317208 MAB
TARIFF NO: 9403.90.8041; 9903.88.43
Center Director
Machinery Center of Excellence and Expertise
U.S. Customs and Border Protection
6601 NW 25th Street
Miami, FL 33122
Attn: Jose L. Sacerio, Supervisory Import Specialist
Re: Application for Further Review of Protest No. 5201-20-101898; tariff classification of steel shelves and posts used in adjustable shelving units
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 5201-20-101898, timely filed on July 28, 2020, by Sandler, Travis & Rosenberg, P.A., on behalf of Graduate Plastics Inc. (“Protestant”). This AFR concerns U.S. Customs and Border Protection’s (“CBP”) classification of steel shelves and posts used in adjustable shelving units.
FACTS:
The protested merchandise consists of steel shelves (both solid and wire) and posts used to assemble adjustable shelving units. The subject shelves and posts come in various sizes and may be combined with each other, or other parts (e.g., modular wire panels, casters, plastic storage bins, slanted shelving, plastic tray enclosures, and S-hooks), to produce a wide variety of shelving configurations. They are not prepackaged for sale as kits. Instead, each shelf and post model or part number is packaged separately, imported in bulk quantities, and placed into Protestant’s inventory, allowing for individual components to be pulled on an as-needed basis to build shelving units based upon the preferences and needs of its customers.
The protested merchandise consists of one entry that was entered at the Port of Miami (“Port”) on November 29, 2019, and was liquidated on February 7, 2020, under subheading 8302.50.0000, HTSUSA (“Annotated”), as “[b]ase metal mountings, fittings and similar articles suitable for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets or the like; base metal hat racks, hat-pegs, brackets and similar fixtures; castors with mountings of base metal; automatic door closers of base metal; and base metal parts thereof: Hat-racks, hat pegs, brackets and similar fixtures, and parts thereof.” At the time of entry, the protested merchandise was subject to Section 301 duties of 25 percent ad valorem under secondary tariff number 9903.88.03, HTSUS (2019), as the merchandise was classified under subheading 8302.50.00, HTSUS, and had a country of origin of China. See Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 47,974 (September 21, 2018).
The Protestant filed this Protest and AFR on July 28, 2020, asserting that the subject merchandise is properly classified in subheading 9403.90.8041, HTSUSA (2019), as “[o]ther furniture and parts thereof: Parts: Other: Other…Other: Of metal: Other.” On August 17, 2020, the Port informed the Protestant by email that it intended to deny the protest, stating that the subject merchandise was instead classified in subheading 9403.20.0075, HTSUSA (2019), as “[o]ther furniture and parts thereof: Other metal furniture…Other: Counters, lockers, racks, display cases, shelves, partitions and similar fixtures: Boltless or press-fit steel shelving units prepackaged for sale as described in statistical note 2 to this chapter.” On September 17, 2020, the Protestant responded by filing a “Supplemental Response to Protest,” again claiming classification in subheading 9403.90.8041, HTSUSA (2019). If CBP should disagree, the Protestant argues that the merchandise is alternatively classified in subheading 9403.20.0081, HTSUSA (2019), as “[o]ther furniture and parts thereof: Other metal furniture: Other: Counters, lockers, racks, display cases, shelves, partitions and similar fixtures: Other.” Under both classifications, the Protestant further asserts that the merchandise is eligible for an exemption from Section 301 duties under secondary tariff number 9903.88.43, HTSUS.
ISSUE:
Whether the subject steel shelves and posts used in adjustable shelving units are classified in subheading 9403.20.00, HTSUS, as “other metal furniture” or in subheading 9403.90.80, HTSUS, as “parts” of such furniture?
LAW AND ANALYSIS:
The protest was properly filed as a decision on classification under 19 U.S.C. § 1514(a)(2). The protest was timely filed within 180 days of liquidation of the entries. See 19 U.S.C. § 1514(c)(3).
Further Review of Protest Number 5201-20-101898 was properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(a) and (b) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been decided on by CBP or by the Customs courts. Protestant further argues that the decision against which this protest is filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, specifically New York Ruling Letters (“NY”) N309157, dated February 4, 2020; NY N310238, dated March 16, 2020; and NY N269762, dated November 6, 2015.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). 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. If the goods cannot be classified solely based on 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.
The 2019 provisions under consideration are as follows:
9403 Other furniture and parts thereof:
9403.20.00 Other metal furniture
Other:
Counters, lockers, racks, display cases, shelves, partitions
and similar fixtures:
9403.20.0075 Boltless or press-fit steel shelving units prepackaged for
sale as described in statistical note 2 to this chapter…
9403.20.0081 Other…
9403.90 Parts:
Other:
9403.90.80 Other…
Other:
Of metal:
9403.90.8041 Other…
* * * *
Note 2 to chapter 94 states, in pertinent part:
The articles (other than parts) referred to in headings 9401 to 9403 are to be classified in those headings only if they are designed for placing on the floor or ground.
Statistical note 2 to chapter 94 states, in pertinent part:
… the term “boltless or press-fit steel shelving units prepackaged for sale” refers to
steel shelving in which the steel vertical and horizontal supports lock together to form the frame for the shelving unit and are assembled primarily without the use of nuts and bolts or screws. Boltless steel shelving includes rivet shelving, welded frame shelving, slot and tab shelving, and punched rivet (quasi-rivet) shelving but does not include wall-mounted shelving or wire shelving units in which a wire deck and wire horizontal supports are integrated into a single piece.
The Explanatory Notes (“ENs”) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The EN to chapter 94 provides, in pertinent part:
For the purposes of this Chapter, the term “furniture” means:
Any “movable” articles (not included under other more specific headings of the
Nomenclature), which have the essential characteristic that they are constructed for
placing on the floor or ground, and which are used, mainly with a utilitarian purpose, to
equip private dwellings, hotels, theatres, cinemas, offices, churches, schools, cafés,
restaurants, laboratories, hospitals, dentists’ surgeries, etc., or ships, aircraft, railway
coaches, motor vehicles, caravan-trailers or similar means of transport…
***
PARTS
This Chapter only covers parts, whether or not in the rough, of the goods of headings 94.01 to 94.03 and 94.05, when identifiable by their shape or other specific features as parts designed solely or principally for an article of those headings. They are classified in this Chapter when not more specifically covered elsewhere.
* * * *
The HTSUS does not define “furniture” for tariff classification purposes, beyond establishing that it must be designed for placement on the floor or ground. See The Container Store v. United States, 800 F. Supp. 2d 1329, 1335 (CIT 2011). However, the EN to chapter 94 provides that furniture may include “movable furniture” that is used “mainly with a utilitarian purpose.” In view of this, the courts have held that portable articles are classifiable as furniture in heading 9403, HTSUS, so long as their predominant functions are utilitarian, in that they lend themselves to particular uses, rather than decorative or ornamental. See The Pomeroy Collection, Ltd. v. United States, 893 F.Supp.2d 1269, 1283-85 (CIT 2013) (citing Furniture Import Corp., v. United States, 56 Cust. Ct. 125, 133 C.D. 2619 (1966)). Consistent with these principles, CBP has classified various portable structures in heading 9403, HTSUS, as furniture where they perform utilitarian functions by, for example, displaying or securing lights, retail products, or other non-decorative objects. See, e.g., Headquarters Ruling Letter (“HQ”) 964916, dated July 27, 2002 (classifying wooden screens used as partitions in subheading 9403.60.8080, HTSUSA, as other wooden furniture); NY I89667, dated January 9, 2003 (classifying pop-up display structure with light fixtures in subheading 9403.20.0020, HTSUSA, as other metal furniture); NY B80536, dated December 31, 1996, and NY 809309, dated April 17, 1995 (both classifying inflatable trade show display booth and office workstation designed to display products in subheading 9403.70.8030, HTSUSA, as other plastic furniture).
It is undisputed that the subject steel shelves and posts used to build adjustable shelving units are properly classified in heading 9403, HTSUS, which applies to “other” furniture as well as parts of such furniture. Instead, the classification dispute is at the six-digit level and whether the subject merchandise is “other metal furniture” or parts of such furniture.
In the instant case, the protested merchandise consists of various sizes of steel shelves (both solid and wire) and posts used to assemble adjustable steel shelving units. They are not prepackaged for sale in the form of complete “ready-to-assemble” steel shelving kits. Instead, each steel shelf and post model or part number is packaged separately, imported in bulk quantities, and placed into Protestant’s inventory, allowing for individual component to be pulled on an as-needed basis and combined with each other and/or other parts (e.g., modular wire panels, casters, plastic storage bins, slanted shelving, plastic tray enclosures, and S-hooks) to build shelving units that fulfill a customer’s specifications. When combined in this manner post-importation, the steel shelves and posts form shelving units that are designed for placement on the floor or ground, movable, and used for a utilitarian purpose of holding or organizing objects; thus, when combined in this manner, the subject merchandise would be considered other metal furniture. On their own, however, the steel shelves and posts are not designed for placement on the floor or ground and do not provide utilitarian value in and of themselves. Consequently, the subject steel shelves and posts cannot be described as other metal furniture of subheading 9403.20, HTSUS.
The term “part” is not defined either in the HTSUS or in the ENs. In the absence of a statutory definition, the courts have fashioned two distinct but reconcilable tests for determining whether a particular item qualifies as a “part” for tariff classification purposes. See Bauerhin Techs. Ltd. Pshp. v. United States, 110 F.3d 774, 779 (Fed. Cir. 1997) (hereinafter, “Bauerhin”). Under the test initially promulgated in United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322, 324 (1933) (hereinafter, “Willoughby”), an imported item qualifies as a part only if it can be described as an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 779. Pursuant to the test set forth in United States v. Pompeo, 43 C.C.P.A. 9, 14 (1955) (hereinafter, “Pompeo”), a good is a “part” if it is “dedicated solely for use” with a particular article and, “when applied to that use…meets the Willoughby test.” Id. (citing Pompeo, 43 C.C.P.A. at 14); Ludvig Svensson, Inc. v. United States, 63 F. Supp. 2d 1171, 1178 (CIT 1999) (holding that a purported part must satisfy both the Willoughby and Pompeo tests). Consistent with the Pompeo test, the EN to chapter 94 provides that parts of heading 9403, HTSUS, must be “identifiable by their shape or other specific features as parts designed solely or principally for an article of [that] heading.”
Here, the individual steel shelves and posts are in shapes and have features that restrict their use to the assembly of adjustable shelving units when combined with each other and/or other parts (e.g., modular wire panels, casters, plastic storage bins, slanted shelving, plastic tray enclosures, and S-hooks). Left unconnected to each other and other parts, these shelves and posts are completely devoid of utilitarian value. Once joined together to form a complete shelving unit, however, they cannot be removed without compromising a shelving unit’s integrity and/or utility. Specifically, removal of a shelf would eliminate a shelving unit’s capacity to hold objects, while removal of a post would result in its collapse. Therefore, under both the Willoughby test and the Pompeo test, the individual steel shelves and posts are parts of a complete shelving unit which, as noted above, is furniture within the meaning of heading 9403, HTSUS.
In view of the foregoing, the subject steel shelves and posts are classified in subheading 9403.90, HTSUS, as parts of other furniture, and specifically in subheading 9403.90.8041, HTSUSA (2019), which provides for “[o]ther furniture and parts thereof: Parts: Other: Other…Other: Of metal: Other.” This finding is consistent with prior CBP rulings. See HQ H265042, dated July 19, 2016 (“Gorilla Pipes” used to form structural frames of display systems, which were entered as individual articles and not kits, classified as parts in subheading 9403.90.8041, HTSUSA); NY N309157, dated February 4, 2020 (vertical upright posts used as part of a complete rack system, when imported separately, classified in subheading 9403.90.8041, HTSUSA); NY N310238, dated March 16, 2020 (heavy duty drawer slide designed for installation on a floor standing industrial automotive steel storage rack, classified as a dedicated component part in subheading 9403.90.8041, HTSUSA); NY N306573, dated October 25, 2019 (ribbed steel wire mesh decking classified as part of pallet shelf rack systems in subheading 9403.90.8041, HTSUSA); and NY N269762, dated November 6, 2015 (a floor display base classified as a part of a display stand or rack in subheading 9403.90.8041, HTSUSA).
HOLDING:
By application of GRIs 1 and 6, the subject steel shelves and posts used in adjustable shelving units are classified in heading 9403, HTSUS, and specifically in subheading 9403.90.8041, HTSUSA (2019), which provides for “[o]ther furniture and parts thereof: Parts: Other: Other…Other: Of metal: Other.” The column one, general rate of duty at the time of entry was free.
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 at https://hts.usitc.gov/current.
Pursuant to U.S. note 20 to subchapter III, chapter 99, HTSUS, products of China classified in subheading 9403.90.8041, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty under 9903.88.03, HTSUS. However, the subject steel shelves and posts used in adjustable shelving units are accurately described under U.S. note 20(vv)(173) to chapter 99, subchapter III, HTSUS, which provides a description for “[p]arts of counters, racks, display cases, and similar fixtures of base metal, other than welded wire rack decking (described in statistical reporting number 9403.90.8041).” Thus, the merchandise meets the terms of the exclusion language and therefore qualifies for the claimed exclusion under secondary tariff number 9903.88.43, HTSUS.
You are instructed to GRANT the protest in full.
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 of Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on the Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division