CLA-2 CO:R:C:G 088774 NLP

Mr. Michael Veny
Vice President
Abe M. Knipper, Inc.
60 Sheridan Blvd.
Inwood, NY 11696

RE: Modification of HRL 087920; Headband and ponytail holder ensembles

Dear Mr. Veny:

We have been asked to reconsider Headquarter's Ruling Letter (HRL) 087920, dated December 20, 1990. After reviewing the subject ruling, we have determined that the headband and ponytail holder ensembles are classifiable as sets and, therefore, HRL 087920 should be modified.

FACTS:

HRL 087920 dealt with the classification of four plastic headbands with two rows of short comb teeth on the inside of the bands and six textile and elastic ponytail holders imported in a clear plastic pouch. HRL 087920 held that the headband and ponytail holder ensembles were not sets pursuant to GRI 3(b) because the headbands and ponytails holders were not classifiable under two different headings. Therefore, the headbands and ponytail holders were classified separately in subheading 9615.11.1000, HTSUSA, which provides for combs, hair-slides and the like: of hard rubber or plastics: combs: valued not over $4.50 per gross, and in subheading 9615.19.6010, HTSUSA, which provides for combs, hair-slides and the like: other (than hard rubber or plastics): other (than combs), of textile materials, respectively.

ISSUE:

Whether the headband and ponytail holder ensembles qualify as sets under the HTSUSA.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUSA is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes. GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. The Explanatory Notes to GRI 3(b) state that in order to qualify as a set, goods must consist of at least two different articles prima facie classifiable under two headings, contain products or articles put up together to meet a particular need or carry out a specific activity, and be put up in a manner suitable for sale directly to the user without repacking.

GRI 6 provides that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. GRI 6 thus incorporates GRIs 1 through 5 in classifying goods at the subheading level. Since GRI 6 uses the phrase "for legal purposes" the preceding GRIs are to be applied at the level necessary for the final legal classification of the goods for tariff purposes. Thus, in order to be classifiable as a set, the components must be classifiable in at least two different headings or subheadings.

With respect to the instant merchandise, at the heading level, we do not have "goods put up in sets for retail sale" since the headbands and ponytail holders are both classifiable in Heading 9615, HTSUSA. However, since the instant goods are classifiable under two different subheadings within the same heading, 9615.11 and 9615.19 respectively, and they contain articles put up together to meet a particular need in a manner suitable for the direct sale to the user applicable to this merchandise, they would be considered a set pursuant to GRI 3(b) by virtue of GRI 6.

Since the headband and ponytail holder ensembles are considered sets, we must determine the essential character of the set in accordance with GRI 3(b). Explanatory Note VIII to GRI 3(b) states that:

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 the constituent material in relation to the use of the goods.

In the instant case, the essential character of the headband and ponytail holder sets are not readily apparent. When the component which gives the goods at issue their essential character cannot be determined, classification is ascertained by utilizing GRI 3(c). GRI 3(c) provides the following:

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 subheadings that equally merit consideration are 9615.11, HTSUSA, and 9615.19, HTSUSA. Therefore, pursuant to GRI 3(c), classification of the instant sets is under subheading 9615.19, HTSUSA.

HOLDING:

The headband and ponytail holder ensembles are classifiable as sets in subheading 9615.19.6010, HTSUSA, which provides for combs, hair-slides and the like: other (than hard rubber or plastics): other (than combs), of textile materials. The rate of duty is 11 percent ad valorem.

In order to insure uniformity in Customs' classification of this merchandise and to eliminate uncertainty, we are modifying HRL 087920 to reflect the above classification effective as of the date of this letter. See 19 CFR 177.9(d). However, if after your review of this modification, you disagree with the legal basis for our decision, we invite you to submit any arguments you may have with respect to this matter for our review. Any submission you wish to make should be received within thirty (30) days of the date of this letter.

As indicated above, this notice should be considered a modification of HRL 087920 under 19 CFR 177.9(d)(1). It will not be applied retroactively to HRL 087920 (19 CFR 177.9(d)(2)) and will not, therefore, affect past transactions for the importation of the merchandise under that ruling. However, for purposes of future transactions in merchandise of this type, HRL 087920 will not be valid precedent. We recognize that pending transactions may be adversely affected by this modification, in that current contracts for importations arriving at a port subsequent to this decision will be classified pursuant to it. If such a situation arises, you may, at your discretion, notify this office and apply for relief from the binding effects of this decision as may be warranted by the circumstances.

Sincerely,

John Durant, Director
Commercial Rulings Division