CLA-2 CO:R:C:M 952403 KCC

Asst. District Director
U.S. Customs Service
Interstate 87
Champlain, New York 12919

RE: Protest No. 0712-92-100808; indoor light garden systems; 8432.80.00; agricultural or horticultural machinery; 085942; EN 84.32; metal shelf; plastic tray; electric lighting fixture; NY 827323; furniture; Note 2, Chapter 94; General EN (A) and (B), Chapter 94; designed to be placed on floor; utilitarian purpose; 9817.00.50

Dear Sir:

This is in response to the Application for Further Review of Protest No. 0712-92-100808, dated July 14, 1992, which pertains to the tariff classification of indoor light garden systems imported from Canada under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The articles under consideration are Floralight's indoor light garden systems (garden systems), No. TM48S which is a one tiered system, No. 2T48S and 2T24S which are two tiered systems, and No. 3T48S which is a three tiered system. The 2T and 3T models are floor standing systems, whereas the TM model is a table top system. Depending on the number of tiers, each of the garden systems will consist of one or more of the following items:

1) electric lighting fixture, 2) metal frame 3) metal shelf, and 4) plastic tray.

The garden systems which are designed for both hobbyists and professionals allow for plant growth and care when outdoor conditions are not desirable or appropriate.

Upon importation, the 3T48S, 2T48S and 2T24S were liquidated under subheading 9403.20.00, HTSUS, which provides for "Other furniture and parts thereof...Other metal furniture." The TM48S was liquidated under subheading 7326.90.90, HTSUS, which provides for "Other articles of iron or steel...Other...Other... Other." The above classifications were based on New York Ruling (NY) 827323 dated February 26, 1988, issued to the protestant, Floralight Gardens Canada Inc., which classified the floor standing systems under subheading 9403.20.00, HTSUS, and the shelf or table top systems under subheading 7326.90.90, HTSUS.

On the invoice and entry summary, the protestant classified all of the garden systems under subheading 9403.20.00, HTSUS. However, the protestant now contends that the garden systems are properly classified under subheading 8432.80.00, HTSUS, which provides for "Agricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sports ground rollers; parts thereof...Other machinery." The protestant states that the garden systems are machinery as defined in Webster Ninth New Collegiate Dictionary which defines machinery as:

Mechanically, electrically or electronically operational device for performing a task.

The protestant states that the "actual use" of the garden systems should be considered, as they are designed and dedicated to a specific agricultural or horticultural use, and not for any other purpose.

The protestant cites Headquarters Ruling Letter (HRL) 085942 dated January 18, 1991, as evidence that the garden systems should be classified as agricultural or horticultural machinery. HRL 085942 held that identical garden systems were classified as agricultural and horticultural implements not specially provided for in item 666.00, Tariff Schedules of the United States (TSUS) (the precursor tariff provision to heading 8432 to 8438, HTSUS). If classification under subheading 8432.80.00, HTSUS, is denied, the protestant requests that consideration be given to the tariff classification of all the garden systems and the plastic trays under subheading 9403.20.00, HTSUS.

ISSUE:

What is the proper tariff classification of the indoor light garden systems under the HTSUS?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, 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...."

The protestant contends that the garden systems are properly classified under subheading 8432.80.00, HTSUS, as agricultural or horticultural machinery. In support of this contention, the protestant cites HRL 085942 as evidence that the garden systems should be classified under that tariff provision. In HRL 085942, we held that the protestant's identical indoor garden systems were classified in item 666.00, TSUS, which provided for "...agricultural and horticultural implements not specially provided for...."

Congress has indicated that earlier tariff decisions must not be disregarded in applying the HTSUS. The conference report to the Omnibus Trade Bill of 1988, states that "on a case-by- case basis prior decisions should be considered instructive in interpreting the HTS[US], particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTS[US]." H. Rep. No. 100-576, 100th Cong., 2D Sess. 548, 550 (1988). In this instance, we do not find HRL 085942 to be either instructive or applicable. There is a significant change in the text of the nomenclature from item 666.00, TSUS, to subheading 8432.30.00, HTSUS, which requires a different interpretation. The term "agricultural or horticultural implements not specially provided for" is not included in headings 8432 to 8438, which are the successor HTSUS tariff provisions to item 666.00, TSUS. Heading 8432, HTSUS, describes specific types of machinery to be classified therein. Therefore, we do not find HRL 085942 instructive in this case.

Explanatory Note (EN) 84.32 of the Harmonized Commodity Description and Coding System (HCDCS) states that heading 8432, HTSUS, "covers machines, whatever their mode of traction, used in place of hand tools, for one or more of the following types of agricultural, horticultural or forestry work, viz:

(I) Preparing the soil for cultivation (clearing, breaking, tilling, ploughing, loosening, etc.). (II) Spreading or distributing fertilisers, including manure, or other products to improve the soil. (III) Planting or sowing. (IV) The working or maintenance of soil during the growing period (hoeing, weeding, cleaning, etc.)."

EN 84.32 continues by stating that "[t]he machines of this heading may be hauled by an animal or by a vehicle (e.g., a tractor), or may be mounted on a vehicle (e.g., on a tractor or a horse-drawn chassis)." The machines contemplated by heading 8432, HTSUS, include ploughs, harrows, scarifiers, cultivators, weeders, hoes, seeders, planters, transplanters, fertiliser distributors, rollers, thinning-out machines, etc. HCDCS, Vol. 3, pgs. 1208-1210. The Explanatory Notes, although not dispositive, are to be looked to for guidance in interpreting the HTSUS. 54 Fed. Reg. 35127, 35128 (August 23, 1989). The garden systems are not the type of article contemplated by heading 8432, HTSUS. The garden systems are not machines used to prepare, plant and/or maintain soil in the agriculture, horticulture or forestry industries. Furthermore, it is our position that the garden system is not a machine. The article is not "operational" as required by the Webster definition. Therefore, classification of the garden systems must be found elsewhere.

As classification under subheading 8432.80.00, HTSUS, has been found inapplicable, the protestant requests that all of the garden systems be classified under subheading 9403.20.00, HTSUS, as other metal furniture. General EN (A) and (B) to Chapter 94 states that for the purposes of this Chapter, the term "furniture" means:

(A) 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,...

(B) The following:

(i) Cupboards, bookcases, other shelved furniture and unit furniture, designed to be hung, to be fixed to the wall or to stand one on the other or side by side, for holding various objects or articles (books, crockery, kitchen utensils, glassware, linen, medicaments, toilet articles, radio or television receivers, ornaments, etc.) and separately presented elements of unit furniture....

HCDCS, Vol. 4, p. 1574.

In this case the two and three tiered garden systems (3T48S, 2T48S and 2T24S) are movable articles which are constructed to be placed on the floor and are used for a utilitarian purpose. The garden systems allow the garden hobbyist or professional to grow, maintain and care for plants indoors when the outdoor conditions are undesirable or appropriate for proper growth. Therefore, the 3T48S, 2T48S and 2T24S garden systems are properly classified under subheading 9403.20.00, HTSUS.

However, the TM48S cannot be classified as furniture under subheading 9403.20.00, HTSUS. To be classified as furniture under subheading 9403.20.00, HTSUS, articles must be designed to be placed on the floor or ground. See, Note 2 to Chapter 94, HTSUS. The TM48S garden system is not designed to be placed on the floor or ground but on a table top. Therefore, the TM48S cannot be classified under subheading 9403.20.00, HTSUS. The TM48S garden system is properly classified under subheading 7326.90.90, which provides for "Other articles of iron or steel...Other...Other...Other."

Some articles are entitled to duty free treatment under subheading 9817.00.50, HTSUS,if the articles are used for agricultural or horticultural purposes. Subheading 9817.00.50, HTSUS, describes "Machinery, equipment and implements to be used for agricultural or horticultural purposes..." To fall within this special classification a three part test must be met.

First, the article must not be among the long list of exclusions to subheading 9817.00.50 and 9817.00.60, HTSUS, under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. Secondly, the terms of the subheading must be met in accordance with GRI 1. Subheading 9817.00.50, HTSUS, describes "Machinery, equipment and implements to be used for agricultural or horticultural purposes..." This determination focuses upon the specific agricultural or horticultural pursuit in question and what machine, equipment or implement performs this pursuit. Thirdly, the merchandise must satisfy the conditions of section 10.131 to 10.139, Customs Regulations (19 CFR 10.131-10.139).

The garden systems are classified under subheading 7326.90.90 and 9403.20.00, HTSUS. Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2(ij) lists the exclusions to subheading 9817.00.50 from Chapter 73, HTSUS. Subheading 7326.90.90, HTSUS, is excluded from Subchapter XVII, U.S. Note 2(ij). Therefore, the TM48S garden systems is not eligible for duty free treatment under subheading 9817.00.50, HTSUS. However, subheading 9403.20.00, HTSUS is not excluded from Subchapter XVII, U.S. Note 2. Therefore, the 3T48S, 2T48S and 2T24S garden systems meet the first prerequisite.

Secondly, the 3T48S, 2T48S and 2T24S garden systems must be included within the terms of subheading 9817.00.50, HTSUS. They must be "machinery," "equipment" or "implements" used for an "agricultural or horticultural purpose." In this case, the horticultural pursuit is the growth and care of plants indoors when outdoor conditions are not desirable or appropriate. The 3T48S, 2T48S and 2T24S garden systems are the actual equipment or implements that provide the structure and necessary conditions which allow for the growth of the indoor plants. Therefore, the 3T48S, 2T48S and 2T24S garden systems meet the second prerequisite.

However, regarding the protest under consideration, the third prerequisite has not been met. In order to qualify for duty free treatment under this provision, the protestant must follow the regulations set forth in 19 CFR 10.131-10.139. 19 CFR 10.131-10.139 are the applicable regulations for the entry of merchandise whose rate of duty is dependent upon actual use. The protestant did not satisfy the condition found in 19 CFR 10.131- 10.139 in that they did not declare intent as required in 19 CFR 10.134. Thus, the 3T48S, 2T48S and 2T24S garden systems are not eligible for duty free treatment under subheading 9817.00.50, HTSUS.

HOLDING:

The TM48S indoor light garden system is properly classified under subheading 7326.90.90, HTSUS, which provides for "Other articles of iron or steel...Other...Other...Other."

The indoor light garden systems, 3T48S, 2T48S and 2T24S, are properly classified under subheading 9403.20.00, HTSUS, which provides for "Other furniture and pats thereof...Other metal furniture."

This protest should be denied. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division