CLA-2 OT:RR:CTF:TCM H044957 JRB
Ms. Lesa R. Hubbard
J.C. Penney Purchasing Corporation
P.O. Box 10001
Dallas, Texas 75301-0001
RE: Revocation of NY I82366; Classification of a “mini” water dispenser
Dear Ms. Hubbard:
This letter is to inform you that U.S. Customs and Border
Protection (CBP) has reconsidered New York Ruling Letter (NY) I82366,
issued to you on July 5, 2002, concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a “mini” water dispenser. The merchandise was classified under heading 8481, HTSUS, which provides for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof.” We have reviewed that ruling and found it to be in error. Therefore, this ruling revokes NY I82366.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification was published on June 9, 2010, in the Customs Bulletin, Volume 44, No. 24. No comments were received in response to this notice.
FACTS:
The merchandise at issue was described as follows in NY I82366:
[A] mini dispenser…comprised of a dispensing base and an inverted water bottle that essentially replicates in miniature a typical bottled water dispenser. You indicate that the dispenser is designed to hold and dispense the eight, eight ounce glasses of water that
are generally recommended for daily drinking. Both the base and bottle are constructed of plastic and are imported shrink-wrapped and packaged together for retail sale. The base incorporates a hand-operated valve with a spout to control the flow of water from the storage bottle.
ISSUE:
Whether the water bottle dispenser is classified in heading 8481, HTSUS, as a valve or heading 3926, HTSUS, as an other article of plastic.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined 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 relevant HTSUS provisions are as follows:
3926: Other articles of plastics and articles of other materials of headings 3901 to 3914:
8481: Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof
The merchandise at issue consists of a plastic water bottle of heading 3926, HTSUS, and a dispensing base with a hand operated valve with a spout, i.e., a tap of heading 8481, HTSUS. When goods are, prima facie, classifiable in two or more headings, they must be classified in accordance with GRI 3, which provides, in relevant part, as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or
to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
* * * *
In this case, headings 3926 and 8481, HTSUS, each refer to only part of the merchandise. Thus, pursuant to GRI 3(a), we must consider the headings equally specific in relation to the goods. Accordingly, the goods are classifiable pursuant to GRI 3(b) because they are prima facie classifiable in more than one heading, are put for the specific activity of dispensing water and are put up for sale without repacking. See EN X to GRI 3(b). Infra.
In classifying the articles pursuant to a GRI 3(b) analysis, the goods are classified as if they consisted of the component that gives them their essential character.
In relevant part, the ENs to GRI 3(b) state:
In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
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… As a general rule, the components of these composite goods are put up in a common packing.
(X) For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which:
(a) consist of at least two different articles which are, prima facie, classifiable in different headings . . .;
(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and
(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).
* * *
There have been several court decisions on "essential character" for purposes of GRI 3(b). These cases have looked to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (citations omitted) (2005), "the essential character of an article is that which is indispensable to the structure, core or condition of the article, i.e., what it is." See also Conair Corporation v. United States, 29 Ct. Int’l Trade, 888, 895 (citations omitted) (2005), (discussing "the concept of ‘essential character’ found in GRI 3(b)").
In this instance, the water bottle performs the necessary role of holding the water. The tap distributes the water but is dependent upon the bottle to provide the water to dispense and will only be used when the consumer dispenses the water. In contrast, the water bottle continuously stores the water. As such, the essential character of the set is provided by the water bottle.
HOLDING:
By application of GRI 3(b), the “mini” water dispenser is classified in
heading 3926, HTSUS. It is provided for in subheading 3926.90.99, HTSUS,
which provides for: “Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other.” The column one, general rate of duty is 5.3% ad valorem.
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 on the world wide web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY I82366, dated July 5, 2002, is hereby revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division