CLA-2 OT:RR:CTF:TCM H058924 JRB
Mr. Todd W. Stumpf
Stonepath Logistics
1930 6th Avenue
Suite 401
Seattle, WA 98134
RE: Revocation of NY R04997; Classification of a water bottle dispenser
Dear Mr. Stumpf:
This letter is to inform you that U.S. Customs and Border
Protection (CBP) has reconsidered New York Ruling Letter (NY) R04997,
issued to you on behalf of your client Pacific Direct, on October 26, 2006, concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a 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 R04997.
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 R04997:
[A] water dispenser … comprised of a plastic water bottle and a
plastic stand. The stand incorporates a hand-operated valve to
control the flow of water from the 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 HTSUSA 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 and stand of heading 3926, HTSUS, and a stand incorporating a hand operated valve (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) as set because they are prima facie classifiable in more than one heading, are used 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.
(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 and provides the greatest bulk. The valve distributes the water but is dependent upon the bottle to provide the water 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 is provided by the water bottle.
HOLDING:
By application of GRI 3(b), the water bottle 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 R04997, dated October 26, 2006, 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