CLA-2 OT:RR:CTF:TCM H196655 EGJ
Jennifer Crutcher
Art 101 USA, Ltd.
5827 Del Roy Drive
Dallas, TX 75230
RE: Classification of the Drawing & Sketching 101 Kit and the 215-Piece Deluxe
Art 101 Kit
Dear Ms. Crutcher:
This is in response to your request of June 8, 2011, for a binding ruling on the tariff classification of the Drawing & Sketching 101 Kit, Item No. 53009 (the drawing kit) and the 215-Piece Deluxe Art 101 Kit, Item No. 53215 (the deluxe kit) under the Harmonized Tariff Schedule of the United States (HTSUS). You also submitted a sample of the kits to our office.
FACTS:
The drawing kit contains six graphite pencils, six color pencils, two erasers, two blending tortillions, a charcoal pencil, a pencil sharpener, a paperboard colorwheel, a small wooden manikin, a drawing pad with twelve sheets of paper and two paper learning guides. The tortillions are comprised of paper and are tightly wrapped into a pencil shape. They are used for smudging pencil lines. The wooden manikin stands roughly six inches tall and is shaped like a human being. The consumer can move the manikin’s head, arms and legs into different positions to create different poses.
The drawing kit’s retail packaging is a wooden box. It measures approximately 10 inches x 7.5 inches x 2 inches. It does not have any handles. Inside the box, two flimsy plastic trays are stacked on top of each other. These trays are fitted to hold the art supplies. These trays must be removed from the box in order to access all of the art supplies.
The box comprises the majority of the drawing kit’s bulk, weight and value. The remaining art supplies are listed in descending order of value per unit as follows: the manikin, the learning guides, the color wheel, the tortillions, the drawing pad, the pencils (all of the pencils have the same unit value), the pencil sharpener and the eraser. The most numerous art supplies are the color pencils and the graphite pencils. The total value of the six color pencils and the six graphite pencils is greater than the total value of any other item in the kit, other than the box. A picture of the drawing kit is provided below:
The deluxe kit includes 90 crayons, 32 fine line markers, 30 color pencils, 14 acrylic paint tubes, 20 watercolor cakes, 12 oil pastels, six paint brushes, four sketch pencils, one pencil sharpener, one eraser, one sponge, one palette, one sanding block and one water bottle. The total value is the same for the crayons, the acrylic paint tubes, the watercolor cakes and the oil pastels. These are the most expensive art supplies in the deluxe kit.
The deluxe kit is packaged for retail sale in a wooden carrying case. When closed, the carrying case measures approximately 10.5 inches x 17.5 inches x 4 inches. The wooden carrying case includes two wooden shelves on metal hinges. Four plastic trays are glued into the carrying case: one on each shelf and one on each side of the carrying case. These trays are specially fitted to hold the art items within the deluxe kit. When the carrying case is opened, the two shelves can swing out and above the carrying case to give the consumer access to two levels of art supplies, as shown below:
ISSUE:
What is the tariff classification of the drawing kit and the deluxe kit?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). 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. 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 2 through 6 may then be applied in order.
GRI 3 provides that:
When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected 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.
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The HTSUS provisions at issue are as follows:
4420 Wood marquetry and inlaid wood; caskets and cases for jewelry or cutlery and similar articles, of wood; statuettes and other ornaments, of wood; wooden articles of furniture not falling within chapter 94:
4420.90 Other …
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8214 Other articles of cutlery (for example, hair clippers, butchers' or kitchen cleavers, chopping or mincing knives, paper knives); manicure or pedicure sets and instruments (including nail files); base metal parts thereof:
8214.10 Paper knives, letter openers, erasing knives, pencil sharpeners (nonmechanical) and blades and other parts thereof …
* * *
9609 Pencils (other than those pencils of heading 9608), crayons, pencil leads, pastels, drawing charcoals, writing or drawing chalks and tailors' chalks:
9609.10 Pencils and crayons, with leads encased in a rigid sheath …
* * *
9609.90 Other …
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In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
ENs to GRI 3(b) provides, in pertinent part, that:
(VIII) 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..
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(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. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
(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).
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All art kits are unique, and so we classify art kits on a case-by-case basis. Under GRI 1, we must look to the terms of headings and any relevant section or chapter notes in order to classify the drawing kit. The articles within the kit are classified under separate headings. For example, pencils are provided for in heading 9609, HTSUS,
and non-mechanical pencil sharpeners are provided for in heading 8214, HTSUS. Since no single heading provides for all of the articles in the drawing kit, we must proceed to GRI 2. GRI 2 provides for unfinished articles as well as mixtures and combinations. None of these terms describe the drawing kit, so we must proceed to GRI 3.
GRI 3(a) states that when merchandise is classifiable under more than one heading, the merchandise should be classified in the most specific heading. However, GRI 3(a) further states that “when two or more headings each refer 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.” Because each heading for the drawing kit is equally specific, we must proceed to GRI 3(b).
GRI 3(b) states, in relevant part, that goods put up in sets for retail sale shall be classified as if consisting of the material or component which gives them their essential character, insofar as this criterion is applicable. EN(X) to GRI 3(b) states that for purposes of Rule 3(b) the term "goods put up in sets for retail sale” means 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).
The drawing kit satisfies the aforementioned criteria for a retail set. The kit consists of several components which are prima facie classifiable under different HTSUS headings. Moreover, all of the articles serve to meet the specific activity of learning to draw. The drawing kit’s retail packaging consists of a wooden box. It is ready for sale directly to its ultimate consumers without repackaging. Under GRI 3(b), the drawing kit is a retail set and shall be classified according to the component which gives the kit its essential character. See Estee Lauder, Inc. v. United States, 46 Cust. B. & Dec. 4, 13 – 28 (Ct. Int’l Trade 2012). EN (VIII) to GRI 3(b) states that “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.”
There have been several court decisions on "essential character" for purposes of classification under GRI 3(b). See, Conair Corp. v. United States, 29 C.I.T. 888 (2005); Structural Industries v. United States, 360 F. Supp. 2d 1330, 1337-1338 (Ct. Int’l Trade 2005); and Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278, 1295-1356 (Ct. Int’l Trade 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007). "[E]ssential character is that which is indispensable to the structure, core or condition of the article, i.e., what it is." Home Depot USA, Inc. v. United States, 427 F. Supp. 2d at 1293 quoting A.N. Deringer, Inc. v. United States, 66 Cust. Ct. 378, 383 (1971). In particular in Home Depot USA, Inc. v. United States, the court stated "[a]n essential character inquiry requires a fact intensive analysis." 427 F. Supp. 2d 1278, 1284 (Ct. Int’l Trade 2006).
The pencils and the wooden box are the most expensive items in the drawing kit. The pencils are essential to practicing and learning how to draw. They are also the most numerous art supplies in the drawing kit. The wooden box measures 10 inches x 7.5 inches x 2 inches. While the wooden box comprises the bulk of the drawing kit’s weight and value per unit, the wooden box does not relate to the activity of learning to draw. The wooden box merely stores and organizes the art supplies when they are not in use. In addition, the value of the wooden box is within one dollar of the total value of the art supplies. Based upon these factors, the wooden box does not impart the essential character to the drawing kit. As such, the drawing kit’s essential character is imparted by the pencils, which are classified under heading 9609, HTSUS.
Similarly, the deluxe kit satisfies the criteria for a GRI 3(b) retail set. The deluxe kit consists of art supplies which are packaged together for retail sale. The art supplies and the wooden box are classifiable under different headings. The purpose of the deluxe art kit is to provide the ultimate consumer with the materials to learn how to create drawings and paintings using different mediums.
The crayons, the acrylic paint tubes, the watercolor cakes and the oil pastels all have the same total value. These are the most expensive art supplies in the deluxe kit. The crayons are also the most numerous art supplies. When closed, the wooden box measures approximately 10.5 inches x 17.5 inches x 4 inches. While the wooden box is the single largest and most expensive component of the deluxe kit, it is valued at less than the total value of the art supplies. Moreover, the wooden box does not contribute to the activity of making art. As such, the crayons impart the essential character to the deluxe kit. The deluxe kits shall be classified under heading 9609, HTSUS, which provides for crayons.
Please note that the pencils contained in each kit may fall within the scope of an antidumping order concerning cased pencils from the People's Republic of China. See 59 F.R. 66909, December 28, 1994. We note that the International Trade Administration is not necessarily bound by a country of origin or classification determination issued by CBP, with regard to the scope of antidumping orders or countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection. You can contact them at http://www.trade.gov/ia/ (click on “Contact Us”). For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using ACE, the system of record for AD/CVD messages, or the AD/CVD Search tool at http://addcvd.cbp.gov/index.asp?ac=home.
HOLDING:
By application of GRI 3(b), the drawing kit is classified by its pencils under heading 9609, HTSUS. It is specifically provided for under subheading 9609.10.00, HTSUS, as “Pencils (other than those pencils of heading 9608), crayons, pencil leads, pastels, drawing charcoals, writing or drawing chalks and tailors' chalks: Pencils and crayons, with leads encased in a rigid sheath …” The 2012 column one, general rate of duty is 14 cents per gross plus 4.3 percent ad valorem on the entire set.
By application of GRI 3(b), the deluxe kit is classified by its crayons under heading 9609, HTSUS. It is specifically provided for under subheading 9609.90.80, HTSUS, as “Pencils (other than those pencils of heading 9608), crayons, pencil leads, pastels, drawing charcoals, writing or drawing chalks and tailors' chalks: Pencils Other: Other …” The 2012 column one, general rate of duty is 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 on World Wide Web at http://www.usitc.gov/tata/hts/.
A copy of this ruling letter should be attached to the entry documents filed
at the time the goods are entered. If the documents have been filed without a copy, this
ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch