OT:RR:CTF:CPMM H250663 KSG
Erol Fikri
George Patton Associates, Inc.
55 Broad Common Road
Bristol RI 02809
RE: Tariff classification of a display case used to display items in retail stores
Dear Mr. Fikri:
This ruling is in reference to your request for a binding ruling dated August 12, 2013, on behalf of George Patton Associates, Inc., regarding the classification of glass and MDF display cases used to display items in retail stores under the Harmonized Tariff Schedule of the United States (HTSUS). We regret the delay in responding to your request.
FACTS:
The product involved in this case is a tempered glass display case with glass shelfs. The base and top are made of medium density fibreboard (MDF). The body of the case- including the shelves, is made of glass. The case is illuminated by two 20-watt halogen lights imbedded in the top and has a locking door. The dimensions of the case are 13” width x 29 height x 13” depth. The viewable area is 11 ½” width x 10 5/8” depth. The shelf surface area is 11 ½” width x 10 5/8” depth. The base height is 1 1/8” in height. The canopy height is 3 1/8” in height. The distance between the shelves is 8 ½”, 8 ½”, 8”. The glass thickness is 3/16” (5 mm). The weight of the product is 40 lbs. The glass weighs twice as much as the MDF. The value of the glass is more than 50% of the product. The value of the MDF is approximately 44% of the value of the product.
The display cases are primarily sold to retail stores (over 80 percent of sales) and are designed to sit on a countertop. The secondary purpose of the display cases is to display objects in museums and schools.
ISSUE:
Whether the display case used to display items in retail stores is classified as wood marquetry, inlaid wood, casket, cases for jewelry or cutlery or similar article, of wood of heading 4420, as a glass article of a kind used for table, kitchen, toilet, office, indoor decoration or similar purpose of heading 7013 or as an other article of glass of heading 7020.
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.
The goods at issue cannot be classified solely on the basis of a single provision in the HTSUS that completely describes the product, in accordance with GRI 1 and is not an incomplete or unfinished good/ unassembled or dis-assembled good, so we proceed to GRI 3.
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:
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.
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 the consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, constitute the official interpretation of the Harmonized System at the international level. While neither legally binding not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (August 23, 1989).
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.” Essential character is that which is indispensable to the structure, core or condition of the article, i.e., what it is. The Home Depot U.S.A., Inc. v. United States, 427 F. Supp. 2d 1278, (Ct. Int’l Trade 2006) aff’d 491 F.3d 1334 (Fed. Cir. 2007).
The HTSUS headings under consideration are the following:
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:
7013 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018):
7020 Other articles of glass:
Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that, in the absence of special language or context which otherwise requires, such use “is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.”
In GRK Can., Ltd. v. United States, 180 F. Supp. 3d 1260 (Ct. Int’l Trade 2016), the Court stated that “In the typical provision that is controlled by use, the word “use” or “used” appears in the language of the subheading. In those provisions, the heading describes articles by the manner in which they are used as opposed to by name…. where a tariff term does not include the word “use” it may nonetheless be controlled by use when the term itself (including the Section and Chapter Notes) or the Explanatory Notes indicates that, as a matter of law, the provision is controlled by use.”
In Dependable Packaging Solutions, Inc. v. United States, Slip Op. 2013-23 (Ct. Int’l Trade 2013), aff’d 757 F.3d 1374 (Fed. Cir. 2014), the Court applied the factors set forth in United States v. Carborundum Co., 536 F.2d 373 (C.C.P.A. 1976) (ruling on a provision in the Tariff Schedule of the United States (TSUS), the predecessor to the HTSUS), as applicable to determine whether the principal use of a vase was for placement on a table, kitchen, toilet, office, indoor decoration or similar purposes rather than as packing containers of glass. Factors considered in making the determination of principal use included: use in the same manner as merchandise which defines the class; the general physical characteristics of the merchandise; the economic practicality of so using the import; the expectation of the ultimate purchasers; the channels of trade in which the merchandise moves; the environment of the sale, such as accompanying accessories and the manner in which the merchandise is advertised and displayed; and the recognition in the trade of the use. The actual use of the goods is evidence of the principal use but is still only one of a number of factors. See ENI Tech. Inc. v. United States, 641 F. Supp. 2d 1337 (Ct. Int’l Trade 2009), and Minnetonka Brands, Inc. v. United States, 110 F. Supp. 2d 1020 (Ct. Int’l Trade 2000).
In Headquarters Ruling Letter (HQ) 089164, dated July 23,1992, a glass and brass display case 21 “ x 14” designed to be placed on furniture and display collectibles in a home was classified in subheading 7013.99.90, HTSUS, as glassware intended for placement on a table or indoor decoration in a home. Based on the size and retail use intended for the article involved in this case, HQ 089164 is distinguishable from this case.
The importer contends that the imported article in this case is classified in heading 4420 because it has a top and base made of MDF.
Since there is no heading that provides a specific description that clearly identifies the display cases, we proceed to GRI 3(b) to determine what imparts the essential character to the display case intended for retail sales. This article is a composite good consisting of MDF and tempered glass. Comparing the weight and value of the glass components and MDF, the glass is of greater weight and value. Further, the viewable area of the product, which would be tempered glass, predominates over the area of the MDF base and top (11 ½” width x 10 5/8” depth for a product that is 13” width x 29” height x 13” depth). The purpose of the case is for the retail display of objects, which requires transparent material like tempered glass. Hence, weighing all the factors discussed, we find that the essential character of this article is imparted by its glass body and shelves. Accordingly, the display case would be classified in Chapter 70, HTSUS.
Heading 7013 is a principal use provision. See Headquarters Ruling Letter (HQ) 961409, dated October 22, 1998. Articles in heading 7013 are “used for table, kitchen, toilet, office, indoor decoration or similar purposes….” (emphasis added). Glass display cases designed to display and protect collectibles in a home are classified in heading 7013, HTSUS. See HQ 089164, and HQ 961409. However, the display cases in this case are intended for use principally in retail stores to display items for sale. The size of the display cases, their design and the locking door all indicate that these display cases are principally intended for use in retail stores and not a home or office. Further, 80 percent of sales are to retail stores. In applying the Carborundum factors to the instant case, we find that the articles in question are designed for use in a retail store. Therefore, the display cases in the instant case are not classified in heading 7013, HTSUS.
Since the glass display cases are not classified in heading 7013, they would be classified in heading 7020, HTSUS, as an other article of glass. In accordance with GRI 6, the glass display is classified in subheading 7020.00.60, HTSUS, which provides for “Other articles of glass: Other.”
HOLDING:
By application of GRI’s 3(b) and 6, the display case is classified in heading 7020, HTSUS, and specifically in subheading 7020.00.60, HTSUS. The column one, general rate of duty is 5 percent ad valorum.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided for at www.usitc.gov.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division