CLA-2-94:OT:RR:NC:N4:433
Erica Fritz
Compliance Manager
GHY USA Inc.
572 S 5th Street
Pembina, ND 58271
RE: The tariff classification of a modular seating system from Canada.
Dear Ms. Fritz:
In your letter dated September 15, 2015, on behalf of OI Furniture Inc., you requested a tariff classification ruling. Descriptive literature, illustrative literature and photos were provided.
The merchandise concerned is identified as the “Cellulartm.” The Cellulartm is a modular seating system made up of eight standard parts that when assembled together create multiple seating configurations. You indicate that the eight standard parts that make up a Cellulartm configuration could include: (1) Base, (2) Seat Cushion, (3) Back Cushion, (4) Arm Cushion, (5) Arm Nesting Table, (6) 10-Inch Base Table, (7) 20-Inch Base Table, and (8) 30-Inch Base Table.
Company provided information indicates the following: (1) the Base is made of 100% Low Linear Density Polyethylene (LLDPE); (2) the Seat Cushion has a seat core made of 100% LLDPE, a seat form made of 100% Polyurethane, and a choice of three upholstery seat covers (a. Fun Cover – 79% Polyvinyl Chloride / 21% Polyester, b. Living Color – 100 Polyester, and c. Outdoor Cover – 100% Solution Dyed Acrylic); (3) the Back Cushion has a back core made of 100% LLDPE, a back foam made of 100% Polyurethane, and a choice of three upholstery back covers (a. Fun Cover – 79% Polyvinyl Chloride / 21% Polyester, b. Living Color – 100 Polyester, and c. Outdoor Cover – 100% Solution Dyed Acrylic); (4) the Arm Cushion has an arm core made of 100% LLDPE, an arm foam made of 100% Polyurethane, and a choice of three upholstery arm covers (a. Fun Cover – 79% Polyvinyl Chloride / 21% Polyester, b. Living Color – 100 Polyester, and c. Outdoor Cover – 100% Solution Dyed Acrylic); (5) the Arm Nesting Table is made of 100% ½-inch industrial grade particle board with plastic laminate sides and edges; (6) the 10-Inch Base Table is made of 100% ½-inch industrial grade particle board with plastic laminate sides and edges; (7) the 20-Inch Base Table is made of 100% ½-inch industrial grade particle board with plastic laminate sides and edges; and (8) the 30-Inch Base Table is made of 100% ½-inch industrial grade particle board with plastic laminate sides and edges.
A reading of the Legal Note 2 and 2 (a) to Chapter 94 of the Harmonized Tariff Schedule of the United States (HTSUS) provides at 2 that articles (other than parts) referred to in the headings of 9401 to 9403 are to be classified in those headings only if they are designed for placing on the floor or ground, and at 2 (a) the following are, however, to be classified in the above headings even if they are designed to be hung, to be fixed to the wall or to stand one on the other --- (a) Cupboards, bookcases, other shelved furniture (including single shelves presented with supports for fixing them to the wall) and unit furniture and (b) Seats and beds. One also finds in a reading of the Explanatory Notes (ENs) to the HTSUS, Chapter 94, “General,” a further elaboration of Legal Note 2 (a) to include “separately presented elements of unit furniture.”
The term “unit furniture” is not defined in the text of Chapter 94 or its heading 9403 of the HTSUS, nor the ENs to the HTSUS. When terms are not defined, they are construed in accordance with their common and commercial meaning – Nippon Kogasku (USA), Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).
In Storewall, LLC versus the United States, Slip Op. 09-146, Court No.05-00462 dated December 18, 2009, the United States Court of International Trade (CIT), using relevant sources derived the following meaning for the term unit furniture: An item (a) fitted with other pieces to form a larger system or which is itself composed of smaller complementary items, (b) designed to be hung, or fixed to the wall, or stand one on the other or side by side, (c) assembled together in various ways to suit the consumer’s individual needs to hold various objects or articles, and (d) excludes other wall fixtures such as coat, hat and similar racks, key racks, clothes brush hangers, and newspaper racks. Further, The United States Court of Appeals for the Federal Circuit, in Storewall, LLC versus the United State, 2010-1193, not only upheld the meaning of unit furniture as defined by the CIT, but also added that unit furniture may be assembled together in various ways to suit the consumer’s individual needs to hold various objects and articles, and it was this versatility and adaptability that was the essence of unit furniture.
When the seating configurations are assembled together they are unit furniture and form chairs, love seats, sofas and other seating arrangements. When tables are added, they remain unit furniture and are considered composite goods. Collectively, when the unit furniture of the merchandise concerned is assembled together, the Cellulartm belongs to a class or kind of furniture known as a modular seating system.
You further indicate that the components of the modular seating system are shipped together in boxes 31-inches wide by 31-inches long by 28-inches high. It is your position that when the components are shipped together, although in separate boxes, that they create a finished seating configuration, and therefore should be classified in subheading 9401.80.6028, HTSUS.
Under GRI 2 (a), “any reference to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.” GRI 2 (a) does not apply when unassembled components of goods are imported separately. When component parts are imported as separate items, the goods are classified separately. Whereas, if component goods of unassembled articles are imported together, in equal quantities, even in separate boxes, the items are aggregated to determine the appropriate classification – see Headquarters ruling, HQ H079175 dated April 8, 2010.
We are in agreement that when the components of the modular seating system are shipped together, in equal quantities, although separately boxed, that the classification is one of the finished modular seating system. Under the General Rules of Interpretation (GRIs) to the HTSUS, at GRI 3 (b), the essential character of the modular seating system is imparted not by the particle board (wooden) table or tables, but rather by the seating components of the various configurations. Subheading 9401.80.6028, HTSUS, is for “Other” household seats, yet marketing information on the website of www.ilikeoi.com indicates uses in addition to one’s household, such as for schools and universities, libraries, business centers, retail stores and more. It is our opinion that the term household of subheading 9401.80.6028, HTSUS, is too limited in scope to the application of the merchandise concerned.
The applicable subheading for the Cellulartm modular seating system, with or without a base(s), when imported in separate boxes, in a Fun Cover or Outdoor Cover chiefly or wholly of plastics, and as a one-to-one entirety on the same shipment, will be 9401.80.4046, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Seats (other than those of heading 9402) whether or not convertible into beds, and parts thereof: Other seats: Of rubber or plastics: Other: Other: Other.” The rate of duty will be free.
At this time, we are unable to rule on the modular seating system having a Living Cover because an incomplete material breakdown was submitted. For purposes of issuing a ruling on the modular seating system having a Living Cover, we need per component (cushion, foam and cover) a full material breakdown by composition (i.e., type of plastic, type of textile, etc.), weight of each component, and cost of each component. Include a summarization table of each component, as well as a summarization table in the aggregate.
Lastly, you inquire as to parts shipped separately or which do not complete a seating configuration (modular seating system), such as replacement parts. It is our opinion with the exception of the Base that when components are shipped separately or do not complete a seating configuration, that we do not have parts, but rather separately presented elements of unit furniture, either classifiable in the provision for “Seats ….” of heading 9401, HTSUS, or classifiable in the provision for “Other furniture ….” of heading 9403, HTSUS. Excluding the classification of the Base component, we find that your suggested classification number of subheading 9401.90, HTSUS, as parts of seats, for the merchandise concerned to be erroneous.
We find that the Base made of plastic designed to be incorporated with the modular seating system, when imported separately, is a “part” of the seating configuration and as such is classifiable in subheading 9401.90, HTSUS, over that of your suggested classification of “Other articles of plastics ….” in heading 3926, HTSUS.
As for the tables, when imported in a complete modular seating system(s) they are classifiable in the provision for seats under heading 9401, HTSUS, based on the essential character of the completed modular seating system. However, when separately imported they cannot be classified as seats having a wooden frame, 9401.61, HTSUS or parts of seats in subheading 9401.90, HTSUS, when in fact they are wooden tables. Specifically, when imported without a seating configuration, the tables made of wood are considered separately presented elements of unit furniture classifiable in subheading 9403.60, HTSUS, the provision in part for “Other furniture and part thereof: Other wooden furniture.”
Like above, we are unable to rule upon components of a modular seating system having a Living Cover without a full material breakdown.
The applicable subheading for the individual components of the Cellulartm modular seating system, not including the Base or table(s), in a Fun Cover or Outdoor Cover chiefly or wholly of plastics, when imported separately, falling under the category of separately presented elements of unit furniture, will be 9401.80.4046, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Seats (other than those of heading 9402) whether or not convertible into beds, and parts thereof: Other seats: Of rubber or plastics: Other: Other: Other.” The rate of duty will be free.
The applicable subheading for the Cellulartm Base, made of plastic, and designed to be incorporated with the components of a modular seating system, when imported separately, will be 9401.90.3580, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Seats (other than those of heading 9402) whether or not convertible into beds, and parts thereof: Parts: Other: Of rubber and plastics: Other.” The rate of duty will be free.
The applicable subheading for the Cellulartm Arm Nesting Table, 10-inch Base Table, 20-inch Base Table and 30-inch Base Table, made chiefly of particle board, when imported separately, and falling under the category of separately presented elements of unit furniture, will be 9403.60.8081, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other furniture and parts thereof: Other wooden furniture: Other: Other.” The rate of duty will be 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/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Neil H. Levy at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division