CLA-2-94:OT:RR:NC:N4:463
TARIFF: 9403.20.0050
Elizabeth Merritt
A.N. Deringer
173 W. Service Rd.
Champlain, NY 12919
RE: The classification and country of origin of a 7-drawer tool chest
Dear Ms. Merritt:
This ruling is being issued in reply to your letter dated February 28, 2024, on behalf of your client, Meridian International Co. Ltd., requesting the classification, country of origin and Generalized System of Preferences (GSP) applicability for a 7-drawer tool chest. In lieu of a sample, illustrative literature and a product description were provided.
FACTS
The 7-Drawer TACTIX Tool Chest with SKU # 326301 is described as a tool chest that measures approximately 41.5" (W) x 17.7" (D) x 24.6" (H) and weighs approximately 143 lbs. It has seven pull-out drawers, a hinged cover, and large C-shaped side handles. The body of the tool chest is made of powder-coated 19-gauge steel, and the drawers are made of powder-coated 21-gauge steel. The tool chest will sit atop a matching wheeled cabinet. The tool chest and the cabinet are sold together as a set. The tool chest will be marketed for home use through home improvement stores. See image below:
MAJOR COMPONENTS OF TOOL CHEST (Steel)
. Lid (1)
. Rail mounting plates (6)
. Base plate (1)
. Side plates (2)
. Back plate (1)
. Dummy plate (1)
. Liner plates (4)
. Drawer plates (7)
. Base plate stiffener (1)
. Lid stiffener (1)
. Rail mounting plate stiffener (1)
MANUFACTURING
Chinese origin steel coil will be imported into Thailand where it will be processed by means of stamping, shearing, piercing, and bending to produce the 11 components listed above prior to welding. The components will then be powder coated with Chinese-origin powder and final assembly will be performed, including the mounting of the following Chinese components: fixed latch locks (2), gas springs (2), slide rails (8), door and lid trims (8), EVA liner (1), screws (24) and rivets (53). The finished tool chest will then undergo final inspection and be packaged for shipment to the United States.
CLASSIFICATION
Classification under the Harmonized Tariff Schedule of the United States (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. If the goods cannot be classified solely based on 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.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and coding System, which constitutes the official interpretation of the Harmonized System at the international level, 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 HTSUS.
Although the term "furniture" in Chapter 94 is generally limited to articles "designed for placing on the floor or ground," "unit furniture" is an exception. However, the term "unit furniture" is not defined in either heading 9403 of the HTSUS or in the corresponding ENs. In the absence of such guidance, tariff terms may be construed in accordance with their common and commercial meanings.
A search of relevant sources indicates that the term "unit furniture" is similar in meaning to the term "modular furniture," in which different elements of furniture are designed and intended to be used to create one unit. For example, one unit could consist of a base floor cabinet with a hutch designed to rest on top. Such furniture is clearly designed to be used together, and it includes directions for attaching the furniture together and advertisements showing the furniture functioning as a unit. (See N313153, N335208 and N320093.)
In this instance, the top tool chest is designed to be placed on top of the base cabinet and is larger and heavier than the toolboxes classified in heading 7326, HTSUS. Although this tool chest is not affixed to a base cabinet, at 143 lbs., it is a substantial article designed to equip a garage and designed to function as a unit with a base cabinet. It is our determination that the subject tool chest is a separately presented element of "unit furniture" within the meaning of Note 2 to Chapter 94. Therefore, it will be classified in subheading 9403.20.00, HTSUS. This determination is consistent with HQ 966672, dated March 8, 2004.
Heading 9403, HTSUS, has subheading breakouts for "Metal furniture of a kind used in offices," "Other metal furniture, Household:" and "Other metal furniture, Other:". In HQ H313152, March 9, 2023, CBP determined that metal storage lockers and cabinets for garage use are household furniture. Since this tool chest is designed for garage use, it too will be classified as household furniture.
The applicable classification for the 7-Drawer TACTIX Tool Chest, SKU # 326301, will be subheading 9403.20.0050, HTSUS, which provides for "Other furniture and parts thereof: Other metal furniture: Household: Other: Other." The general rate of duty will be free.
GENERALIZED SYSTEM OF PREFERENCES APPLICABILITY
Since subheading 9403.20.0050, HTSUS, is an unconditionally free tariff provision, GSP is unavailable.
COUNTRY OF ORIGIN
Section 134.1(b), Customs Regulations (19 CFR 134.1(b)) defines "country of origin" as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin." A substantial transformation occurs when articles lose their identity and become articles having a new name, character, or use.
Generally, the U.S. Court of International Trade has determined whether a substantial transformation has occurred by asking whether the manufacturing or processing substantially transformed the foreign materials in question into an article having a name, character or use different from the name, character, or use of those materials before such processing.
Under the CBP laws, if the article consists of materials produced, derived from, or processed in more than one country, it is considered a product of the country where it last underwent a "substantial transformation." According to U.S. courts, a substantial transformation occurs when articles lose their identity as such and become new articles having a new "name, character or use."
In order to determine whether a substantial transformation has occurred, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article.
The requester contends that the Chinese origin sheet steel not only lose its identity when processed in Thailand, resulting in an article with a new "name, character or use" but undergoes a double-substantial transformation. This office agrees that the Chinese coil undergoes a substantial transformation when processed into the aforementioned components and that the subsequent assembly of these components into a finished tool chest amounts to a second substantial transformation. (See HQ 557066.)
Based on the foregoing, the country of origin of the 7-Drawer TACTIX Tool Chest, SKU # 326301, is Thailand.
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 on the internet at https://hts.usitc.gov/current.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. If the facts are modified in any way, or if the goods do not conform to these facts at the time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of Title 19 of the Code of Federal Regulations (19 CFR Part 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 Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division