CLA-2 RR:CTF:TCM W968250 CAM
Mr. Ted Weiss
T.H. Weiss, Inc.
2 Johnson Road
Lawrence, New York 11559
RE: Reconsideration of NY M81259; Scrapbook Albums from China
Dear Mr. Weiss:
This is in response to your request dated April 24, 2006, on behalf of your client, Dimensions Acquisition LLC, seeking reconsideration of New York Ruling Letter (NY) M81259, dated March 28, 2006. NY M81259 concerns a prospective tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of certain scrapbook albums.
FACTS:
In NY M81259, Customs and Border Protection (CBP) described the subject merchandise as scrapbook albums. The dimensions of the scrapbook albums are 12 inches by 12 inches. The scrapbook albums have a cover made of paperboard with sleeves that are made of plastic sheeting. Inside the cover are paper inserts that are also covered in plastic sheeting. Contained inside the scrapbook albums are assorted decorations that depending on the particular scrapbook album could include stickers or paper inserts with designs.
In NY M81259, CBP classified the merchandise under subheading 3924.90.5500, HTSUS, which provides for: “tableware, kitchenware, other household articles and toilet articles, of plastics: other: other.” You have indicated that you believe that CBP should reclassify the scrapbook album under subheading 4820.50.0000, HTSUS, which provides for: “registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard: albums for samples or for collections.” On reconsideration, you have included two samples of the subject merchandise.
The first sample, which the label on the back called “Wedding Cake,” is a wedding themed scrapbook album. The paperboard cover of this sample is predominately white and in the center of the cover is a square gap with a paperboard wedding cake inside the gap. Below the paperboard wedding cake is a blank rectangular space. Instructions located inside the album indicate that decorative stickers are to be placed in the blank rectangular space. The decorative stickers are composed of the letters of the alphabet, the punctuation sign for a period, and certain symbols.
The second sample, which the importer has named “School Days Album,” is a children’s themed scrapbook album. In this sample, the paperboard cover contains several colors with various designs and letters. In the center of the cover, is a blank square space. Instructions inside the cover state that paper inserts, which display a child’s grade, can be placed in the blank space on the cover. Another option, though not stated in the instructions, is that the purchaser could place a photograph in the space.
ISSUE:
What is the proper classification under the HTSUS for certain scrapbook albums?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings 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 require otherwise, then CBP may apply the remaining GRIs.
In interpreting the headings and subheadings, CBP looks to the Harmonized Commodity Description and Coding System Explanatory Notes (ENs), which constitute the official interpretation of the HTSUS. While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and, generally,
indicate the proper interpretation of headings. See T.D. 89-80, 54 FR 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
3924 Tableware, kitchenware, other household articles and toilet articles of plastics:
* * *
3924.90 Other:
* * *
3924.90.55 Other
4820 Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard:
* * *
4820.50.00 Albums for samples or for collections
The subject merchandise consists of separate components that are each classifiable under different headings. Here, the separate components consist of a scrapbook album with paper inserts covered with plastic sheeting and assorted decorations. As a result, the merchandise cannot be classified under GRI 1, and CBP must apply the remaining GRIs. When “goods are, prima facie, classifiable under two or more headings, then classification” shall be made pursuant to GRI 3, which states the following:
(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.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
In the instant case, the respective headings for each of the separate components is equally specific and, therefore, not classifiable by GRI 3(a). Proceeding to GRI 3(b), the first issue CBP considers is whether the subject merchandise are goods put up in sets. EN X for GRI 3(b) defines “goods put up in sets for retail sale” as such goods that: (a) consist of at least two different articles that are prima facie classifiable in different headings; (b) consist of products 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.
The subject merchandise is a set of goods for retail sale within the definition provided by the EN X to GRI 3(b). The merchandise consists of a scrapbook album with paper inserts covered with plastic sheeting and assorted decorations, which are prima facie classifiable in different headings. The merchandise carries out the specific activity of functioning as a scrapbook to display photographs, which can be decorated with the stickers or paper designs. Finally, the merchandise is sold as a single good directly to the user.
Since the subject merchandise consists of goods put up in sets, the essential character of the item determines its ultimate classification. According to EN VIII to GRI 3(b), the factor, which establishes the essential character, will vary between different goods. Common factors used to decide the essential character may include the nature of the material or component, its bulk, quantity, weight or value, or 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 GRI 3(b). These cases have looked primarily to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed, 119 F.3d 969 (Fed. Cir. 1997); Vista International Packaging Co., v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995); See also, Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), affirmed, CAFC No. 98-1227 (March 16, 1999).
In your letter, you aver that the plastic sleeves are not the essential character and that the correct classification for the scrapbook album is heading 4820, HTSUS, specifically, subheading 4820.50.0000, HTSUS. You indicate that the “insertion photos and pictures” imparts the essential character of the subject merchandise, not the composition of the sleeves. You also provided a breakdown of the costs of the subject merchandise, which you claim demonstrates that the sleeves are not the primary cost of the merchandise.
The component that provides your client’s merchandise with its essential character is the plastic sheeting of the scrapbook album. The primary use of the scrapbook album is to store photos and pictures and the plastic sheeting facilitates that function. In particular, it is the plastic sheeting over the paper inserts that secures the photos in the album. Though other materials play a role in the use of the album like the cover that binds the album or the paper inserts that the pictures are placed on, it is the plastic sheeting that allows the purchaser to protect and organize photos and pictures. Accordingly, the merchandise is classifiable as a scrapbook with plastic sleeves.
You suggest classification in heading 4820, HTSUS, which provides for albums of paper or paperboard. Merely stating that a purchaser could insert photos and pictures into the album is not sufficient by itself to establish classification in that heading. Instead, CBP would have to find that that the paperboard covers of the scrapbook albums and not the plastic sleeves impart the essential character of the album. But, the plastic sleeves and not the paperboard cover allow the purchaser to insert photos and pictures.
In regards to cost breakdown that you provided, CBP acknowledges that costs can be indicative of the essential character of merchandise; but, the cost of certain materials in a good is not dispositive of its essential character. Rather, the factors that are relevant in an essential character test can vary and, in this instance, the predominate use of the plastic sleeves in displaying and protecting photos and pictures imparts the essential character.
CBP has consistently classified similar merchandise in heading 3924, HTSUS. For instance, several CBP rulings have classified scrapbook albums with plastic sleeves in heading 3924, HTSUS. See NY H87735, dated February 21, 2002; NY L84420, dated May 23, 2005. CBP has, also, regularly classified photo albums by the merchandise’s plastic sleeve. See NY M81024, dated April 3, 2006; NY L87797, dated October 24, 2005; NY I85926, dated September 30, 2002; NY I84082, dated August 6, 2002; NY H82195, dated July 9, 2001. Specifically, in Headquarters Ruling Letter (HQ) 951845, dated August 20, 1992, CBP held that a photo album with paper inserts, plastic filler pages, and an outer surface composed of cellular plastics with a textile fabric reinforcement was correctly classified in heading 3924, HTSUS. In accordance with the previous rulings, the scrapbook albums at issue should be classified in heading 3924, HTSUS.
In fact, the only instance where CBP has classified scrapbook albums in heading 4820, HTSUS, is when the subject merchandise does not have a plastic sleeve at all. See NY M82265, dated May 19, 2006; NY K88852, dated September 9, 2004; NY J87084, dated August 25, 2003. In the instant case, the merchandise is more like the photo and scrapbook albums classified in heading 3924, HTSUS, than the scrapbooks classified in heading 4820, HTSUS, because the subject merchandise has plastic sleeves.
After determining that the essential character is imparted by the plastic sleeves, we note that the subject merchandise is classified in heading 3924, HTSUS, which provides for household articles of plastic, because the sleeves of the scrapbook album are made of plastic and the principal use occurs within the household.
HOLDING:
By application of GRI 3(b), the scrapbook albums are classified under heading 3924, HTSUS, specifically, in subheading 3924.90.5500, HTSUS, which provides for: “tableware, kitchenware, other household articles and toilet articles of plastics: other: other.” The general, column one rate of duty is 3.4 % percent ad valorem.
EFFECT ON OTHER RULINGS:
NY M81259, dated March 28, 2006, is affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial & Trade Facilitation Division