CLA-2 OT:RR:CTF:TCM W968385 BAS
Ms. Lisa Westercamp
General Manager
Portafolia Gifted Memories
1948 Highway 1 North
Fairfield, IA 52556
RE: Scrapbooking Gift Set in Rattan Basket
Dear Ms. Westercamp:
This is in response to your request dated July 17, 2006, on behalf of Portafolia Gifted Memories (Portafolia L.L.C.), seeking a binding ruling on the classification under the Harmonized Tariff System of the United States (HTSUS), of a “Scrapbooking Gift Set in Rattan Basket” imported from China. Your letter and sample were forwarded to this office for our response.
FACTS:
The subject merchandise is an open basket, item CLU258, made of interwoven rattan rods, containing two scrapbooks (albums) and miscellaneous craft accessories that may be used to create and decorate the scrapbooks. Some of the accessories (namely 2 pairs of scissors, 2 paper punches and a packet of brads) are held in a pocketed leather (or imitation leather) band that is permanently wrapped around, and attached to, the exterior of the basket. The basket also has a handle wrapped in imitation leather. The components of the set consist of over 1000 items including the following: 32 acid free papers, 60 Epoxy labels, 36 feet of yarn, six feet of ribbon, 120 buttons, 225 Brads, 128 eyelets, 200 sequins, 180 flowers, 1 12” x 12” scrapbook, 1 6” x 6” scrapbook, 4 rubber stamps, 6 gel pens, 2 scissors and 2 punches. The components are to be packaged, imported and sold together as one unit. The sample submitted contained scrapbooks that had slightly different measurements than the brochure; the sample scrapbooks measured 13.5” x 12.25” and 9.5” x 8.5”.
ISSUES:
Does the “Scrapbooking Gift Set in Rattan Basket” meet the definition of a set for classification purposes?
If the subject merchandise is a set, which component of the set imparts the essential character?
What is the proper classification of the component which imparts the essential character?
LAW AND ANALYSIS:
ISSUE ONE: Does the “Scrapbooking Gift Set in Rattan Basket” meet the definition of a set for classification purposes?
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI (2) (b) states in part that the classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3. We note that the rattan basket is described by heading 4602. We also note that the albums are described by heading 3926, HTSUSA, which provides in part for “Other articles of plastics.” The rubber stamps are providing for in heading 9611, HTSUS. The scissors, are provided for in heading 8213, HTSUSA, which provides for scissors valued not over $1.75 per dozen. The hole punch is described by heading 8203, which provides for perforating punches.
As the gift set at issue is prima facie classifiable by two or more headings, we must classify it according to GRI 3. GRI 3 states the following, in pertinent part:
When by application of rule 2(b) or for any 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 it they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
In the instant case, two or more headings refer to part only of the materials or part only of the items in a set put up for retail sale as contemplated by GRI 3. Since we have various items sold together, we must first determine if we have a set put up for retail sale. The Harmonized Commodity Description And Coding System Explanatory Notes (EN's) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN's provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the HTSUS. CBP believes the EN's should always be consulted. See T.D. 89-80, 54 Fed.Reg. 35127, 35128 (Aug. 23, 1989). EN (X) to GRI 3(b), states that 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….; (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).
In this instance, we believe that the “Scrapbooking Gift Set meets the EN's definition of "goods put up in sets for retail sale." First, the scrapbooking gift set consists of at least two different articles, which are, prima facie, classifiable in two different headings. Secondly, the items are put up together to carry out the specific activity of scrapbooking. The scissors, paper, hole puncher and numerous embellishments will be used together or in conjunction with the scrapbooks, the basket being specifically designed to accommodate the scissors, hole punches and brads within the pocketed band. Lastly, the articles are put up in a manner suitable for sale directly to users without repacking. We thus believe that the scrapbooking gift set qualifies as a set of GRI 3(b); and, we must then determine which item imparts the essential character to the set.
ISSUE TWO: If the subject merchandise is a set, which component imparts the essential character to the set?
Since the scrapbooking gift set is imported as a set and described in part by two or more headings of the HTSUS, we must apply GRI 3(b). GRI 3(b) states that 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.
In general, essential character has been construed to mean the attribute, which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article. EN (VIII) to GRI 3(b), provides further factors, which help determine the essential character of goods. Factors such as bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods are to be utilized, though the importance of certain factors will vary between different kinds of goods.
The issue in this case is which item in the scrapbooking gift set imparts the essential character. We find that the following are the items which merit equal consideration in determining essential character: the tools, the basket and the scrapbooks.
An important factor to consider in determining essential character of the gift set is the value of the various components. In this case the two must valuable items are the rattan basket, which is valued at $3.82 and the scrapbooks which together are valued at $3.85. While the basket is almost the same value as the scrapbooks it merely holds the goods; its function is not indispensable to the activity of scrapbooking. The basket simply assists in this function, as a storage compartment specifically designed to hold the accessories, hole punches and embellishments and keep them readily accessible to the user. See HQ 960587, dated June 23, 1998 (holding that a gardening tool basket simply assists in the function of gardening as a storage compartment specifically designed to hold the tools and keep the readily accessible to the user). A consumer would purchase the “Scrapbooking Gift Set in Rattan Basket” in order to participate in the activity of scrapbooking. While the basket makes it easier to transport the items, the tools, papers and embellishments could easily be transferred to another type of scrapbooking organizer or carrying case and the ‘essence’ of the set would not be diminished.
The tools are another component of the set, which merit consideration in terms of the essential character analysis. The set comes with two sets of scissors and two hole punches. The scissors and hole punches are useful items for scrapbooking but as the scissors have decorative edges, they may or may not be used by the scrapbooker depending on personal taste and style. The hole punch is mainly used for the brads which again are not indispensable to the placement of the photos. While these items are important for making scrapbooks, all four of them are valued only at $1.20. The scrapbooks themselves and the rattan basket are more than three times the value of the tools.
Finally, we must examine the scrapbooks themselves as the item which imparts the essential character to the scrapbooking gift set. It has been our practice that when scrapbooks are imported with accessories with which they may be decorated, the album is considered to be the component that imparts the essential character. See HQ H005082, March 29, 2007, HQ 968250, dated August 3, 2006, NY H 87735, dated February 21, 2002, L86211, dated July 13, 2005, and M84055, dated July 3, 2006. We have also held in at least one instance that a miniature tote bag containing a small scrapbook together with various accessories was a set whose essential character is imparted by the album which is the focal point of the kit. See NY M83422, dated May 26, 2006. Likewise in the instant case, we find that the essential character of the “Scrapbooking Gift Set in Rattan Basket” is imparted by the scrapbook albums. The intended purpose of all of the accessories and the tools included within the rattan basket is to complete the scrapbooks. The product being marketed is a scrapbook set. The focal point of the intended activity (i.e. decorating or embellishing scrapbooks) is the scrapbooks themselves. Therefore, we consider the scrapbooks to impart the gift sets’ essential character.
ISSUE THREE: If the scrapbook imparts the essential character of the set, what is the proper classification of the scrapbook?
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), aff’d, 171 F.3d 1370, (Fed. Cir. 1999).
We find that the component that provides the scrapbooks with their 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.
We find that scrapbook albums are in all material respects similar to photograph albums. It has been the practice of CBP to classify photograph albums according to the material of the pages and not the material of the cover or inserts. See HQ H005082, dated March 29, 2007; HQ W968250, dated August 3, 2006; NY M81024, dated April 3, 2006; NY L87797, dated October 24, 2005; NY L84420, dated May 23, 2005; NY H87735, dated February 21, 2002; NY 185926, dated September 30, 2002; NY 184082, dated August 6, 2002; NY H82195, dated July 9, 2001; NY F87436, dated June 15, 2000; HQ 951845, dated August 20, 1992.
Prior to 2007, CBP has consistently classified similar merchandise in heading 3924, HTSUS. See HQ W968250, dated August 3, 2006; 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 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. Accordingly, the instant merchandise should be classified according to the plastic sleeves.
Pursuant to title 19 United States Code, Section 3005, and the Harmonized Tariff Schedule of the United States were amended to reflect changes recommended by the World Customs Organization. The proclaimed changes are effective for goods entered or withdrawn from warehouse for consumption on or after February 3, 2007. See Presidential Proclamation 8097, 72 FR 453, Volume 72, No. 2 (January 4, 2007). As part of the proclaimed changes, Additional U.S. Note 5 to Chapter 39, HTSUS, was added, which states: “[f]or the purposes of heading 3924, the expression ‘household articles’ does not include photo albums (see subheading 3926.90.48)”. The 2007 HTSUS specifically provides for photo albums in subheading 3926.90.48. In accordance with the rationale of the previous rulings in addition to the 2007 HTSUS amendments, the scrapbook albums at issue should be classified in heading 3926, HTSUS. These amendments bring the HTSUS in conformity with the HSC decision to classify photograph albums with plastic sleeves as other articles of plastics in subheading 3926.90.4800, HTSUS.
Notably, 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 Chapter 39, HTSUS, than the scrapbooks classified in heading 4820, HTSUS, because the subject merchandise has plastic sleeves.
HOLDING:
By application of GRI 3(b), the “Scrapbooking Gift Set in Rattan Basket” is classified under heading 3926, HTSUS, specifically subheading 3926.90.4800, HTSUSA, which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Photo albums.” The column one, general rate of duty is 3.4 percent ad valorem.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch