HQ 0080045 - Decision on Application for Further Review of Protest No: 3401-6-000027 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1990 HQ Rulings > HQ 0078115 - HQ 0080900 > HQ 0080045

HQ 080045

August 8, 1988

CLA-2 CO:R:C:G 080045 DC

CATEGORY: CLASSIFICATION

TARIFF NO.: 727.35

District Director of Customs
P.O. Building
Pembina, North Dakota 58271

RE: Decision on Application for Further Review of Protest No: 3401-6-000027

Dear Sir:

This protest was filed against your decisions in the liquidations on May 9, 1986, of various entries covering modules and components of modular furniture systems manufactured in Canada.

FACTS:

The merchandise involved may be described as modular furniture modules, supporting panels, lamps, electrical connectors and installation hardware shipped together which after importation will be assembled to create desks and tables that are free standing, desk add-on units, desk shells, storage cabinets, other furniture accessories and enclosing partitions. The supporting panel units are in chief value of metal and the furniture modules are in chief value of wood.

In Canada the modules are brought to an unfinished state and held in inventory until required for the completion of a specific installation. Those required for the installation are then stained or colored and brought to a finished condition ready for installation. The support panels are manufactured to order with appropriate customer selected wood and fabric finishes. When they leave the factory, each module or support panel is dedicated to use as an element of a complete system and is shipped together with all the remaining elements of the system.

Each of the twenty-two entries covered by the protest contains one or more complete, unassembled modular furniture systems. When assembled, each will constitute a complete modular office. Upon entry the supporting panel units were classified under the provision for other articles of iron or steel, not coated or plated with precious metal in item 657.25, Tariff Schedules of the United States (TSUS). Those components of the modules which are free standing were classified under the provision for furniture other than chairs in item 727.35, TSUS. Those components of the modules which need a wall for support or may sit on another piece of furniture were classified under the provision for other parts of furniture in item 727.40, TSUS.

The protestant claims that the modular furniture system is classifiable as an entirety under the provision for furniture other than chairs in item 727.35, TSUS. Alternatively, it is claimed that the modules are provided for in item 727.35, TSUS, while the supporting panel units are classifiable under item 727.70, TSUS, as other furniture.

You have taken this occasion to raise again the issue as to the classification of furniture which attaches to screens or may stand on other furniture. It is your position that all sections of furniture are classifable as wood furniture and not as parts of furniture. This would be so unless a part was needed to complete a functional section of furniture.

ISSUE:

1. Are the modular furniture systems consisting of load bearing panels, work surfaces, shelving units and cabinets classifiable as tariff entities pursuant to the doctrine of entireties?

2. Are those pieces of furniture that need a wall for support or sit on another piece of furniture within the purview of the term "furniture" for tariff purposes?

LAW AND ANALYSIS:

The court in the case of Mattel, Inc. v. United States, 8 CIT 323 (1984), discussed the doctrine of entireties and enumerated certain principles as follows:

Under the relevant case law pertaining to the doctrine of entireties, a few guiding, though somewhat discordant, principles emerge. First, if the imported articles, when combined, nevertheless retain their individual identities and do not become subordinated to the whole, then the articles are not dutiable as an entirety. Donalds, Ltd., Inc. v. United States, 32 Cust. Ct. 310, 315 (1954). Also,
if the articles, in combination, form a new article with a different character or use from the parts, an entirety results. E.M. Stevens Corp. v. United States, 49 Cust. Ct. 203, 204 (1962), appeal dismissed, 53 CCPA 155 (1966). Further, if one part is 'merely incidental to the predominant part insofar as the character or use of the combination is concerned,' the parts will be considered an entirety. Id.

Other cases have noted that if articles have a "natural affinity or relation" to each other, or if one article is "essential to the completeness" of the other, then the articles should be considered an entirety. United States v. John Wanamaker, Philadelphia, Inc., 20 CCPA 367, 369 (1933). An early leading case, Altman & Co. v. United States, 13 Ct. Cust. Appls. 315 (1925), seems to endorse a less rigorous standard. There, the court simply stated that if the parts are designed to be joined and form a "complete article of commerce," they should be treated as entireties. Id. at 318.

Finally, courts must be wary of the fluid nature of the doctrine. Other decisions repeatedly have cautioned that analogies to past cases may be unreliable and that multiple fact patterns possible under the doctrine make mechanical application unwise. See Charles Garcia & Co. v. United States, 37 Cust. Ct. 117, 119 (1956), aff'd, 45 CCPA 1 (1957). Indeed, the Court of Customs and Patent Appeals (now the Court of Appeals for the Federal Circuit) has stated that "the doctrine of entireties, because of its scope, can lead to two contrary conclusions depending on what criteria are given controlling effect." Miniature Fashions, Inc. v. United States, 54 CCPA 11, 17 (1966). The Miniature Fashions court also placed the doctrine in its proper perspective. It is merely an aid in the construc- tion of the tariff laws. The intent of Congress is the one controlling criterion. See id. at 16.

In Headquarters Ruling Letter (HRL) 041619 dated November 24, 1975, Customs held that certain furniture consisting of shelves, cabinets, panels, and desks which attach to and are supported by poles extending to the ceiling were classified as separate articles and not as entireties because the importation did not include all the components necessary to comprise a complete unit. We may infer here that had the importation included all the components necessary to comprise a complete unit then classification as entireties would have been appropriate.

In T.D. 71-35 certain modular furniture sections which could be arranged into different units, including a bed unit with mattress, the mattress not being the usual or standard size but specially made in size and design to fit modular units were classified as furniture.

It is stated by the protestant that each unassembled modular furniture system as imported is a complete unit ready for assembly. The modular and supporting panel units are not purchased or used as individual units but are designed to be used together in a specific configuration.

Inasmuch as the panels and modules are designed to fit when joined together a complete article of commerce e.g., a modular furniture system, it is our view that such a combination constitutes an entirety for tariff purposes.

Concerning the second issue, in the past this office has taken the position that certain pieces of furniture that may need a wall for support or may sit on another piece of furniture are classifiable as a part of furniture. The rulings which are relevant to this issue are as follows:

(1) Headquarters Ruling Letter (HRL) 041619 NM dated November 24, 1975, held that a shelf or desk that could not stand alone and have utility by itself would be classifiable as a part.

(2) HRL 043860 c dated April 29, 1976, held that 36 inch unfinished desk units which were not free standing units in themselves and were not used independently of the free standing units (bookcase units) were classifiable as parts of furniture. Our rationale for this ruling was that a desk which is in need of a screen for support does not meet the tariff definition of furniture because it is not "designed to be placed on the floor."

(3) HRL 076297 JLJ dated October 25, 1985, held that hutches are classifiable as parts of furniture because the absence of an essential part i.e., a buffet or other piece of furniture for the hutches to stand on precludes classification as furniture.

Schedule 7, Part 4, Subpart A, Headnote 1, TSUS, provides as follows:

1. For the purpose of this subpart, the term "furniture" includes movable articles of utility, designed to be placed on the floor or ground, and used to equip dwellings, offices, restaurants, libraries, schools, churches, hospitals, or other establishments, aircraft, vessels, vehicles, or other means of transport, gardens, patios, parks, or similar outdoor places, even though such articles are designed to be screwed, bolted, or otherwise fixed in place on the floor or ground; and kitchen cabinets and similar cupboards, seats and beds, and sectional bookcases and similar sectional furniture, even though designed to be fixed to the wall or to stand one on the other; ***.

It is a cardinal principle of Customs law that merchandise is classifiable in its condition as imported. Those pieces of furniture such as hutches, bookcases and desk units that need a wall or screen for support or may sit on another piece of furniture are neither floor standing nor functional in their condition as imported. Consequently, it is our position that classification as parts of furniture is appropriate.

HOLDING:

The modular furniture systems imported as units and consisting of load bearing panels, work surfaces, shelving units, and cabinets in chief value of wood are classifiable under the provision for furniture other than chairs in item 727.35, TSUS.

In view of the result reached here, that portion of HRL 076745 dated October 17, 1985, holding that panels or screens designed to be incorporated with shelving units, cabinets, and desk tops to create "work modules" are excluded from classifi- cation as furniture pursuant to Schedule 7, Part 4, Subpart A, Headnote 1(v), TSUS, is revoked.

Those pieces of furniture that need a wall for support or sit on another piece of furniture are not classifiable as furni- ture under item 727.35, TSUS.

The protest is allowed in part. A copy of this decision should be attached to the Form 19 Notice of Action to be sent to the protestant.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling