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HQ 081876


November 22, 1988

CLA-2:CO:R:C:G 081876 SR

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.29

Jeanne M. Burns
Thornley and Pitt, Inc.
48 Gold Street
San Francisco, CA. 94133

RE: Classification of plastic bags

Dear Ms. Burns:

This is in response to your letter of January 10, 1988, requesting the tariff classification of plastic bags under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). A sample was submitted.

FACTS:

The merchandise involved is polyethylene plastic bags to be used in retail stores to pack produce, meat, dairy products, and frozen foods. The bags are used to keep moisture from food products from wetting an outside bag used to transport the items home.

ISSUE:

1. Whether the results reached in a court case decided under the Tariff Schedules of the United States (TSUS) controls the classification of the instant merchandise under the HTSUSA.

2. Whether the bags are classifiable under subheading 3923.29, HTSUSA, as articles for the conveyance or packing of goods, of plastics.

LAW AND ANALYSIS:

ISSUE NO. 1

Item 772.20, TSUS, provides for containers of rubber or plastics, with or without their closures, chiefly used for the packing, transporting, or marketing of merchandise. It has been suggested that the principle ennunciated in the case of Imperial Packaging Corp. v. United States, 2 C.I.T. 250 (1981), controls the classification of the plastic bags at issue under the HTSUSA. The court in Imperial, supra, held that the word merchandise (as used in item 772.20, TSUS), refers to goods that are still in the stream of commerce and does not include articles which are personal effects or commodities in the hands of the ultimate consumer. The court also stated that "clear plastic bags for produce, usually in rolls on elevated racks and perforated for easy removal, are also excluded if used in the supermarket at the point of sale." Id. at 253.

The TSUS is not controlling over the HTSUSA. Although the two provisions appear to be very similar the terms are not the same. Each provision must be narrowly construed by the language provided. The word "goods" is not the same as the word "merchandise" and therefore is not to be interpreted the same way "merchandise" was under the TSUS, as referring only to articles still in the stream of commerce. This is further supported by the fact that plastic shopping bags which are excluded from item 722.20, TSUS, because they are used in the packing and conveyance of goods outside the stream of commerce are specifically stated to be classified under heading 3923.29, HTSUSA.

ISSUE NO. 2

Heading 3923, HTSUSA, states: "Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics." The plastic bags at issue are used for the packing and conveyance of foods from the grocery store to the homes of the consumers.

The classification of these plastic bags under heading 3923, HTSUSA, is supported by heading 4202, HTSUSA. Heading 4202, HTSUSA, covers, among other items, shopping bags. Note 2(a) to chapter 42 states that heading 4202 does not cover bags made of plastic sheeting, whether or not printed, with handles, not designed for prolonged use. It specifies that these plastic shopping bags are to be classified under heading 3923, HTSUSA. Shopping bags, like the bags at issue, are provided to
consumers at the time of purchase. Shopping bags are designed to package or convey articles which are commodities in the hands of the ultimate consumer and which are no longer in the stream of commerce. The inclusion of plastic shopping bags in heading 3923, HTSUSA, is an indication that the provision includes all types of articles for the conveyance or packing of goods, regardless of whether they are used for merchandise still in the stream of commerce or in the hands of the consumer.

HOLDING:
ISSUE NO. 1

The word "goods," as used in 3923.29, HTSUSA, is not intrepreted the same way as "merchandise," as used in 772.20, TSUS, was interpreted by the court in Imperial, supra.

ISSUE NO. 2

The bags at issue are classifiable under subheading 3923.21.00, HTSUSA, as articles for the conveyance or packing of goods, of plastics, sacks and bags, of polymers of ethylene. The rate of duty is 3 percent ad valorem.

Sincerely,

John Durant, Director

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