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HQ 082051


January 26, 1989

CLA-2 CO:R:C:G 082051 SR

CATEGORY: CLASSIFICATION

TARIFF NO.: HTSUS 800.00; 740.41

District Director of Customs
880 Front Street
Rm. 5-S-9
San Diego, California 92188

RE: Internal Advice Request No. 85/87 Concerning the Tariff Classification of Certain Suntan Lotion Bracelets

Dear Sir:

This request for Internal Advice was initiated by a letter dated August 24, 1987, from John V. Mc Nally, Atty-in-Fact for Mexican Technology, Inc.

FACTS:

The merchandise involved is a suntan lotion bracelet made up of U.S. components which are assembled in Mexico. Rolls of U.S. made plastic tubing are sent to Mexico where they are molded, cut, and filled with U.S.-made suntan lotion. Clasps are then added and the units are assembled to form one-ring circular bracelets. The finished bracelets are then packed in material of U.S. origin and sent back to the United States.

The "Handy Tan Bracelet" is advertised as a high fashion bracelet that comes in four high fashion colors. The bracelets are marketed: "Bangle it, dangle it from the wrists and ankles, or hook it onto your bike, tennis bag or beach chair. Now you can work on your tan wherever you go." The bracelet would be very difficult to refill with suntan lotion.

ISSUE:

1. Whether the suntan lotion can be accorded free entry as United States goods returned under item 800.00, Tariff Schedules of the United States (TSUS).

2. Whether the "bracelet" is the usual container for the suntan lotion.

LAW AND ANALYSIS:

ISSUE NO. 1

Merchandise of U.S. origin which is sent abroad for repacking for sale to the ultimate purchaser is accorded free entry as United States goods returned in item, 800.00, TSUS, even if the packaging materials are not of U.S. origin. In Border Brokerage Company, Inc. v. United States, 65 Cust. Ct. 50, C.D. 4052, 314 F. Supp. 788 (1970), appeal dismissed, December 23, 1970, involving the same issue, it was established that the test to be applied in item 800.00, TSUS, cases is whether the merchandise of American origin has itself (apart from its container) been the object of advancement in value or improvement in condition while abroad. The suntan lotion has not been advanced in condition, it was only put in packages.

ISSUE NO. 2

General Headnote 6(b)(i), TSUS, reads as follows:

6. Containers or Holders for Imported Merchandise. For the purposes of the tariff schedules, containers or holders are subject to tariff treatment as follows: * * *

(b) Not Imported Empty: Containers or holders if imported containing or holding articles are subject to tariff treatment as follows:
(i) The usual or ordinary types of shipping or transportation containers or holders, if not designed for, or capable of, reuse, and containers of usual types ordinarily sold at retail with their contents, are not subject to treatment as imported articles. Their cost, however, is, under section 402 or section 402a of the tariff act, a part of the value of their contents and if their contents are subject to an ad valorem rate of duty such containers or holders are, in effect, dutiable at the same rate as their contents, except that their cost is deductible from dutiable value upon submission of satisfactory proof that they are products of the United States which are being returned without having been advanced in value or improved in condition by any means while abroad.

In determining whether containers holding imported merchandise are usual or unusual containers the court in United States v. Hohner et al., 4 Ct. Cust. App. 122, T.D. 33393 (1913), stated that Congress intended to prevent the importation, under the guise of a covering or container, of articles having a substantial, material and valuable use for purposes other than that of holding or containing the imported merchandise. It provided the following elements to be considered in determining whether a particular container is an unusual one: whether it becomes a subject of trade or commerce; if it is generally devoted to other uses, its adaptability for which are important inducements to the consumer to purchase it with its contents; if it materially enhances the value of the goods to the consumer; and if the cost is considerably greater than that of other containers.

The container at issue is called the "Handy Tan Bracelet." It is advertised as a high fashion bracelet with suntan lotion inside, and it comes in 4 high fashion colors. The bracelet would not become a subject of trade or commerce because it is not refillable and would probably be thrown away when the contents were empty. However, the container is designed for use as a bracelet as well as a container. The adaptability of the container to be worn or hooked to a bike or a backpack is an inducement to the consumer to purchase the bracelet with its contents. This inducement is also suggested by the fact that the bracelet contains only one ounce of lotion when most sun tan lotion is sold in four ounce or larger containers. The bracelet does enhance the value of the goods to the consumer. The importer's advertisements say the customer won't just be buying suntan lotion, they'll be buying the latest fashion. According to the data submitted by the importer, the bracelet costs more per unit than does the suntan lotion. It is a more costly method of packaging than the normal containers.

HOLDING:

ISSUE NO. 1

The merchandise of American origin, the suntan lotion, has not been advanced in value or improved in condition while abroad. It has only been packaged. Therefore, the suntan lotion returns free of duty under item 800.00, TSUS, as a product of the United States returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.

ISSUE NO. 2

The bracelet is not the usual container for the suntan lotion. It has a substantial, material and valuable use other than holding suntan lotion. The bracelet container is classifiable under item 740.41, TSUS, as jewelry and other objects of personal adornment, valued over 20 cents per dozen pieces or parts: other, at a duty rate of 11 percent ad valorem.

The Harmonized Tariff Schedule of the United States Annotated (HTSUSA) became effective on January 1, 1989. Under the HTSUSA the suntan lotion returns free of duty under subheading 9801.00.10, as a product of the United States returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. Under General Rule of Interpretation (GRI) 3(b), HTSUSA, the bracelet filled with suntan lotion is a composite good and classified by the component which gives the merchandise its essential character. The essential character is imparted by the suntan lotion which is free of duty under subheading 9801.00.10, HTSUSA. Therefore, the entire suntan lotion bracelet is entered free of duty.

Sincerely,

John Durant, Director

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