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HQ 088146


February 26, 1991

CLA-2 CO:R:C:T 088146 KWM

CATEGORY: CLASSIFICATION

TARIFF NO.: 6304.91.00

Ms. Karen J. Hiatt
Regional Director of Customs
Commercial Operations Division, Pacific Region United States Customs Service
One World Trade Center, Suite 534
Long Beach, California 90831-0700

RE: Protest number 2904-90-000083, decorative tissue box covers; Festive articles; Use provision; Toys; Made-up textiles articles.

Dear Ms. Hiatt:

This is in regard to the Application for Further Review of protest number 2904- 90-000083, received July 18. 1990 by U.S. Customs in Portland, Oregon. We hold that the protest should be denied for the following reasons.

FACTS:

The merchandise at issue is referred to as stuffed Santa Claus/Christmas Bear tissue box covers. They consist of stuffed figures in the shape of either Santa Claus or a Christmas Bear on top of a chimney. The chimney is supported by placing it over a tissue box. The tissues may be drawn through a hole in the back of the cover. When assembled, the chimney stands approximately 6 inches tall, and the stuffed figure approximately 6 inches tall. The Christmas Bear figure also has attached a tag printed "To" and "From" similar to that of an ordinary gift tag. Counsel for the importer further states that both items will be sold through retail outlets during the Christmas selling season.

At the time of entry, Importer claimed classification under subheading 9503.41.10, HTSUSA, which provides for stuffed toys. The port of entry in a Notice of Action (Customs Form (CF) 29) dated December 12, 1989, classified the goods in subheading 6304.91.00, HTSUSA, as a made up article, knitted or crocheted, and subjected the goods to a rate advance. The port's classification also required that a visa for textile category 666 be obtained for the goods.

Counsel for the importer alludes to a request for internal advice which was denied by the port. However, the file contains little documentation to that effect. This protest was filed on July 18, 1990. The documentation submitted in support of the protest asserts that the merchandise was properly classified in subheading 9503.41.10/9902.95.02, HTSUSA, or in the alternative under the provisions of subheading 9905.10.50, HTSUSA, as festive articles. The Protest was forwarded to Headquarters for further review based on the provisions of 174.26 of the Customs Regulations (CR).

ISSUES:

Are the goods at issue classified as stuffed toys under the provisions of 9503.41.10, HTSUSA?

If not, are they considered festive articles as provided for in subheading 9505.10.50?

If neither of the asserted subheadings is applicable, where should the merchandise be classified in the HTSUSA?

LAW AND ANALYSIS:

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI's). The systematic detail of the harmonized system is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relevant 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 otherwise require, the remaining GRI's may be applied, taken in order.

Heading 9503, HTSUSA

Importer asserts first that both articles should be classified under subheading 9503.41.10, HTSUSA, as other toys, specifically stuffed toys representing non-humans. Initially we note that under the importer's analysis, the Santa Claus figure may be more correctly classified under provisions for dolls, since the Santa Claus figure is considered to be representative of a human. We do not pursue this analysis because we do not consider either of the toys provisions (9502 or 9503, HTSUSA) to be applicable here.

The HTSUSA headings which classify toys provide for a class of merchandise whose principal use is that of amusement, for either children or adults (See, Explanatory Notes to chapter 95, HTSUSA, and the exemplars provided). Additional U.S. Rule of Interpretation 1(a) states that:

1. In the absence of special language or context which otherwise requires:

(a) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind, to which the imported goods belong, and the controlling use is the principal use;

Principal use is that which exceeds any other single use of the article. Counsel states that "The stuffed Santa/Bear's only have one purpose, that of providing entertainment or amusement value to children. * * * Children will derive significant play value from either article." We do not agree. These articles neither impart a significant play value to children or adults, nor are they designed or principally used for such amusement. These articles are simple novelty items incorporating a seasonal motif. The principal use of the goods is as a novelty item or a decorative furnishing article for the home. That is the use which exceeds any other single use. There is no requirement that the goods have a utilitarian function. Lastly, to be considered "other toys" the goods must possess some similarity, must be ejusdem generis, to the exemplars of the heading. These goods are not sufficiently similar to be considered "other toys."

Heading 9505, HTSUSA

Heading 9505, HTSUSA, provides for, inter alia:

Festive, carnival, or other entertainment articles, including magic tricks and practical joke articles; parts and accessories:

The Explanatory Notes, which are the official interpretation of the nomenclature at the international level, guide Customs in understanding the scope of the heading terms. The explanatory notes to heading 9505, HTSUSA provide that the heading covers:

(A) Festive, carnival, or other entertainment articles which in view of their intended use are generally made of non-durable material. they include:

(1) Decorations such as festoons, garlands, Chinese lanterns, etc., as well as various decorative articles made of paper, metal foil, glass fibre, etc., for Christmas trees (e.g., tinsel, stars, icicles), artificial snow, coloured balls, bells, lanterns, etc. Cake and other decorations (e.g., animals and flags) which are traditionally associated with a particular festival are also classified here.

Articles classifiable in heading 9505, HTSUSA tend to have no function other than decoration.
Heading 9505, HTSUSA, is generally regarded as a use provision. Additional U.S. Rule of Interpretation 1(a) mandates that for tariff classifications governed by use the controlling use is the principal use (see above). Goods of heading 9505, HTSUSA, belong to a class or kind of merchandise whose principal use is festive. As stated above, the instant merchandise is a novelty item. We do not believe that its principal use is festive, nor is it of the class or kind of goods whose principal use is festive. Consequently, the Santa/Bear figures are not classifiable in heading 9505, HTSUSA.

Counsel for the importer cites several past rulings issued by Customs which classify articles under the festive article provisions. Binding rulings are issued by the Customs Service "with respect to the particular transaction or issue described therein." 19 C.F.R. 177.9(c) prescribes that ". . . [N]o other person should rely on the ruling letter or assume that the principles of that ruling will be applied in connection with any transaction other than the one described in the letter." However, if the conditions of 19 C.F.R. 177.9 are met, the principles of a prior ruling may influence later decisions. They are not considered binding. Several of the rulings cited by counsel have been or will be modified or revoked (HRL 083168 (pending) modifying NYRL 832645; and HRL 085888 revoking 083353). Of those rulings which have not been modified or revoked, our examination indicates that the transactions involved and the conditions on which those rulings were based serve to distinguish them from the transaction in this case. In short, we do not find them persuasive, and they do not impact on our decision here.

Heading 6304, HTSUSA

Heading 6304, HTSUSA, provides for other furnishing articles of textile material, knitted or crocheted. The instant items, if not classifiable elsewhere, are classified in heading 6304, HTSUSA.

Delayed Effectiveness of Customs' Ruling

In a letter to this office dated November 30, 1990, counsel for the importer requested a delayed effective date for classification of the Santa/Bear figures, "consistent with 19 C.F.R. 177.9(e). Counsel asserts that Customs has changed its position regarding the classification of festive articles. However, none of the submissions made in support of the protest and further review provide us with sufficient grounds for delaying the effective date of our ruling. Subsection (e)(2) of 177 C.F.R. states, in pertinent pert:

. . . an affected party must demonstrate to the satisfaction of the Customs Service that the treatment previously accorded by Customs to the substantially identical transactions was sufficiently consistent and continuous that such party reasonably relied thereon in arranging for future transactions. . . The evidence of reliance shall include contracts, purchase orders, or other materials tending to establish that the future transactions were arranged based on the treatment previously accorded by the Customs Service.

The HTSUSA went into effect on January 1, 1989 and represents an entirely new and distinct tariff scheme. It was anticipated that a period of adjustment would be required after the nomenclature's enactment. We consider Customs' treatment of festive articles to represent a clarification of our position with regard to the provisions of heading 9505, HTSUSA. However, if counsel for the importer elects to submit the documentation and background material required to substantiate a delayed effective date for the decision, we will entertain such a submission. Any proprietary information provided may remain confidential at the request of the submitting party. At this time, the request for delay should be denied.

Request for Internal Advice

As noted, we find little documentation regarding the Request for Internal Advice to which counsel for the importer refers. Since our holding here resolves any questions concerning the subject entry, we consider the Internal Advice Request to have become moot.

HOLDING:

The protest should be denied. The merchandise at issue, described as Santa Claus/Christmas Bear tissue box covers, and used as articles of household furnishing, are classified in subheading 6304.91.0040, HTSUSA. We find that it is neither a stuffed toy of headings 9502 or 9503, HTSUSA, nor a festive article of heading 9505, HTSUSA. The applicable rate of duty is 11.5 percent ad valorem. Textile category 666 applies to goods of this heading for visa purposes.

A copy of this ruling should accompany the Notice of Action (CF 19) sent to the importer informing them of our decision.

Sincerely,

John A. Durant
Director
Commercial Rulings Division

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