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HQ 952372


January 19, 1993

CLA-2 CO:R:C:T 952372 ch

CATEGORY: CLASSIFICATION

TARIFF NO.: 4907.00.0000; 9704.00.0000

Morgan Okada
M. Bowers & Co., Inc.
521 Ala Moana Boulevard
#210
Honolulu, HI 96813

RE: Classification of unused newly printed postage stamps from the Republic of China (Taiwan); 4907.00.0000; 9704.00.0000.

Dear Mr. Okada:

This is in regard to your letter dated July 17, 1992, requesting tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), for unused printed postage stamps from Taiwan. Samples were provided to this office and will be returned under separate cover.

FACTS:

The subject merchandise are unused printed Chinese postage stamps from Taiwan. These items are invalid for use as postage in the United States. The stamps will be imported for sale in Honolulu, Hawaii.

ISSUE:

What is the proper classification for unused Chinese postage stamps imported into the United States?

LAW AND ANALYSIS:

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes. Where goods cannot be classified on the basis of GRI 1, the remaining GRI will be applied in order.

Heading 4907, HTSUSA, provides, inter alia, for "unused postage, revenue or similar stamps of current or new issue in the country to which they are destined."

Chapter 49, note 1(d), states:

This chapter does not cover...postage or revenue stamps...of heading 9704.

Heading 9704 appears in section XXI, HTSUSA, which covers "Works of Art, Collectors' Pieces and Antiques." It provides, inter alia, for "postage or revenue stamps...if unused not of current or new issue in the country to which they are destined." (Emphasis added).

Chapter 97, note 1(a), states:

This chapter does not cover unused postage or revenue stamps...of current or new issue in the country to which they are destined.

The above quoted provisions make it clear that headings 4907 and 9704 are mutually exclusive. Heading 4907 is appropriate for unused postage of "current or new issue in the country to which they are destined." On the other hand, heading 9704 covers unused postage not of "current or new issue in the country to which they are destined."

The meaning of the phrase "current or new issue in the country to which they are destined" hinges upon the definition of the term "destined." In Webster's II New Riverside University Dictionary (1984), the word "destination" is defined as follows:

1. The place or point to which one is going or something is directed.

When unused stamps are imported into this country, they are "destined," or directed to, the United States. Hence, we may substitute the "United States" for the words "country to which they are destined." This substitution transforms the phrase "current or new issue in the country to which they are destined," to "current or new issue" in the United States.

The term "current or new issue" indicates that the unused stamps must be currently valid as postage "in the country to which they are destined"; ie., the United States. It follows that when stamps are imported into this country they are classifiable under heading 4907 if they are unused United States stamps valid as postage in the United States. On the other hand, heading 9704 is applicable for unused stamps that are not valid as postage in the United States; i.e. unused foreign postage or unused United States stamps that are not of "current or new issue" in the United States.

This conclusion creates a rational classification system under the HTSUSA. Only United States stamps of current or new issue are valid as postage for any correspondence originating in the United States. These stamps are classified under heading 4907.

On the other hand, unused foreign postage is invalid for payment of postage in the United States, as are unused United States stamps not of current issue. As a practical matter, they are of value only to stamp collectors, and are properly classified under heading 9704, which falls in the section of the HTSUSA encompassing collectors' pieces.

It has been suggested that the words "country to which they are destined," used in headings 4907 and 9704, should be construed in a different fashion; i.e. that the "destiny" of an unused stamp of new or current issue is the country in which they can be used as valid postage. Under this construction all unused current or new postage would be classifiable under heading 4907. For example, unused French, German and United States stamps would be classified under heading 4907. The only unused postage classifiable under 9704 would be those that are not new or current issue; i.e. invalid unused stamps. We disagree for several reasons.

First, the suggested interpretation contradicts the plain language of headings 4907 and 9704. If the authors of the subject headings had intended the alternative construction, they would have drafted heading 4907 to encompass all unused postage of current or new issue, and drafted heading 9704 to cover all unused stamps not of current or new issue. Instead, they added the words "in the country to which they [the unused stamps] are destined" in both headings. As explicated above, the term "destination" has an accepted meaning different from the suggested construction.

Second, the suggested interpretation is at odds with the terms of Section XXI, which purports to encompass collectors' pieces. As noted above, unused foreign postage imported into the United States is of primary interest to stamp collectors, as it has no practical use as postage. The effect of the proposed construction would be to remove these collectibles out of the appropriate section of the tariff schedule and place them in heading 4907.

Finally, we recognize that it may be rare for heading 4907 to be of use in the United States, as most stamps in this country are manufactured domestically. However, the Harmonized System is an international agreement and its terms are binding among the contracting parties. In those countries where stamps are not manufactured internally they must be imported from other nations. In this situation the use of heading 4907 will be extensive. Although the distinctions drawn in this ruling between headings 4907 and 9704 may not be administratively convenient in the United States, we are of the opinion that they reflect the intent of the authors of the Harmonized System. In this case, administrative convenience must yield to uniformity of interpretation between member nations of the HTS.

Based on the foregoing, we conclude that only unused United States stamps of current or new issue are classifiable under heading 4907. Unused foreign postage, or unused United States postage not of current or new issue, will be classified under heading 9704.

HOLDING:

The subject merchandise is classifiable under subheading 9704.00.0000, HTSUSA, which provides for postage stamps, unused, not of current or new issue in the country to which they are destined. This classification is free of duty at this time.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact the local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director

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