HQ 0952560 - Boat Patch Kit; Set; GRI 3(b); Explanatory Note 3(b)(X); T.D. 91-7; Superscope, Inc. v. U.S.; Country of Origin Marking; 19 U.S.C. 1304; 19 CFR 134.1(b); 19 CFR 134.32(d); 19 CFR 134.32(m) - 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 > 1993 HQ Rulings > HQ 0952552 - HQ 0952621 > HQ 0952560

HQ 952560
October 20, 1992

CLA-2 CO:R:C:M 952560 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8205.60.00; 9801.00.10

Mr. Norm Seegert
Norman G. Jensen, Inc.
P.O. Box 227
Ranier, MN 56668

RE: Boat Patch Kit; Set; GRI 3(b); Explanatory Note 3(b)(X); T.D. 91-7; Superscope, Inc. v. U.S.; Country of Origin Marking; 19 U.S.C. 1304; 19 CFR 134.1(b); 19 CFR 134.32(d); 19 CFR 134.32(m)

Dear Mr. Seegert:

This is in response to your letter of August 3, 1992, on behalf of Northland Marketing, Inc., concerning the classification and country of origin marking of boat patch kits under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of boat patch kits, used in the repairing and waterproofing of rivets and cracks in aluminum boats. The kit is comprised of a self-contained butane gas operated torch, a hand-held, plastic handled, steel wire brush measuring approximately seven inches, and two glue sticks. The brush and the glue sticks are products of the U.S., exported to Canada for repackaging with the butane torch in a blister pack, and subsequently exported back to the U.S. as a kit. The butane torch is a product of Taiwan, exported to Canada for repackaging.

ISSUE:

Whether the boat patch kit is classifiable as a set under the HTSUS? Whether the U.S.-origin articles are entitled to duty free treatment under subheading 9801.00.10, HTSUS? How are country of origin marking requirements applied to sets?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRI's 2 through 6.

GRI 3 must be considered in the classification of merchandise put up in sets for retail sale. GRI 3(b) provides that:

[m]ixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

In understanding the language of GRI 3(b), the Harmonized Commodity Description and Coding System (HCDCS) Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. Explanatory Note 3(b)(X) (p. 4), HTSUS, provides that "[f]or the purpose of this Rule, the term 'goods put up in sets for retail sale' shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings . . .;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards)."

It is our position that the subject boat patch kit is a set for classification purposes. It fully satisfies all three requirements of Explanatory Note 3(b)(X), HTSUS.

Because the boat patch kit is a set, its essential character must be determined. In general, essential character has been construed to mean the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core, or condition of the article. In addition, Explanatory Note VIII to GRI 3(b) provides further factors which determine the essential character of goods. Factors such as bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods are to be utilized, though the importance of certain factors will vary between different kinds of goods. HCDCS, Vol. 1, p. 4.

We find that the essential character of the kit is the butane torch. It is the key component in relation to the use of the kit. The brush and glue sticks are replaced when they are worn down. The torch, however, is not meant to be replaceable, as is evidenced by the fact that it is refillable. Therefore, the kit is classifiable under subheading 8205.60.00, HTSUS, which provides for: "[b]low torches and similar self-contained torches, and parts thereof."

Subheading 9801.00.10, HTSUS, provides for: "[p]roducts of the United States when 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." Articles classifiable under that subheading receive duty free treatment.

In T.D. 91-7, dated January 8, 1991, it was stated that "[t]he 'conditions and requirements' of subheading 9801.00.10, HTSUS are (1) that the article be a product of the U.S.; and (2) that it not be advanced in value or improved in condition by any means while abroad."

In Superscope, Inc. v. U.S., 13 CIT ___, 727 F.Supp. 629 (1989), the court held that certain glass panels of U.S. origin that were exported, repacked abroad with certain foreign components, and returned to the U.S. as part of unassembled audio cabinets, were entitled to duty free treatment under item 800.00, Tariff Schedules of the United States (TSUS) (now subheading 9801.00.10 (HTSUS). This was based on the fact that the U.S. panel portion of the imported article was "not 'advanced in value or improved in condition . . . while abroad,' but [was] merely repacked." id. at 631. See HQ 556355.

It is our position that the brush and the glue sticks meet the requirements of subheading 9801.00.10, HTSUS, and are therefore classifiable therein. They are products of the U.S., and, under Superscope, they are not "advanced in value or improved in condition by any means" while in Canada. Consequently, the brush and the glue sticks are classifiable under subheading 9801.00.10, HTSUS.

As to the country of origin marking issue concerning sets, Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Section 134.1(b), Customs Regulations [19 CFR 134.1(b)], defines "country of origin" as the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of marking laws and regulations.

It is stated in section 134.32(d) and (m), Customs Regulations [19 CFR 134.32(d) and (m)], that:

[t]he articles described or meeting the specified conditions set forth below are excepted from marking requirements:

(d) Articles for which the marking of the containers will reasonably indicate the origin of the articles. . .

(m) Products of the United States exported and returned.

Under 19 CFR 134.32(m), the brush and the glue sticks, all products of the U.S., do not need to be marked individually, nor does their country of origin need to be marked on the container. However, under 19 CFR 134.32(d), the country of origin of the torch, which is Taiwan, needs to be marked on the container reasonably indicating the origin of the article.

HOLDING:

The boat patch kit is a set under GRI 3(b), and therefore is classifiable under subheading 8205.60.00, HTSUS, which provides for: "[b]low torches and similar self-contained torches, and parts thereof." The general, column one rate of duty is 5.7 percent ad valorem.

However, the U.S.-origin articles of the kit are classifiable under 9801.00.10.00, HTSUS, which provides for: "[p]roducts of the United States when 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." Articles classifiable under that subheading receive duty free treatment provided that the documentation required by 19 CFR 10.1 is satisfied.

Under 19 CFR 134.32(m), the brush and the glue sticks, all products of the U.S., do not need to be marked individually, nor does their country of origin need to be marked on the container. However, under 19 CFR 134.32(d), the country of origin of the torch, which is Taiwan, needs to be marked on the container reasonably indicating the origin of the article.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: