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HQ 953159


July 19, 1993

CLA-2 CO:R:C:F 953159 LPF

CATEGORY: CLASSIFICATION

TARIFF NOS.: 3923.21.0090, 3923.29.0000, 9504.90.9080, 9505.90.4000, 9505.90.6010

Mr. Bernard D. Liberati
Morris Friedman & Co.
320 Walnut St.
Philadelphia, PA 19106-3883

RE: Reconsideration of NYRL's 832556, issued October 26, 1988, 836965, issued March 2, 1989, and 876442, issued August 12, 1992; Party hats, blowouts, noisemakers and banners in 9505, HTSUSA, as festive, carnival or other entertainment articles; Ball puzzles and party game in 9504, HTSUSA, as articles for arcade, table or parlor games; Plastic loot bags in 3923, HTSUSA, as articles for the conveyance or packing of goods, of plastic; GRI 3(b) set for retail sale

Dear Mr. Liberati:

This is in response to your letter dated September 2, 1992, submitted on behalf of Unique Industries, Inc., requesting reconsideration of New York Ruling Letters (NYRL's) 832556, issued October 26, 1988, and 836965, issued March 2, 1989. You brought these letters to our attention upon receiving NYRL 876442, issued August 12, 1992. We have reviewed these rulings and have found them to be partially in error. The correct classification is as follows.

FACTS:

The articles at issue in NYRL 832556 are party hats (Item #1081) and party blowouts (Item #1083) made of cardboard and including the words "Disney's" and "Duck Tales." It is our understanding that the articles are packaged separately. Both articles were classified in 9505.90.4000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as festive, carnival or other entertainment articles, other, confetti, paper spirals or streamers, party favors and noisemakers.

The merchandise at issue in NYRL 836965 is a "Circus Clown Accessory Pak" (Style # 1878) containing 4 paper party hats, 4 plastic and paper noisemakers and 4 plastic loot bags all packaged together. These articles were considered a retail set and were classified in 9505.90.4000, HTSUSA, as festive, carnival or other entertainment articles, other, confetti, paper spirals or streamers, party favors and noisemakers.

The merchandise at issue in NYRL 876442 is a "Garfield Party for 8" (Item #13409). It includes 8 paper party hats, 8 blowouts, 1 plastic "Happy Birthday" banner, 8 ball puzzles, 1 party game (similar to "Pin the Tail on the Donkey") and 8 plastic loot bags. All of the articles are packaged together in a poly bag with a cardboard header. These articles were classified under the HTSUSA as follows:

1. paper party hats in 9505.90.6000 as festive, carnival or other entertainment articles, other, other;

2. blowouts and plastic banner in 9505.90.4000 as festive, carnival or other entertainment articles, other, confetti, paper spirals or streamers, party favors and noisemakers;

3. ball puzzles and party game in 9504.90.9080 as articles for arcade, table or parlor games, other, other, other; and

4. plastic loot bags within 3923 as plastic articles for the conveyance or packing of goods.

ISSUE:

Whether paper or cardboard party hats are classifiable in 9505.90.40 as confetti, paper spirals or streamers, party favors and noisemakers or in 9505.90.60 as other entertainment articles.

Whether the articles are classifiable as sets for retail sale or are classifiable under the various headings providing for each of its individual components.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) taken in their appropriate order provide a framework for classification of merchandise under the HTSUSA. Most imported goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative 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 then be applied. The Explanatory Notes (EN's) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI's.

In regard to the party hats and party blowouts of NYRL 832556, supra, heading 9505, HTSUSA, provides for, inter alia, festive, carnival and other entertainment articles. The EN's to 9505 indicate 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:...

(3) Articles of fancy dress, e.g., masks, false ears and noses, wigs, false beards and moustaches (not being articles of postiche - heading 67.04), and paper hats. However, the heading excludes fancy dress of textile materials, of Chapter 61 or 62.

(4) Throw-balls of paper or cotton-wool, paper streamers (carnival type), cardboard trumpets, "blow- outs", confetti, carnival umbrellas, etc (emphasis added).

Pursuant to GRI 1, the terms of the heading and the EN's indicate that the party hats and blowouts, which are non-durable, are classifiable within 9505 as entertainment articles. We note that these articles do not meet the criteria for festive articles. See, inter alia, Headquarters Ruling Letter 952833, issued February 6, 1993.

At the subheading level 9505.90.40 provides for confetti, paper spirals or streamers, party favors and noisemakers, while 9505.90.60 provides for other festive, carnival or entertainment articles. It is our position that the language in the subheadings and EN's indicates that the blowouts fit the description of the non-durable entertainment or party-type articles classifiable in the former subheading. The party hats fall within the latter provision which apparently includes fancy dress, hats, and other similar articles which, although non- durable, may be worn.

In regard to NYRL's 836965 and 876442, supra, each party kit consists of various components which are classifiable as follows: the party hats, blowouts, noisemakers and plastic banner in 9505, the ball puzzles and party game in 9504, and the plastic loot bags in 3923. Since separate HTSUSA headings provide for each item, the articles are classified by applying GRI 3(a) which explains, in pertinent part, that merchandise which is classifiable under two or more headings is classified under the heading which provides the most specific description of the article. However, all such headings are regarded as equally specific when each refers to only part of the items in a set put up for retail sale.

In accordance with EN X to GRI 3(b), a set put up for retail sale must: (a) contain at least two items classifiable in different headings; (b) contain items put up together to meet a particular need or carry out a specific activity; and (c) be put up for sale directly to users without repacking.

Both party kits contain at least two items classifiable in different headings and are ready for direct sale without repacking. In regard to the party kit of NYRL 836965, the party hats, noisemakers and plastic loot bags apparently are put up together to carry out the specific activity of celebrating a birthday party. Although the loot bag may be used once the party is over to carry gifts, food, or other goodies home, it also is used during the celebration to collect or trade "loot." The articles are used and sold together enabling party-goers to celebrate a birthday. These loot bags, in contrast to shopping bags or sacks which are used repetitively, are primarily used with articles received at a party.

Because this party kit is a set, and the headings under which the items could be classified refer to only part of the items in the set, we turn to GRI 3(b) to classify the merchandise. This provides that the set is classified by the item which gives the set its essential character. "Essential character" is the attribute which strongly marks or serves to distinguish what an article, or set, is. EN VIII to GRI 3(b) explains that essential character may be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the article.

None of the items appears to represent a significant amount of the bulk, weight or value of the party kit. Furthermore, based on use, no one item imparts essential character; rather all the items function coequally to create the party kit.

Accordingly, GRI 3(c) explains that goods which cannot be classified by reference to 3(a) or 3(b) are classified under the heading which occurs last in numerical order among those which equally merit consideration. The merchandise, therefore, is classifiable within heading 9505, as festive, carnival or other entertainment articles, the provision which occurs last in numerical order. Pursuant to GRI 6, the applicable subheading, which occurs last in numerical order, is 9505.90.60.

In regard to the party kit of NYRL 876442, the party hats, banner, party game, ball puzzles, and loot bags are not necessarily put together for a specific activity, but rather serve divergent functions or needs. While most of the items are used to celebrate a birthday party, it is not apparent that the
ball puzzles are used in this manner. Instead the ball puzzles primarily function as games, providing enjoyment long after the party. The merchandise fails as a set, and we return to GRI 1 to classify each item separately in its own appropriate heading.

HOLDING:

Party hats and blowouts (NYRL 832556):

1. Party hats 9505.90.6010- Festive, carnival or other entertainment articles,
Other: Other, Hats: Of paper, foil or plastics, dutiable at 3.1 percent ad valorem.

2. Party blowouts 9505.90.4000- Festive, carnival or other entertainment articles,
Other: Confetti, paper spirals or streamers, party favors and noisemakers, dutiable at 4 percent ad valorem.

Circus Clown Accessory Pack (NYRL 836965):

9505.90.6010- Festive, carnival or other entertainment articles,
Other: Other, Hats: Of paper, foil or plastics, dutiable at 3.1 percent ad valorem.

Garfield Party for 8 (NYRL 876442):

1. Party hats 9505.90.6010- Festive, carnival or other entertainment articles,
Other: Other, Hats: Of paper, foil or plastics, dutiable at 3.1 percent ad valorem.

2. Party blowouts and 9505.90.4000- Festive, carnival or plastic banner other entertainment articles, Other: Confetti, paper spirals or streamers, party favors and noisemakers, dutiable at 4 percent ad valorem.

3. Ball puzzles 9504.90.9080- Articles for arcade, and party game table or parlor games...Other: Other: Other, Other, dutiable at
4.64 percent ad valorem.

4. Loot bags 3923.21.0090 (if composed of polymers of ethylene)- Articles for the conveyance or packing of goods, of plastics...Sacks and bags: Of polymers of ethylene, Other: Other, dutiable at 3 percent ad valorem, or

3923.29.0000 (if composed of polymers other than ethylene)-
Articles for the conveyance or packing of goods, of plastics
...Sacks and bags: Of other plastics, dutiable at 3 percent ad valorem.

NYRL's 832556 and 836965 are modified accordingly. NYRL 876442 is hereby affirmed.

Sincerely,

John Durant, Director
Commercial Rulings Division

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