HQ 0954616 - Decision on application for further review of Protest No. 3501-93-100110, filed March 18, 1993; Beauty and the Beast cake decoration figures in heading 9503 as other toys; Not 3926 articles of plastics; Not 9505 festive, carnival or other entertainment articles; GRI 3(b) set for retail sale - United States International Trade Commision Rulings

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HQ 954616

May 10, 1994

CLA-2 CO:R:C:F 954616 LPF

CATEGORY: CLASSIFICATION

TARIFF NO.: 9503.49.0020

District Director
U.S. Customs Service
110 South 4th Street - Rm 154
Minneapolis, MN 55401

RE: Decision on application for further review of Protest No. 3501-93-100110, filed March 18, 1993; Beauty and the Beast cake decoration figures in heading 9503 as other toys; Not 3926 articles of plastics; Not 9505 festive, carnival or other entertainment articles; GRI 3(b) set for retail sale

Dear Sir:

This is a decision on a protest filed March 18, 1993 against your decision in the classification of merchandise liquidated on December 18, 1992. Protest No. 3501-93-100110 serves as the lead protest for protest nos. 3501-93-100111 through 3501-93-100114.

FACTS:

The merchandise at issue in this protest, manufactured in China, consists of items intended to be sold to the bakery industry as cake decorations. However, the sample submitted of the two piece assortment depicting Beauty and the Beast (Item #404122) reveals that the figures are composed of polyvinyl chloride (PVC) and are of sufficient quality to be retained by a child and subsequently used for display and/or amusement. On March 29, 1994 we had the opportunity to meet with Mr. Murphy, the President of DecoPac, and counsel. This meeting, as well as counsel's submission of March 30, 1994, provided us with further detail regarding the condition and packaging of the merchandise when imported and sold to the bakeries.

It is our understanding that the two individually wrapped figures, each in a clear, poly bag, are placed inside another clear, poly bag which is heat sealed. The product is imported in grosses (144 sets per package) pre-packaged as sets in food-grade poly bags. Once imported, the gross shipments are packaged six to a box for resale to DecoPac's customers. The articles remain in the sealed poly bag when placed in the six unit, exterior box which itself is designed to facilitate the sale and shipment of
the sets. An instruction sheet for decorating the cake, as required by DecoPac's license agreements, and a sheet with six peel and stick warning labels, as required by the Consumer Product Safety Commission, are included within the exterior box.

Once the box of six sets of the merchandise arrives at the bakery, the baker will decorate and ice the cake consistent with DecoPac's instructions, but, in most cases, will not position the decorations on the cake. Rather, the retail consumer will purchase a decorated cake in a domed box with the pvc cake decorations still in the same food-grade poly bag attached to or enclosed with the cake box. The sale of the decorated cake in this manner eliminates the likelihood that the decorations will shift or tip in transit and mar the iced cake prior to the birthday celebration.

The protestant entered the merchandise under subheading 9505.90.60, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as festive, carnival or other entertainment articles, other, other at a duty rate of 3.1 percent ad valorem.

You maintain that the merchandise is classified under subheading 9502.10.40, HTSUSA, as dolls representing only human beings, other (than stuffed) at a duty rate of 12 percent ad valorem and subheading 9503.49.0020, HTSUSA, as other toys, toys representing animals or non-human creatures, other (than stuffed) at a duty rate of 6.8 percent ad valorem.

The protestant submits that if the figures are not classified in subheading 9505.90.60, HTSUSA, they are classified, alternatively, in subheading 3926.40.00, HTSUSA, as other articles of plastics, statuettes and other ornamental articles.

ISSUE:

Whether the figures are classified within heading 9505 as festive, carnival or other entertainment articles; 9502 as dolls representing only human beings; 9503 as other toys; or 3926 as other articles of plastics; and whether the figures qualify as sets put up for retail sale.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRIs) taken in their appropriate order provide a framework for classification of merchandise under the HTSUS. 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 GRIs may then be applied.

The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs.

Heading 9505 provides for, inter alia, festive, carnival and other entertainment articles. The ENs 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:

(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, flags) which are traditionally associated with a particular festival are also classified here.

(2) Articles traditionally used at Christmas festivities, e.g., artificial Christmas trees (these are sometimes of the folding type), nativity scenes, Christmas crackers, Christmas stockings, imitation yule logs....

The figures do not meet the criteria for festive articles, because they are not traditionally associated or used with a particular festival. Customs has maintained that, generally, figurines and dolls are not traditionally associated or used with a particular festival. They are not ejusdem generis with those articles cited in the ENs to 9505 as exemplars of traditional, festive articles. See Headquarters Ruling Letters (HRLs) 952821, issued March 3, 1993, and 952981, issued March 18, 1993.

However, we note that EN (A)(1) to 9505 indicates that cake decorations are classified within heading 9505. Based on the information submitted, including an examination of the samples as well as the catalog illustrating the products, we do not believe that the merchandise qualifies as cake decorations provided for in the EN. Cake decorations, in contrast to the subject articles, generally are made of extremely cheap, non-durable material and are disposed of once the cake is eaten. In contrast, these articles although marketed as cake decorations, are unique insofar as they are of sufficient quality to be retained by a child, perhaps for play. In fact, DecoPac advertises and markets numerous articles as cake decorations, including Barbie and troll dolls and plastic
picture frames, which do not fit the description of "cake decorations." Accordingly, these figures are not classifiable within heading 9505.

Additional headings to be considered in this case are 9502 which provides for dolls representing human beings and 9503 which provides for other toys. The EN to 9502 state that "the heading includes not only dolls designed for the amusement of children, but also dolls intended for decorative purposes (e.g., boudoir dolls, mascot dolls), or for use in Punch and Judy or marionette shows, or those of a caricature type...."

The ENs to Chapter 95 indicate that "this chapter covers toys of all kinds whether designed for the amusement of children or adults." It is Customs position that the amusement requirement means that toys should be designed and used principally for amusement. See Additional U.S. Rule of Interpretation 1(a), HTSUSA. Customs defines principal use as that use which exceeds each other single use of the article.

As the figures are of sufficient quality to be retained by a child and be used principally for amusement, throughout the year, either as a doll or toy, we disagree with the protestant's position that the figures are exclusively for use as cake decorations and have no function or utility in non-celebratory occasions. Accordingly, the figures are classifiable within headings 9502 and 9503.

The protestant submits, alternatively, that the merchandise is properly classified within heading 3926 as other articles of plastics as opposed to dolls or toys within heading 9502 or 9503. In HRLs 088895, issued March 22, 1993, 085164, issued October 18, 1990, and 082001, issued February 13, 1990, Customs addressed the distinction between figures classified as dolls or toys and plastic statuettes. In those decisions figures depicting Peanuts cartoon characters and representing players from the National Basketball Association (NBA), the National Football League (NFL), and Major League Baseball (MLB) were classified within heading 9502 as dolls.

Customs maintained in those rulings that in accordance with prior judicial decisions, the term "doll" was to be interpreted broadly and that the classification of articles as dolls depends on the various circumstances and factors in each individual case. We reiterate that the ENs provide not only for amusing type dolls, but also for decorative or collectable type dolls such as those at issue. In HRL 085164, supra, Customs stated that although figures may be depicted in a set pose and affixed to a base or a stand, this does not change classification of such articles from dolls to other articles of plastic. The subject figures are not classifiable within heading 3926.

This position is consistent not only with the rulings discussed above, but also with the following decisions where the figures were classified as dolls or toys: HRL 953473, issued September 15, 1993, Aladdin and Wizard figures; HRL 952981, issued March 18, 1993, wooden boys and girls dressed in plaid; New York Ruling Letter (NYRL) 841282, issued May 25, 1989, plastic railway workers; NYRL 855794, issued September 24, 1990, plastic comic book characters; and NYRL 833463, issued December 15, 1988, plastic Ronald McDonald.

On the contrary, counsel notes that in NYRL 842873, issued July 19, 1989, a plastic rabbit figure was classified within heading 3926. In this regard, we reiterate that classification depends on the various circumstances and factors in each individual case. It appears that the subject article in NYRL 842873 was not designed and used principally for amusement as a toy, but instead resembled a plastic figurine or statuette.

Counsel submits that because the items qualify as a set put up for retail sale, the headings should be regarded as equally specific, requiring classification by the item which gives the set its essential character. In accordance with EN X to GRI 3(b), "goods put up in sets for retail sale" means goods which:

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

(b) consist of 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 apparent that the merchandise at issue a) consists of two different articles classifiable in different headings, e.g., headings 9502 and 9503 and b) consists of articles put up together to meet a particular need or carry out a specific activity, e.g., to uniquely decorate a cake by conveying the theme from the Disney film, "Beauty and the Beast." Our primary focus and concern is with the third criterion, e.g., whether the merchandise is put up in a manner suitable for sale directly to users without repacking.

Although the merchandise is sold wholesale to bakeries and not sold directly to the retail consumer, it still is put up in a manner suitable for sale directly to users. For instance, in HRL 083968, issued July 6, 1989, fuel line repair kits distributed through Volkswagen of America, Inc. to Audi dealers for their use in connection with a fuel system modification recall campaign were found to qualify as sets put up for retail sale. The kits were
not sold at retail, but instead were delivered to Audi dealers who would install the components on recalled cars without charge to the owners. Similarly, we recognize that the instant scenario is unique insofar as the merchandise will not be sold to the ultimate consumer in the usual sense (i.e., off the shelf of a supermarket or novelty/party store), but will only be made available to the ultimate consumer when he or she purchases the decorated cake from the bakery.

In addition, although the pre-packaged figures are combined with the cake decorating instruction sheets and peel and stick warning labels, the merchandise does not fail the third set criterion. In HRL 955105, issued December 10, 1993, we considered whether a storage battery and a battery charger, both designed to power a footwarmer, would qualify as a set put up for retail sale. It was determined that when the storage battery and battery charger were suitable for sale and distribution to consumers as imported, it would qualify as a set. However, if the storage battery and battery charger were imported for packing with other necessary, additional components, another packing step would be needed prior to sale and the merchandise would not qualify as a set. Similarly, in this case, the fact that the figures are suitable for sale to the bakeries when imported "but for" the exclusion of the instruction sheets and warning labels, does not indicate that the merchandise itself is unsuitable for sale directly to users without repacking. The Beauty and the Beast figures necessary for cake decorating both are present at the time of importation.

As the merchandise meets the criteria for sets put up for retail sale, the headings (9502 and 9503) providing for each figure refer to only part of the items comprising the set. Since the headings are regarded as equally specific, we do not classify the product by GRI 3(a) but rather by GRI 3(b).

GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the component which gives them their essential character. "Essential character" is the attribute which strongly marks or serves to distinguish what a good is. EN VIII to GRI 3(b) explains that bulk, quantity, weight, value or the role of a constituent material in relation to the use of the product are indicia of essential character. Because both figures contribute coequally to the bulk, quantity, weight, value, and use of the good, neither imparts essential character.

Accordingly, GRI 3(c) explains that a good which cannot be classified by reference to 3(a) or 3(b) is classified under the heading which occurs last in numerical order among those which equally merit consideration. The merchandise, therefore, is classifiable within heading 9503, the provision which occurs last
as between headings 9502 and 9503. The appropriate subheading is 9503.49.0020.

HOLDING:

The Beauty and the Beast figures qualify as a set put up for retail sale and are classified in subheading 9503.49.0020, HTSUSA, as "Other toys...: Toys representing animals or non-human creatures...: Other, Toys not having a spring mechanism: Other." The applicable rate of duty is 6.8 percent ad valorem.

You are instructed to deny the protest, except to the extent reclassification of the merchandise as indicated above results in a net duty reduction and a partial allowance.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS, and to the public via the Diskette Subscription Service, Lexis, the Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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