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HQ 954579




October 6, 1993

CLA-2 CO:R:C:F 954579 ALS

CATEGORY: CLASSIFICATION

Tariff NO.: 2208.30.3030; 2208.30.6065; 2208.20.4000

Mr. John B. Pellegrini
Ross and Hardies
65 East 55th Street
New York, New York 10022-3219

RE: Alcoholic Beverages Packaged with Two Drinking Glasses in a Gift Box

Dear Mr. Pellegrini:

This is reference to your letter of June 21, 1993, concerning the classification of gift sets composed of a bottle of spirits and 2 glasses in a box.

FACTS:

The subject merchandise consists of gift sets of spirits packaged with 2 glasses. Each set will contain a 750 ml bottle of one of 5 different types of spirits packaged with 2 glasses in a gift box. The spirit components of each gift set will consist of one of two types of scotch, one of two types of cognac or a type of Canadian whisky. The value of each bottle of spirits is considerably greater than the value of the two glasses in each set, representing 75 percent or more of the total value of each set. All the spirits and glasses are imported and will be entered into a foreign trade zone where the various spirits and glasses will be packaged in gift boxes and withdrawn as sets. The importer will not seek privileged foreign status for any of the above components. Although the inquiry does not provide any particulars as to the gift box used for packaging, we understand it will be an inexpensive cardboard type container and that it will not be reusable.

ISSUE:

Are the above components separately classifiable or are they classifiable as sets?

LAW AND ANALYSIS:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI's) taken in order. GRI 1 provides that the classification is determined first in accordance with the terms of the headings and any relative section and chapter notes. If GRI 1 fails to classify the goods and if the heading and legal notes do not otherwise require, the remaining GRI's are applied, taken in order.

In considering the classification of the above spirits and drinking glasses we note that the spirits are classifiable in one of 3 subheadings of Chapter 22 of the HTSUSA and that the glasses would be classifiable in Chapter 70, HTSUSA. For the purposes of classification we presume that, while the nature and origin of the packaging are unknown, it would meet the requirements of GRI 5 and would be dutiable with its contents rather than being separately dutiable. We also note that all the merchandise will be nonprivileged foreign merchandise and will be, pursuant to section 146.65(a)(2), Customs Regulations (19 CFR 146.65(a)(2)), subject to duty in its condition and quantity when transferred from the foreign trade zone to the customs territory of the United States.

Since there is no specific heading that refers to all the components of the sets and since each of the subheadings refers to only a part of the set, we referred to GRI 3 which, pursuant to GRI 2, provides that goods classifiable under 2 or more headings shall be classified according to the provisions of GRI 3. Although GRI 3(a) provides that the heading with the most specific description shall be preferred to other headings, when 2 or more headings refer to a part only of the materials or substances contained in mixed or composite goods, the headings are to be considered as equally specific. We found that to be the case with this article so it could not be classified under that GRI.

We next referred to GRI 3(b) which covers mixtures, composite goods consisting of different materials or made up of different components and goods put up in sets for retail sale - 3 -
which cannot be classified by reference to GRI 3(a). In considering whether the subject articles are sets for retail sale in accord with GRI 3(b), we evaluated the articles against the specified requirements which a product must meet to qualify for classification thereunder. The articles must:

(a) consist of at least 2 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) be put up in a manner suitable for sale directly to users without repacking.

We believe that the articles under consideration meet all those requirements. The individual components of the sets will clearly be packaged for sale at retail, they are composed of at least 2 different articles classifiable in different headings, and the contents of each set will permit the purchaser thereof to imbibe an alcoholic beverage.

In considering which of the components give the sets their essential character we noted that the factor which determines essential character will vary as between different kinds of goods. It may, for example, 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 goods. Since the alcoholic beverages form 75 percent or more of the value of each set and since the retail purchaser of the set would clearly purchase the set for its alcoholic beverage content, we believe the spirits form the essential character of the set and should serve as the basis for classification thereof.

HOLDING:

A gift set, packaged in a foreign trade zone and composed of a bottle of spirits and 2 glasses in an inexpensive and non- reusable gift box, is dutiable in its condition as withdrawn from such zone. Such sets are classifiable in the subheading applicable to the spirit component of each set. The sets composed of scotch whisky and 2 glasses are classifiable in subheading 2208.30.3030, HTSUSA, and are subject to a general rate of duty of 5.3 cent per proof liter. The sets composed of - 4 -
cognac, valued over $3.43 a liter, and 2 glasses are classifiable in subheading 2208.20.4000, HTSUSA, and are subject to a general rate of duty of 13.2 cents per proof liter. The sets composed of Canadian whisky and 2 glasses are classifiable in subheading 2208.30.6065, HTSUSA, and are subject to a general rate of duty of 6.6 cents per proof liter. All the sets may be subject to Federal Excise Tax.

Sincerely,

John Durant, Director
Commercial Rulings Division

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