HQ 956347 - Decorative crystal candle holders; candle; gift box; EN 94.05; candlestick; candleholder; candlestick holder; HRL 953016, 088742 and 089054; GRI 3(b); set; essential character; EN Rule 3(b); 3406.00.00; GRI 5(b); packing material; GSP; 19 U.S. C. 2463(b); BDC; eligible article; product of; T.D. 91-7; Madison Galleries, LTD. v. United States - United States International Trade Commision Rulings

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HQ 956347

August 30, 1994

CLA-2 CO:R:C:M 956347 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 3406.00.00; 9405.50.40

David M. Murphy, Esq.
Grunfeld, Desiderio, Lebowitz & Silverman 245 Park Avenue
New York, New York 10167-0002

RE: Decorative crystal candle holders; candle; gift box; EN 94.05; candlestick; candleholder; candlestick holder; HRL 953016, 088742 and 089054; GRI 3(b); set; essential character; EN Rule 3(b); 3406.00.00; GRI 5(b); packing material; GSP; 19 U.S. C. 2463(b); BDC; eligible article; product of; T.D. 91-7; Madison Galleries, LTD. v. United States

Dear Mr. Murphy:

This is in regards to your letter dated April 29, 1994, on behalf of Crystal Clear Industries, Inc., concerning the applicability of the Generalized System of Preferences (GSP) and tariff classification of decorative crystal candle holders under the Harmonized Tariff Schedule of the United States (HTSUS). A sample of the candle holder and several printed gift boxes were submitted for our examination.

FACTS:

The articles under consideration are globe-shaped crystal candle holders (glass candle holders). A decorative pattern is cut in the glass which is designed to enhance the patterns created by the flickering candle. You state that the glass candle holder is produced in Poland. The submitted sample, style # 415143-GB, is 3 inches tall, labeled "Essex Votive, Handcut 24% Full Lead Crystal", and is valued at $2.60. It is representative of similar items imported by Crystal Clear. The glass candle holders may be imported in other sizes and with different decorative patterns cut in the glass. The glass candle holders are not used for devotional purposes.

Your information indicates that the glass candle holders may be imported packaged in a cardboard gift box without a candle. The gift boxes, valued at $0.51, are products of Italy. However, some of the candles may be packaged in plain brown boxes from Poland. Additionally, a Taiwanese candle, valued at $0.09, may be added to the glass candle holders before importation into the U.S.

In the U.S., a majority of the glass candle holders will be repackaged into a gift box with a brass stand and a candle. A sample gift box with a representative photograph of the candle holder, candle and brass stand was submitted.

ISSUE:

I. Is the glass candle holder with and without candles packaged in a gift box or brown box classified as non-electrical lamps and lighting fittings under subheading 9405.50.40, HTSUS?

II. Does the glass candle holder with candle qualify for preferential tariff treatment under the GSP?

LAW AND ANALYSIS:

I. Tariff Classification

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall be determined according to terms of the headings and any relative section or chapter notes...."

Subheading 9405.50.40, HTSUS, provides for:

Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included...Non-electrical lamps and lighting fittings...Other...Other.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System (HCDCS) Explanatory Notes (ENs) may be consulted. The ENs, although not dispositive, provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See, T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). EN 94.05 (pg. 1581), states that lamps and light fittings of this group can be composed of any material and use any source of light, including candles. In addition, EN 94.05(I)(6) states that this heading covers "...in particular candelabra, candlesticks, and candle brackets."

We are of the opinion that the terms "candlestick", "candlestick holder", and "candleholder" are interchangeable. Candleholder has been defined as a candlestick, Webster's II New Riverside University Dictionary, pg. 224 (1st ed. 1984), and as a holder for a candle; candlestick, The Random House Dictionary of the English Language, pg. 216 (1st Ed. 1983). Candlestick has been defined as a utensil for supporting a candle, whether elaborately made or in the common form of a saucer with a socket in the center, Webster's New International Dictionary , pg. 390 (2d ed. 1939). Reference to lexicographic authorities is proper when determining the meaning of a tariff term. Hasbro Industries, Inc. v. United States, 703 F. Supp. 941 (CIT 1988), aff'd, 879 F.2d 838 (1989); C.J. Tower & Sons of Buffalo, Inc. v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).

We have previously held that empty glass candle holders are classified under subheading 9405.50.40, HTSUS, as non-electrical lamps and lamp fittings. See, HRL 953016 dated April 27, 1993, HRL 088742 dated April 22, 1991, and HRL 089054 dated August 2, 1991, which classified glass candle holders as non-electrical lamps and light fittings under subheading 9405.50.40, HTSUS, pursuant to EN 94.05.

Based on the above definitions and rulings, we find that the glass candle holders without candles are, in fact, candlesticks as the term is used in the ENs. The articles at issue are a utensil used for supporting a candle. Therefore, the glass candle holders are properly classified under subheading 9405.50.40, HTSUS, as non-electrical lamps and light fittings.

The glass candle holder with accompanying candles are classified under two different tariff provisions. The glass candle holder is classified under heading 9405, HTSUS, and the candle is classified under heading 3406, HTSUS. When, by application of GRI 2, HTSUS, goods are prima facie classifiable under two or more headings, GRI 3, HTSUS, is applicable. In this case, classification is determined by application of GRI 3(b), HTSUS, which provides:

Mixtures, 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.

To determine what is a "set put up for retail sale", EN Rule 3(b)(X) (pg. 4), provides a three-part test for "goods put up in sets for retail sale":

For the purposes 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 facia, 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 repackaging (e.g., in boxes or cases or on boards).

As stated previously, the candle holder and candle are classified under different headings. When combined the components are put up together to meet a particular need or carry out a specific activity; to provide decorative illumination. However, based on the submitted information, it is unclear as to how the candle holder and candle will be packaged. If the articles are packaged together for sale directly to the consumer in either the gift box or brown box without repackaging with the brass stand, they meet the qualifications of a set. However, if the candle holder and candle will be repackaged in the U.S. with the metal stand, they do not meet the qualifications of a set. Therefore, the candle holder and candle which will not be repackaged with the brass stand are a set for tariff purposes. To determine the proper classification, the essential character of the set needs to 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, EN Rule 3(b) (pg. 4), provides further factors which help 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.

We are of the opinion that the essential character of the set is imparted by the glass candle holder. The glass candle holder is the central piece and the focus of the set. It is the component which attracts the consumer and is, actually, the component which the consumer is purchasing. The glass candle holder is valued much higher ($2.60) than the candle ($0.09). The candle when burned will eventually disappear and the consumer will purchase a replacement. Therefore, the glass candle holder and candle set is classified under subheading 9405.50.40, HTSUS.

Classification of the candleholder and candle which is not a set is different from the above set classification. The candle holder and candle must be classified separately under their respective headings. EN 94.05, states that heading 9405, HTSUS, does not include candles of heading 3406, HTSUS. Therefore, the candle holder will be classified under subheading 9405.50.40, HTSUS, and the candle will be classified under subheading 3406.00.00, HTSUS, which provides for "Candles, tapers and the like."

We note that GRI 5(b), states that "[i]n addition to the foregoing provision, the following rules shall apply in respect of the goods referred to therein:...

Subject to the provision of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

Based upon an examination of the submitted gift box sample and a description of the brown box, we are of the opinion that the boxes are packing materials which are to be classified with the entered goods. The boxes are of the type in which a consumer normally finds glass articles packaged and are clearly not designed for repetitive use. Therefore, the boxes are classified with the glass candle holders under subheading 9405.50.40, HTSUS.

II. Generalized System of Preferences

Under the GSP, eligible articles the growth, product or manufacture of a beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of 1) the cost or value of materials produced in the BDC, plus 2) the direct costs of the processing operation in the BDC, is equivalent to at least 35% of the appraised value of the article at the time of entry. See, 19 U.S.C. 2463(b).

The candle holder and candle set in this case is an "eligible article" for purposes of the GSP since the tariff provision under which the set is classified provides for a GSP free rate of duty.

Section 503(b) of the Trade Act of 1974 (19 U.S.C. 2463(b)), amended by the "Customs and Trade Act of 1990" (Public Law 101-382), effective August 20, 1990, now reads as follows:

(b)(1) The duty-free treatment provided under section 501 shall apply to any eligible article which is the growth, product or manufacture of a BDC.

The "product of" requirement means that to receive duty-free treatment the article must be wholly the growth, product, or manufacture of the BDC, or must be a new or different article of commerce which has been grown, produced or manufactured in the BDC. See, Madison Galleries, LTD. v. United States, 688 F. Supp. 1544, (CIT 1988), affirmed, 870 F.2d 627 (Fed. Cir. 1989).

In regards to the instant case, you state that the candle holder is produced in Poland (a BDC) and that the candle is produced in Taiwan (a non-BDC). Because the mere packaging of the candle with the candle holder in Poland will not result in the substantial transformation of the candle into a "product of" Poland, the entire imported set would not be considered the "product of" Poland. See, T.D. 91-7, 25 Cust. Bull. 7 (1991). Therefore, the candle holder and candle set will not be entitled to GSP treatment.

HOLDING:

The glass candle holders imported without candles packaged in gift or brown boxes, and the glass candle holder and candle sets are classified under subheading 9405.50.40, HTSUS, as non-electrical lamps and lighting fittings.

The glass candle holders and candles which do not qualify as sets are classified separately under subheading 9405.50.40, HTSUS, as non-electrical lamps and lighting fittings, and under subheading 3406.00.00, HTSUS, as candles.

The glass candle holder and candle sets are not entitled to GSP treatment.

Sincerely,

John Durant, Director
Commercial Rulings Division

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