HQ 956926 - Protest 1001-93-108755; semi-precious stone jewelry; finished articles of jewelry; graded, temporarily strung stones; EN 71.16; HRL 086375 and HRL 086104 - United States International Trade Commision Rulings

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HQ 956926

October 3, 1994

CLA-2 CO:R:C:M 956926 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7116.20.10; 7116.20.20

Regional Commissioner
United States Customs Service c/o Protest and Control Section
6 World Trade Center, Room 761
New York, New York 10048-0945

RE: Protest 1001-93-108755; semi-precious stone jewelry; finished articles of jewelry; graded, temporarily strung stones; EN 71.16; HRL 086375 and HRL 086104

Dear Regional Commissioner:

This is in response to Protest 1001-93-108755, which pertains to the tariff classification of semi-precious stone jewelry under the Harmonized Tariff Schedule of the Unites States (HTSUS). Samples were submitted for our examination and are being returned as requested.

FACTS:

The semi-precious stone jewelry consists of the following:

1. Invoice from Hing Yip Gem Co., Ltd.:
Yellow Bead Bangle 8" (samples submitted) Turquoise Rondell 10-16mm (sample submitted) Turquoise Dog Bone Nugget 8x10mm (sample submitted)

2. Invoice from Po Shing Jewellery Co. Ltd.: Malachite Chips A 36" (sample submitted)
Malachite Chips B 36"
Malachite + Lapis Chips 36"

3. Invoice from Fai Po Gem Manufacturing Co., Ltd.: Crystal Chips 36" B (sample submitted)
Amethyst Chips 36" AB (sample submitted)
Amethyst Chips 36" A

The entry of the above described jewelry was liquidated on October 15, 1993, under subheading 7116.20.20, HTSUS, as other semiprecious stones. Customs classification is based on the conclusion that the jewelry at issue is temporarily strung semiprecious stones.

In a protest timely filed on December 14, 1993, the protestant contends that the semiprecious stone jewelry articles are finished jewelry articles and, therefore, are properly classified under subheading 7116.20.10, HTSUS, as articles of semiprecious jewelry. In support of its contention that the semiprecious stones are finished jewelry articles, the protestant has submitted a letter from South Pacific Wholesale Co. which states that "...the 36 and 32 inch 'endless' chips are and always have been an item of finished jewelry. They slip right over the wearer's head...There are innumerable retail catalogues selling the 36 inch chips as finished jewelry...." A retail catalogue depicting various stone necklaces was also submitted.

The competing subheadings are as follows:

7116.20 Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed)...Of precious or semiprecious stones (natural, synthetic or reconstructed)....

7116.20.10 Articles of jewelry.

7116.20.20 Other...Of semiprecious stones (except rock crystal).

ISSUE:

Is the semiprecious stone jewelry classified under subheading 7116.20.10, HTSUS, as articles of semiprecious jewelry, or under subheading 7116.20.20, HTSUS, as other semiprecious stones.

LAW AND ANALYSIS:

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...."

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 the HTSUS. See, T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

EN 71.16 (pgs. 963-964), states that heading 7116, HTSUS, "...covers all articles (other than those excluded by Notes 2(b) and 3 to this Chapter), wholly of natural or cultured pearls, precious or semi-precious stones, or consisting partly of natural or cultured pearls or precious or semi-precious stones, but not containing precious metals or metal clad with precious metal...(emphasis in original)." EN 71.16 (A) states:

It includes pearls or stones graded according to size, quality, shade, etc., and constituting an article ready for use as jewellery. But the heading excludes ungraded pearls or stones merely temporarily strung for facility of transport without any setting or fitting of metal or other material; these fall in heading 71.01, 71.03 or 71.04 (see Explanatory Notes to headings 71.01 to 71.03) (emphasis in original).

Based on EN 71.16, heading 7116, HTSUS, includes finished articles of semiprecious jewelry, and graded, temporarily strung semiprecious stones. See also, Headquarters Ruling Letter (HRL) 086375 dated May 23, 1990, and HRL 086104 dated December 14, 1989. The issue to be determined is whether the jewelry at issue is finished articles of jewelry or temporarily strung stones.

In support of its contention that the semiprecious stones are finished jewelry articles, the protestant has submitted a letter from South Pacific Wholesale Co. which states that "...the 36 and 32 inch 'endless' chips are and always have been an item of finished jewelry. They slip right over the wearer's head...There are innumerable retail catalogues selling the 36 inch chips as finished jewelry...." A retail catalogue depicting various stone necklaces was also submitted.

We agree that the Crystal Chips 36" B, Amethyst Chips 36" AB, and Amethyst Chips 36" A from Fai Po Gem Manufacturing Co., Ltd. are finished jewelry articles. The submitted catalogues and the 36" length of the subject jewelry indicates that the necklaces can be easily slipped over the head and, therefore, worn in the condition as imported. The major distinction between these articles and the remaining semiprecious stones is the manner in which the stones are strung. The crystal chips are strung on white thread and the amethyst chips are strung on a purple thread. The knots holding the stings together appear invisible unless closely inspected. The thread also allows for the free-forming look which is common for this type of stone jewelry. Therefore, we are of the opinion that the Crystal Chips

36" B, Amethyst Chips 36" AB, and Amethyst Chips 36" A are classified under subheading 7116.20.10, HTSUS, as articles of semiprecious jewelry.

However, we are of the opinion that the Yellow Bead Bangle 8", Turquoise Rondell 10-16mm and Turquoise Dog Bone Nugget 8x10mm from Hing Yip Gem Co., Ltd., and the Malachite Chips A 36", Malachite Chips B 36" and Malachite + Lapis Chips 36" from Po Shing Jewellery Co. Ltd. are temporarily strung. We note that the 36" lengths are capable of being slipped over the head. However, a visual examination of the samples shows that the graded stones and Malachite chips are strung on nylon thread which contains visible knots or, in the case of beads, on elastic thread.

Nylon thread is not normally used for finished stone jewelry because it is not durable and does not allow for a free-forming look. Moreover, the stone strands contain visible knots, and in some pieces more than a single knot which could be hidden under a blouse or behind the neck. Knots make the strand of stones unappealing and may cause discomfort when worn because they stick out from the stone strand. Unlike the above described thread, the nylon thread does not allow for the free-forming look. Additionally, elastic thread is not normally used for finished stone jewelry. When worn in this condition the stones easily separate revealing the red elastic thread underneath. Therefore, we are of the opinion that these semiprecious stones are not finished articles of jewelry, but are temporarily strung stones. Therefore, they are classified under subheading 7116.20.20, HTSUS, as other semiprecious stones.

HOLDING:

The Crystal Chips 36" B, Amethyst Chips 36" AB, and Amethyst Chips 36" A from Fai Po Gem Manufacturing Co., Ltd. are finished jewelry articles classified under subheading 7116.20.10, HTSUS, as articles of semiprecious jewelry.

The semiprecious stone jewelry, Yellow Bead Bangle 8", Turquoise Rondell 10-16mm and Turquoise Dog Bone Nugget 8x10mm from Hing Yip Gem Co., Ltd., and the Malachite Chips A 36", Malachite Chips B 36" and Malachite + Lapis Chips 36" from Po Shing Jewellery Co. Ltd., are temporally strung semiprecious stones and, therefore, is classified under subheading 7116.20.20, HTSUS, as other semiprecious stones.

The protest should be GRANTED in part and DENIED in part as described above. 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 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 the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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