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HQ 957202




January 25, 1995

CLA-2 CO:R:C:M 957202 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7113.19.29; 7113.19.50

District Director
U.S. Customs Service
555 Battery Street
San Francisco, CA 94111

RE: PRD 2809-94-100606; Gold necklaces; Gold earrings; GRI 1, 2(b),

Dear District Director:

The following is our decision regarding Protest 2809-94-100606 concerning your action in classifying and assessing duty on gold necklaces and gold earrings under the Harmonized Tariff Schedule of the United States (HTSUS). Protestant has provided packaging samples, dealer letters, pictures of the jewelry on display, as well as a felt board for our examination.

FACTS:

The subject articles are described as various pieces of 24 carat handcrafted gold necklaces and earrings. According to protestant, the motifs of individual necklaces match the motif of individual pairs of earrings, thus creating "sets" of jewelry.

According to Customs inspectors, the earrings and necklaces were imported "just all mixed together in one box". An importer's premises visitor report indicated that protestant "showed us examples of the necklace sets which were allegedly in the identical condition in which they were imported. The sets consisted of gold necklaces and matching gold earrings with simulated colored stones, each wrapped in cotton packing material covered with tissue paper. The jewelry we examined was packaged differently than the parcels which Customs inspectors viewed on prior shipments."

Pictures, samples and dealer letters indicate that one pair of earrings and one necklace are displayed together on a felt board. Additionally, dealer letters indicate that the necklaces and earrings are sold together.

All of the jewelry was entered under subheading 7113.19.29, HTSUS, which provides for necklaces of precious metal because the importer believed the necklaces and earrings met the tariff requirements for sets put up for retail sale. However, the necklaces were classified upon liquidation under subheading 7113.19.29, HTSUS, as necklaces and the earrings were classified under subheading 7112.19.50, HTSUS, which provides for other articles of jewelry made of precious metal. A protest was timely filed on May 5, 1994, for all but 5 of the subject entries.

Protests against decisions of the appropriate Customs officers must be in conformity with applicable statutory and regulatory requirements. The statute, 19 U.S.C. 1514(c)(2) provides, in pertinent part, that a protest shall be filed "within ninety days after but not before notice of liquidation... (emphasis added)." The time period for filing a protest is clearly stated in section 174.12(e), Customs Regulations (19 CFR 174.12(e)), which reads, in pertinent part, as follows:

(e) Time of filing.

Protests shall be filed, in accordance with section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514), within 90 days after either:

(1) The date of notice of liquidation or reliquidation in accordance with sections 159.9 or 159.10 of this chapter....

Pursuant to 19 U.S.C. 1514(c)(2) and 19 CFR 174.12(e), the following entries were not timely protested within 90 days from the date of notice of liquidation.

ENTRY LIQUIDATED
2801-M14-0024071 12/10/93
2801-M14-0024072 12/27/93
2801-M14-0024144 12/27/93
2801-M14-0024975 07/08/94
2801-M14-0025068 07/29/94

The first three entries were protested after the 90 day period had lapsed. The last two entries were protested two months before they were liquidated. Therefore, as this protest for the above entries is not timely filed, it must be denied.

ISSUE:

Are the necklaces and earrings classifiable as a set put up for retail sale under the HTSUS?

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 the terms of the headings and any relative section or chapter notes. Chapter 71, HTSUS, provides for natural or cultured pearls, precious or semiprecious stones, precious metals, metal clad with precious metal, and articles thereof; imitation jewelry; coin.

Heading 7113, HTSUS, provides for articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal.

The subheadings under consideration are:

7113.19.29 articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal: of other precious metal, whether or not plated or clad with precious metal: other: necklaces and neck chains, of gold: other

7113.19.50 articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal: of other precious metal, whether or not plated or clad with precious metal: other: other

GRI 6, HTSUS, provides that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires. Inasmuch as the subject articles may be a set, they are described in both of these subheadings, and therefore, cannot be classified according to GRI 1.

When goods cannot be classified by applying GRI 1, and if the headings, subheadings and legal notes do not otherwise require, the remaining GRI's are applied.

GRI 2(b) states, in pertinent part, that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. The classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3.

GRI 3 states that when, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

Because each of these subheadings refers to only part of the items in a possible set put up for retail sale, the subheadings are considered equally specific and GRI 3(b) must be applied.

GRI 3(b), HTSUS, 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" the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System (HCDCS) may be utilized. 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).

The ENs, although not dispositive, are to be looked to for the proper interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

The subject merchandise consists of two different articles, necklaces and earrings, which are classified under different subheadings. Protestant has not provided evidence that persuades us that the necklaces and earrings are, at the time of importation, sets put up for retail sale.

Protestant provided no independent evidence that the box displayed during the importer premises visit was in its original condition as imported, or that the Customs inspector's assertion that the jewelry was "all mixed together in a box" was incorrect. Additionally, none of the dealer letters indicate how the jewelry is packaged when received by dealers. Moreover, the dealer's actions of placing the articles on felt boards indicate that at the time of importation, the articles are not suitable for sale directly to users without repackaging. Because neither the Customs inspector nor protestant indicated that the articles were imported on felt boards, the articles are considered repackaged, and therefore, are not suitable for sale directly to users without repackaging. The necklaces and earrings do not qualify as sets and are classified separately as necklaces and earrings.

HOLDING:

The protest should be DENIED. The necklaces are classifiable under subheading 7113.19.29, HTSUS, as gold necklaces. The earrings are classifiable under subheading 7113.19.50, HTSUS, as other jewelry of precious metal.

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 this decision must be accomplished prior to the mailing of the decision. Sixty days from the date of this 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, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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