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HQ 957322




March 6, 1995

CLA-2 CO:R:C:M 957322 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7323.99.90; 7326.90.90

District Director
U.S. Customs Service
200 St. Paul Place
Room: 28th Floor
Baltimore, MD 21202

RE: Protest 1303-93-100261; waste basket and tissue holder; other table, kitchen or other household articles of iron or steel, not coated or plated with precious metal; other articles of iron or steel; EN 73.23; commingling; General Note 5, HTSUS; 19 CFR ?152.13

Dear District Director:

This is in regards to Protest 1303-93-100261 concerning the tariff classification of a waste basket and tissue holder set under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise under consideration is described by the protestant as "a waste basket and tissue holder set with flower design made of brass plated steel," product number IBS18327. The waste basket and tissue holder were entered on August 24, 1993, under subheading 7323.99.90, HTSUS, as other table, kitchen or other household articles of iron or steel, not coated or plated with precious metal. On September 24, 1993, Customs issued a "Notice of Action " (Customs Form (CF) 29) informing the protestant that a rate advance had been taken. The CF 29 stated that:

WASTE BASKETS AND TISSUE HOLDERS SHALL BE CLASSIFIED UNDER 7326.90.9090 WITH A DUTY RATE OF 5.7% AD VALOREM.

The entry of the waste basket and tissue holder was liquidated on October 8, 1993, under subheading 7326.90.90, HTSUS, as other articles of iron or steel. The waste basket and tissue holder were both classified under subheading 7326.90.90, HTSUS, pursuant to the commingling of goods provision in General Note 5, HTSUS.

In a protest timely filed on November 20, 1993, the protestant agrees that the waste basket is excluded from classification under subheading 7323.99.90, HTSUS. The protestant contends that the waste basket and tissue holder are not a set and should be classified separately. Therefore, the protestant states that the tissue holder should be classified under subheading 7323.99.90, HTSUS, as other table, kitchen or other household articles of iron or steel, not coated or plated with precious metal, and the waste basket should be classified under subheading 7326.90.90, HTSUS.

The competing subheadings are as follows:

7323.99.90 Table, kitchen or other household articles and parts thereof, of iron or steel; iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel...Other...Other...Not coated or plated with precious metal...Other...Other

7326.90.90 Other articles of iron or steel...Other...Other...Other...Other....

ISSUE:

1. Are the waste basket and tissue holder classified under subheading 7323.99.90, HTSUS, as other table, kitchen or other household articles of iron or steel, not coated or plated with precious metal, or under subheading 7326.90.90, HTSUS, as other articles of iron or steel?

2. Are the waste basket and tissue holder commingled goods pursuant to General Note 5, 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...."

In this case the protestant and Customs agree that the waste basket and tissue holder are not classified as a set pursuant to GRI 3(b), HTSUS. Therefore, classification of the articles must be made pursuant to GRI 1, HTSUS.

In understanding the language of the HTSUS, 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 73.23 (pgs. 1035-1036), state that:

This group comprises a wide range of iron or steel articles, not more specifically covered by other headings of the Nomenclature, used for table, kitchen or other household purposes; it includes the same goods for use in hotels, restaurants, boarding-houses, hospitals, canteens, barracks, etc...

The heading excludes:...

(c) Waste paper baskets (heading 73.25 or 73.26 as the case may be)...(emphasis in original).

We are of the opinion that the tissue holder is of the class or kind of articles classified under subheading 7323.99.90, HTSUS. However, pursuant to EN 73.23, the waste basket is specifically excluded from classification under heading 7323, HTSUS. The waste basket is classified under subheading 7326.90.90, HTSUS, as other articles of iron or steel.

General Note 5, HTSUS, provides for commingled goods, and states:

(a) Whenever goods subject to different rates of duty are so packed together or mingled that the quantity or value of each class of goods cannot be readily ascertained by customs officers (without physical segregation of the shipment or the contents of any entire package thereof), by one or more of the following means:

(i) sampling,

(ii) verification of packing lists or other documents filed at the time of entry, or

(iii) evidence showing performance of commercial settlement tests generally accepted in the trade and filed in such time and manner as may be prescribed by regulations of the Secretary of the Treasury,
the commingled goods shall be subject to the highest rate of duty applicable to any part thereof unless the consignee or his agent segregates the goods pursuant to subparagraph (b) hereof.

(b) Every segregation of goods made pursuant to this note shall be accomplished by the consignee or his agent at the risk and expense of the consignee within 30 days (unless the Secretary authorized in writing a longer time) after the date of personal delivery or mailing, by such employee as the Secretary of the Treasury shall designate, of written notice to the consignee that the goods are commingled and that the quantity or value of each class of goods cannot be readily ascertained by customs officers. Every such segregation shall be accomplished under customs supervision, and the compensation and expenses of the supervising customs officers shall be reimbursed to the Government by the consignee under such regulations as the Secretary of the Treasury may prescribe....

?152.13, Customs Regulations (19 CFR ?152.13), sets for the provisions concerning commingling of merchandise. 19 CFR ?152.13 states:

(a) Notice to importer. The district director shall give written notice to the importer as promptly as possible after any commingling is discovered.

(b) Highest rate applicable. Commingled merchandise shall be assessed with duty at the highest rate or rates applicable to any one kind of merchandise included in the commingling, unless:

(1) The quantity and value of each of the kinds so included can be readily ascertained by the usual method of Customs examination or by one or more of the methods specified in General Note 5, HTSUS (19 U.S.C. 1202), or

(2) The conditions specified in General Note 5(b), (c), or (d), HTSUS, are satisfied.

(c) Time limit. To obtain the benefit of General Note 5(a)(iii), (b), (c), or (d), HTSUS, the importer shall, within 30 days after the date of mailing or personal delivery of the notice provided for in paragraph (a) of this section, take appropriate action as follows:

(1) File with the district director evidence showing performance of the commercial settlement tests specified in General Note 5(a)(iii), HTSUS; or

(2) Perform the segregation under Customs supervision as specified in General Note 5(b)), HTSUS; or

(3) File with the district director documentary proof which will satisfy him that the merchandise is entitled to the lower rate of duty under General Note 5(c) or (d), HTSUS....

Based on the information before this office, the waste basket and tissue holder appear to be commingled goods. They are goods subject to different rates of duty and are packed together or mingled so that the quantity or value of each class of goods could not be readily ascertained by Customs personnel. However, pursuant to 19 CFR ?152.13, it appears that the protestant was not appropriately notified of this commingling issue. We note that the protestant was issued a "Notice of Action " detailing the rate advance to subheading 7326.90.9090, HTSUS, but the explanation for the rate advance did not include a reference to commingled goods or a cite to General Note 5, HTSUS. Therefore, the protestant was not given the opportunity to address the commingling issue for this merchandise.

The protestant should be given the opportunity to address the commingling issue pursuant to General Note 5, HTSUS, and the regulations set forth in 19 CFR ?152.13. If the protestant does not meet the exceptions to commingling as set forth in General Note 5, HTSUS, or 19 CFR goods dutiable at the highest rate of duty applicable to any part. In this case, the waste basket and tissue holder would be subject to the rate of duty under subheading 7326.90.90, HTSUS.

HOLDING:

The tissue holder is classified under subheading 7323.99.90, HTSUS, as other table, kitchen or other household articles of iron or steel, not coated or plated with precious metal.

The waste basket is classified under subheading 7326.90.90, HTSUS, as other articles of iron or steel.

The protestant should be given the opportunity to address the commingling issue pursuant to General Note 5, HTSUS, and the regulations set forth in 19 CFR ?152.13. If the protestant does not meet the exceptions to commingling as set forth in General Note 5, HTSUS, or 19 CFR goods dutiable at the highest rate of duty applicable to any part. In this case, the waste basket and tissue holder would be subject to the rate of duty under subheading 7326.90.90, HTSUS.

Pursuant to the above instructions, the protest should be GRANTED. 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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