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HQ 958099




March 18, 1995

CLA-2 RR:TC:FC 958099 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.10.0000; 9803.00.50

Mr. Peter Jan Baskin
Attorney at Law
Sharretts, Paley, Carter & Blauvelt, P.C. 67 Broad St.
New York, NY 10004

RE: Plastic Containers Known as P-Boxes

Dear Mr. Baskin:

This is reference to your inquiry as to the classification and valuation of the subject containers as well as their eligibility for duty-free treatment pursuant to the provisions of subheading 9803.00.50, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The articles under consideration are described as trapezoidal shaped containers of various sizes molded of plastic material. The sample submitted with the ruling request, which represents the smallest of such containers, measures approximately 59 cm long by 39 cm wide by 17 cm high. Each side of the box tapers in slightly from top to bottom. A carry handle is molded into the brim on each of the 2 ends of the box and 2 indentations along each side of the brim accommodate tab closures on the lid of the box which can be locked to the box. The company's name is molded into both the lid and the box.

The articles are manufactured in Sweden and France. They are specially designed to transport plastic toy bricks and shapes and are used to transport those items between the manufacturer and its affiliates. We have been advised that these containers, loaded with the referenced loose toy parts, will normally arrive - 2 -
in the United States during the latter half of the month prior to the month in which they will be used to produce various toy packages. A bar code label on the exterior of each box identifies its contents. The contents of the average box is used within 2 to 3 weeks after its arrival at the importer's premises although some boxes may remained unused for as long a 1 1/2 months. A box is completely emptied when ready for use, i.e., the contents are not withdrawn in a piecemeal fashion. Occasionally a box may be used to store domestically procured items. When the contents of the boxes are empty after their contents are used, they are returned to the overseas source for refilling. This is a re-occurring process with full P-boxes arriving in the United States and empty ones being sent back to Europe to be refilled.

ISSUE:

What is the classification of the instant articles? Are they eligible for special tariff treatment subsequent to their initial duty-paid arrival?

LAW AND ANALYSIS:

Classification of merchandise under the 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 headings and legal notes do not otherwise require, the remaining GRI's are applied, taken in order.

In considering their classification we noted that the instant plastic boxes serve multiple functions. They are used for intracompany transport and storage of plastic toy bricks and shapes produced by the manufacturer, an affiliate of the importer. We noted that the sample P-box has the company name molded into its sides and lid, indicating that it was dedicated to uses of the manufacturer and/or its affiliates. Counsel confirmed that the boxes are not sold or otherwise made available to retail customers.

Since the P-boxes serve both a transportation and storage function, it is necessary to ascertain which of those functions is the primary function. Based on discussions with counsel and the importer, it appears that the P-boxes may be used for storage purposes at European locations, particularly at locations where shipments destined for other locations are sorted and consolidated for shipment. However, pursuant to Additional U.S. Rule of Interpretation 1(a), a tariff classification controlled - 3 -
by use (other than actual use) is to be determined in accordance with the use in the United States...of the class or kind to which the imported goods belong, and the controlling use is the principal use.

In this regard, we note that the scenario of use of these containers in the United States, as indicated by the importer, is that the P-boxes are used for both transportation and storage. The importer has advised us that an average box arrives at their facility during the last half of the month prior to the planned use of its contents and that such box is emptied within 2 to 3 weeks after arrival. The importer further indicates that in the normal course of production planning, no box should remain unused (full) for more than 1 1/2 months. When emptied the boxes are completely emptied and not in a piecemeal fashion. Subsequent to the emptying, the boxes are consolidated for shipment, in their empty condition, to their European affiliates, for refilling.

The importer has advised us that some of the boxes may be occasionally used for storage of products which are domestically sourced in the United States but that is an infrequent occurrence. We believe that this should be considered an occasional and incidental use and that the primary use of the P-boxes in connection with importation into the United States is the transportation of their contents. Accordingly, their appropriate classification would be as articles for the conveyance and packing of goods, of plastics, boxes, cases, crates and similar articles.

Based on the conclusion that the P-boxes are primarily and repeatedly used for the conveyance of goods, we concur with counsel's assertion that the boxes are eligible for special tariff treatment under subheading 9803.00.50, HTSUSA. The boxes, once entered and duty paid, would be eligible for duty-free admission on subsequent importations upon compliance with the provisions of section 10.41b(c)(1), Customs Regulations (19 CFR

The value issue raised by counsel is presently under consideration and will be the subject of a separate reply.

HOLDING:

Plastic containers, as above described, primarily used for the transportation of goods, which are repeatedly reused for that purpose, and which are used for storage purposes for a minimal period of time incidental to their use to transport goods, are
classifiable in subheading 3923.10.0000, HTSUSA. Merchandise classified under that subheading, which provides for "Articles for the conveyance or packing of goods, of plastics;... Boxes, cases, crates and similar articles..." are subject to a general rate of duty of 3 percent ad valorem. Such containers are eligible for duty-free admission on reimportation, after their initial duty paid admission, under the provisions of subheading 9803.00.50, HTSUSA, upon compliance with the provisions of section 10.41b(c)(1), Customs Regulations (19 CFR 10.41b(c)(1)).

Sincerely,

John Durant, Director
Tariff Classification

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