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HQ 958215




July 9, 1996

CLA-2 RR:TC:MM 958215 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 9608.99.40

Port Director of Customs
Hemisphere Center
Routes 1 & 9 South
Room: 200
Newark, NJ 07114

RE: Protest 1001-95-105046; Ball Point Pens; Pen Parts; Unfinished and Unassembled Goods; Bulk Shipments; Packaged Separately for Convenience; GRI 2(a); HQs 081999, 950118, 950320, 951511, 952850, 953047, 953313, 957790

Dear Port Director:

The following is our decision regarding Protest 1001-95-105046, which concerns the classification of ball point pen parts under the Harmonized Tariff Schedule of the United States (HTSUS). In addition to arguments presented with the original protest, consideration has also been given to written supplemental submissions and a meeting with counsel.

FACTS:

The subject merchandise consists of four piece units comprised of: a plastic clipped cap; a plastic barrel; a metal band; and, a plastic follower/plug. When the four pieces are assembled together, they form an unfinished ball point pen (85% of the total value of the finished pen) missing only a standard ink cartridge and small spring. There are equal quantities of each component imported, which when assembled, could account for a finite number of unfinished ball point pens. After importation, the four pieces could be assembled with domestically produced ink cartridge and a spring. The protestant states that each component is packed with other components of the same type in a plastic bag for convenience. The invoice lists 60,000 sets. The packing list describes the merchandise as follows:

Marks & Nos. Q'ty (PC) Description
40-47 @ 7,000 Cap (Black, White, Blue,
56,000 Wine Color)

48-59 @ 5,000 Barrel (Black, White,
Blue,
60,000 Wine Color

60 50,000 Plug
61 10,000 Plug

4,000 Cap (Assort)
60,000 Ring (Gold Color)

The merchandise was entered on September 15, 1994, under subheading 9608.10.00, HTSUS, as unassembled and unfinished ball point pens. The entry was liquidated on March 24, 1995, under subheading 9608.99.40, HTSUS, as ball point pen parts. The protest was timely filed on June 8, 1995.

The 1994 subheadings under consideration are as follows:

9608: Ball point pens; felt tipped and other porous-tipped pens and markers; fountain pens, stylo-graph pens and other pens; duplicating styli; propelling or sliding pencils (for example, mechanical pencils); pen- holders, pencil-holders and similar holders; parts (including caps and clips) of the foregoing articles, other than those of heading 9609:

9608.10.00: Ball point pens. . . .

Goods classifiable under this provision have a column one, general rate of duty of 0.8 cents each plus 5.4 percent ad valorem.

9608.99.40: Other: [o]ther: [o]ther: [p]arts of articles provided for in subheadings 9608.10, 9608.31 and 9608.39 (other than balls for ball point pens). . . .

Goods classifiable under this provision have a column one, general rate of duty of 0.9 cents each plus 6.1 percent ad valorem.

ISSUE:

Whether the components are classifiable individually as ball point pen parts, or, under GRI 2(a), are the components unfinished and unassembled ball point pens (packaged separately for convenience), under the HTSUS?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

The port claims that because the ball point pen parts are imported in separate bags containing the same type of components, that they are shipped for the convenience of manufacturing and are therefore not "unassembled". The protestant claims that the merchandise is classifiable as unfinished and unassembled ball point pens based upon the application of GRI 2(a) which provides that "any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article."

. The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding nor dispositive, the ENs 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. 89-80, 54 FR 35127, 35128 (August 23, 1989). ENs to GRI 2(a), state in pertinent part:

(I) The first part of Rule 2 (a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.

(V) The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.

(VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule.

Protestant states that an unfinished or incomplete article must be classified under the eo nomine provision, when such article has the essential character of the complete or finished article. In support of this position, protestant cites to several rulings dealing with unfinished kits or unfinished merchandise. In HQ 950118, dated December 10, 1991, Customs determined that a partially assembled passenger railway car, containing 49.72% of the constituent parts, was classifiable as a unfinished railway car based upon the application of GRI 2(a). The protestant believes that like the unfinished railway cars, the subject pen components are processed to the point that they are clearly dedicated for the ultimate and exclusive use as pens and are provided for eo nomine as ball point pens. However, this ruling was modified in HQ 957790, dated May 30, 1995, because upon re-examination, Customs realized that HQ 950118 placed undue reliance on legal principles developed under the predecessor tariff code to the HTSUS. After further analysis, Customs concluded that the railway cars did not have the essential character of a complete or finished railcars and classified them as parts. See HQ 957790.

Protestant believes that Customs has mistakenly inferred that unassembled parts packaged in bulk are not "unassembled" for purposes of GRI 2(a) based upon HQ 081999, dated December 10, 1990. In HQ 081999, Customs determined whether unassembled golf car components packaged separately in bulk and entered for assembly in the United States were classified as unassembled goods pursuant to GRI 2(a). Customs held that because the goods were packaged in bulk for an assembly operation, they could not be classified as unassembled goods imported as "kits". Customs further held that the components were classified separately under the appropriate headings of the HTSUS. Protestant states that this interpretation is incorrect, citing HQ 951511, dated June 1, 1992. In HQ 951511, Customs determined that motor vehicle wiring harnesses imported with the lamps packaged separately, were classified based upon GRI 2(a) under heading 8512, HTSUS, as unassembled electrical lighting or signaling equipment used for motor vehicles. In that ruling, Customs further stated that unassembled goods do not have to be imported in "kit" form. However, in HQ 953313, dated May 10, 1993, Customs also stated the following:

A question has arisen regarding the interpretation of HQ 951511, dated June 1, 1992, regarding the classification of unassembled articles imported in different containers. However, HQ 951511 still requires that the articles to be considered together as an unassembled good are entered in the same importation. Therefore, they do not have to be in the same container, box, crate, kit, etc., but only in the same importation. Furthermore, Customs has consistently held that bulk shipments of inventory are not to be considered unassembled goods, even if it would be possible to assemble them together into one or more articles.

We note that Customs has dealt with the classification of ball point pen components in HQ 950320 issued on May 4, 1992, and in HQ 952850 issued on April 14, 1993. HQ 950320 dealt with the classification issue of barrels, caps, and ink cartridges for ball point pens which, subsequent to importation, are assembled with similar components from the same shipment, other shipments or parts of domestic origin. Customs concluded that because the components were bulk shipments destined for inventory to supply the domestic assembly line, they could not be classified as ball point pens under GRI

In HQ 952850, Customs determined the classification of seven individually imported plastic parts of ball point pens available in various color combinations drawn from nine different colors. Even though the importer intended to convert all pens parts of a particular shipment into complete pens, some color combinations were created from other shipments causing intermingling of parts from separate shipments. Customs determined that a main reason the goods were entered unassembled was not for requirements or convenience of packing, handling, or transport, but because all the parts required for the assembled pens may not be included in the same shipment. Customs concluded that these parts were considered bulk inventory and classified the parts separately on the basis of GRI 1. In each situation, Customs has examined the number of parts which make-up a completed good versus the number of unmatched parts, how the merchandise was treated after importation (e.g., put into bins for later use in manufacturing, commingling with earlier shipments or domestic products), and how it was presented (e.g., convenience of packing).

Protestant asserts that no components are used for inventory purposes and that all the components can be assembled into completed pens of solid colors. However, according to the packing information, the pen components were packaged so that each component is packed with other components of the same type, but different colors in plastic bags. The shipment also contained a package of 4,000 caps listed as assorted colors. While there may be an equal number of caps and barrels, the invoice and packing list do not clearly indicate that there are an equal number of caps and barrels of the same color. Customs will not assume facts that are not in evidence. We conclude that the subject components are imported in bulk for inventory and/or manufacturing purposes, not for reasons such as requirements or convenience of packing, handling or transport. Therefore, the pen components are classifiable under subheading 9608.99.40, HTSUS, as ball point pen parts.

HOLDING:

The plastic pen components are classifiable under subheading 9608.99.40, HTSUS, as parts of ball point pens.

The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision, together with the Customs Form 19, should be mailed by your office to the protestant, through counsel, 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 of 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
Tariff Classification Appeals

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