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HQ 958536




May 15, 1996

CLA-2 RR:TC:TE 958536 NLP

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.91.0090; 4205.00.8000

Mr. Arturo E. Dominquez
ADCO I.T.S., INC.
902 Market Street
Laredo, TX 78040

RE: Tariff classification of leather tool receptacles; Headings 4202, 4203 and 4205; Explanatory Notes to Headings 4202 and 4205; HRLs 083204 and 084609;
Totes Incorporated v. United States

Dear Mr. Dominguez:

This letter is in response to your requests, dated August 18, 1995, and October 2, 1995, for a ruling, under section 177.11(2), (3) and (4), Customs Regulations, concerning the classification of leather tool receptacles to be imported from Mexico. On September 14, 1995, District Ruling Letter 814192 was issued to you classifying the subject leather tool receptacles. Diagrams of the leather tool receptacles were submitted for our review.

FACTS:

The articles at issue are two styles of leather tool receptacles. Sample A is a leather belt with permanently attached leather receptacles which are to be used for carrying tools. The second item, sample B, is a leather receptacle which consists of several leather pouches attached to each other. It has a leather loop at the top to enable the user to carry it on a belt, if the belt is inserted through the loop. We note that this model is not imported with a belt affixed to it. This model is also to be used for carrying tools. Both models are designed to allow an individual easy access to tools while working.

On September 14, 1995, District Ruling Letter (DD) 814192 was issued to you classifying these leather tool receptacles. Sample A was classified in subheading 4205.00.8000, HTSUS, which provides for "Other articles of leather or of composition leather: Other: Other." Sample B was classified in subheading 4202.91.0090, HTSUS, which provides for "Trunks, suitcases, vanity cases, attache cases, briefcases. . .: Other: With outer surface of leather, of composition leather or of patent leather: Other."

In your letter of August 18, 1995, you requested an internal advice ruling pursuant to 19 CFR 177.11(b)(2) & (3), (section 177.11, Customs Regulations). Subsequently, in a letter dated October 2, 1995, you requested an internal advice ruling pursuant to 19 CFR 177.11(b)(4), (section 177.11, Customs Regulations). These regulations provide the following in pertinent part:

177.11 Requests for advice by field offices.

(2) When no ruling has been issued. Internal advice will be sought by a Customs Service field office with respect to a current transaction for which no ruling was requested or issued under the provisions of this part whenever a difference of opinion exists as to the interpretation or proper application of the Customs and related laws to the transaction, and the field office is requested to seek such advice by an importer or other person who would have been entitled, under section 177.1(c), to request a ruling with respect to the transaction, while prospective. The request must be submitted to the field office in writing and in accordance with the provisions of paragraph (b)(3) of this section

(3) Form of request by importers and others. An importer or other person requesting that a Customs Service field office seek advice from the Headquarters Office must make such a request, in writing, to the field office having jurisdiction over the transaction in question....

(4) Review of request by importers and others. All requests submitted by importers and other persons under paragraph (b)(3) of this section, will be reviewed by the field office to which they are submitted. In the event a difference of opinion exists as to the description of the transaction or as to the point or points at issue, the person submitting the request will be so advised in writing. If agreement cannot be reached, both the statements of the person submitting the request and the field office will be forwarded to the Headquarters Office for consideration. [Emphasis added]

We note that, according to these provisions, in order for a request for internal advice to be perfected it has to be made to Headquarters by a Customs Service field office after a proper request made by the importer. It is the job of the Customs Service field office at issue to forward their statements and yours to Headquarters for review if there is a difference of opinion after an appropriate request has been made under section 177.11 (b)(3), Customs Regulations (19 CFR 177.11). We have not received a request for internal advice from the Customs Service field office at issue. Moreover, based on a review of your letters of August 18, 1995, and October 2, 1995, it
appears that your request was made directly to Headquarters, not to the field office at issue. Therefore, your request for an internal advice has not been perfected and we cannot issue you a ruling pursuant to section 177.11(b)(2) and (3), Customs Regulations (19 CFR 177.11).

However, we note that DD 814192 was issued to you classifying the subject leather tool receptacles. In fact, in your letter of October 2, 1995, you take issue with the classifications set forth in DD 814192. Section 177.2(c), Customs Regulations (19 CFR 177.2), provides that if an importer or other person to whom a ruling letter is issued disagrees with the tariff classification set forth in the ruling issued by the New York Region or other Area or District offices, he may petition the Director, Commercial Rulings Division for review of the ruling. Therefore, pursuant to section 177.2(c), Customs Regulations (19 CFR 177.2), we are treating your October 2, 1995, letter as a request for reconsideration of DD 814192.

ISSUE:

What is the classification of the subject leather tool receptacles under the HTSUS?

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes. Where goods cannot be classified on the basis of GRI 1, the remaining GRI will be applied in order.

Heading 4202, HTSUS, covers:

Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper

The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System constitute the official interpretation of the nomenclature at the international level. While not legally binding, they do represent the considered views of classification experts of the Harmonized System Committee. It has therefore been the practice of the Customs Service to follow, whenever possible, the terms of the EN when interpreting the HTSUS. See T.D. 89-80.

The EN to heading 4202 defines "similar containers" for the first part of this heading as ".... includ[ing] hat boxes, camera accessory cases, cartridge pouches, sheaths for hunting or camping knives, etc." It is our opinion that sample B is similar to those containers previously mentioned; specifically, cartridge pouches used to house cartridges to afford the user easy access. Therefore, sample B is classifiable in heading 4202.

In Totes Incorporated v. United States, 95-1125 (decided October 24, 1995), affirming the Court of International Trade's decision in Totes Incorporated v. United States, 865 F. Supp. 867 (1994), the U.S. Court of Appeals for the Federal Circuit examined the scope of heading 4202, HTSUS, with regard to specialized containers. In the appellate decision, the court examined the classification of the "Totes Trunk Organizer," a rectangular case used to organize and store items such as motor oil, tools and jumper cables in an automobile trunk. The Court of Appeals held that:

"the merchandise is not removed from classification under subheading 4202.92.9020 simply because it is intended to organize, store, and protect items associated with a motor vehicle. Many of the containers named in subheading 4202.92.9020 are used to organize, store, and protect specific items."

The Court of Appeals' determination supports Customs' position that sample B is classifiable within heading 4202, HTSUS, as it has the essential characteristics and purposes of heading 4202, HTSUS, exemplars: it is used to organize, store, protect and carry various items.

The next issue to be decided is the subheading within which sample B is to be classified. The competing provisions in Heading 4202 are subheading 4202.11.00, HTSUS, which provides for trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers of leather, or subheading 4202.91.0090, which provides for other similar containers: with outer surface of leather, other.

When goods are classifiable in two or more headings, GRI 3 provides a guide to the correct classification:

When by application of Rule 2(b) [goods of more than one material or substance] 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.

The EN to heading 4202 states that "[t]his heading covers only the articles specifically named therein and similar containers." It is our opinion that this leather tool receptacle is not a similar container to those enumerated in subheading 4202.11.00, HTSUS. Containers that are designed to contain the items from which they get there names, i.e. leather tool containers, and are designed to be carried with the person are not similar to the items enumerated in 4202.11.00 HTSUS. As a result, the instant leather tool receptacle is not classifiable under subheading 4202.11.00, HTSUS.

Subheading 4202.91.00, HTSUS, provides for other similar containers of leather. The EN to heading 4202, as discussed on page 4, defined "similar containers" for the first part of heading 4202, HTSUS. Sample B is similar to holsters and cartridge pouches enumerated in the EN. These exemplars are designed to be worn on a belt and to contain a specific item(s). Sample B is similarly designed to be worn on a belt and contain specific items, i.e., tools.

Moreover, in two Headquarters Ruling Letters (HRLs), Customs classified various types of leather tool receptacles similar to sample B in subheading 4202.91.0090, HTSUS. In HRL 083204, dated February 14, 1990, two of the receptacles were described as leather containers for workmen's tools and equipment that had built-in accomodations for belts. The third item was a leather unit which had affixed to it a metal piece that accommodated workmen's tools and a belt could be inserted through the slots of this item. Customs determined that these were similar containers to the items listed in the first part of heading 4202, HTSUS. Therefore, they were classifiable in subheading 4202.91.0090, HTSUS. In HRL 084609, dated July 31, 1989, we dealt with the classification of a leather welder's rod holder whose main purpose was to provide a welder with a convenient way to store metal welding rods. The top of the holder had a heavy duty clip-style swivel hook; the holder could be secured via the hook to a belt or a snap hook. The top of the holder also contained a belt loop for easy attachment. This article was classified in subheading 4202.91.0090, HTSUS, based on its similarity to the articles enumerated as similar containers in the ENs to heading 4202, HTSUS. This provision was found to be the most specific for classifying the rod holder.

We note that the other possible classification for sample B is in heading 4205, HTSUS, which provides for other articles of leather. The ENs to heading 4205 state that this heading "covers those articles of leather...which do not fall in the preceding headings of this Chapter...." First, heading 4202, HTSUS, precedes heading 4205, HTSUS. Second, and more importantly, the language of heading 4202, HTSUS, more specifically describes this leather tool receptacle than the general language of heading 4205, HTSUS. Therefore, sample B remains classified in heading 4202, HTSUS.

Sample A differs from sample B in that it already has a belt attached to it. As a result, it is not classifiable in heading 4202, HTSUS. Heading 4203, HTSUS, provides for articles of apparel and clothing accessories of leather or of composition leather: belts and bandoliers with or without buckles. Subheading 4205.00.40, HTSUS, provides for straps for general use. The instant item is not an apparel belt nor is it a strap. Accordingly, it is our opinion that sample A is classified in subheading 4205.00.8000, HTSUS, which provides for other articles of leather: other: other. See, HRL 083204, wherein one of the leather tool containers subject to classification was imported with a woven textile belt affixed to it. We classified this article in subheading 4205.00.8000, HTSUS.

ELIGIBILITY FOR NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) DUTY PREFERENCES

Subdivision (b) of General Note 12, HTSUS, sets forth the rules of origin for determining whether an imported good is an originating good. It provides, in pertinent part, the following:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(I) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that-

(A) except as provided in subdivision (f) of this note, each of the non- originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein....

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials;

According to your letter, the leather tool receptacles are of Mexican origin. Pursuant to the "wholly obtained or produced in the territory of . . . Mexico . . ." rule, these tool receptacles are eligible for a reduced rate of duty under NAFTA, if all the applicable regulations are met.

HOLDING:

Sample A is classified in subheading 4205.00.8000, HTSUS, which provides for "Other articles of leather or of composition leather: Other: Other." It is entitled to entry free of duty.

Sample B is classified in subheading 4202.91.0090, HTSUS, which provides for "Trunks, suitcases, vanity cases, attache cases, briefcases. . .: Other: With outer surface of leather, of composition leather or of patent leather: Other." The applicable rate of duty is 5.9% ad valorem. Articles originating in Mexico and classified in this subheading are eligible for a duty rate of 4.7% ad valorem under NAFTA, if all applicable regulations are met.

DD 814192 is hereby affirmed.

Sincerely,

John Durant, Director

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