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HQ 959513




June 16, 1997

CLA-2 RR:TC:MM 959513 HMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7323.99.9060

Ms. Mona Webster
Target Stores
33 South Sixth Street
P.O. Box 1392
Minneapolis, Minnesota 55440-1392

RE: Stackable CD Racks; Headings 7323, 7326 and 4421; subheadings 7323.99.9060 and 7326.20.0050; Other Articles of Wood; Table, Kitchen or Other Household Articles of Iron or Steel; Other Articles of Iron or Steel; NY 896635, revoked.

Dear Ms. Webster:

This is in response to your letter, dated June 28, 1996, on behalf of Target Stores, requesting reconsideration of NY 896635, dated April 12, 1994. In NY Ruling Letter 896635, Customs classified stackable compact disc (CD) racks, items 128-258 and 128-259, under subheading 7326.20.0050 of the Harmonized Tariff Schedule of the United States (HTSUS), as articles of iron or steel.

FACTS:

The two models of CD racks are made of steel wire and wood sides that together are capable of holding 25 single, or 21 single and two double CDs. They measure approximately 16 inches long by 6.5 inches wide by 5.5 inches high. The CD racks are identical in all respects, but for the finish on the wooden side panels. The wooden sides have a black finish (item number 128-258) or a natural finish (item number 129-259). The CDs will be placed between and supported by the steel wires. Although they are sold individually, the CD racks are designed to be stacked one upon the other. The CD racks are packaged and sold in a box displaying a CD rack on a shelf of a wall unit along with books, a candle, and what appears to be a stereo or video component.

The provisions under consideration are as follows:

4421 Other articles of wood...4%

7323 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;

7323.91 Other:
Of cast iron, not enameled:

7323.99 Other:
Coated or plated with precious metal:

Not coated or plated with precious metal:
Other:
7323.99.9060 Other...3.4%

7326 Other articles of iron or steel:
Forged or stamped but not further worked:

7326.20.0050 Articles of iron or steel wire Other...4.6%

ISSUE:

Whether the CD racks are classifiable as household articles of iron or steel under heading 7323, HTSUS, as other articles of iron or steel under heading 7326, HTSUS, or as articles of wood under heading 4421, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS, in accordance with the General Rules of Interpretation (GRIs). GRI 1 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, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

The CD racks are made of steel wire and wooden sides that together are capable of holding single or double CDs. The articles are described under heading 4421, as "Other articles of wood," heading 7323, as "...Other household articles of iron or steel" and heading 7326, as "Other articles of iron and steel."

GRI 2(b) states 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. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.

GRI 3(a) states that when, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, 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. The CD racks are made up of two different components which together form an inseparable whole. Since the CD racks are composite goods, described in part by two or more headings, we must apply rule 3(b) which requires that composite goods are to be classified according to the component which gives the good its essential character.

The Harmonized Commodity Description And Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized system. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the notes should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

Explanatory Note (VIII) to GRI 3(b), at page 4, states that the factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

We believe the steel component imparts the essential character to the CD racks. The steel component is the largest, heaviest and most visually and structurally significant part of the article. The steel component provides the main function of holding the CDs and without it there could not be a rack. The wooden sides simply assist in this function, by providing support to the steel part and acting as a base to the article. In accordance with GRIs 3(b), the CD racks are properly classified according to the constituent component of steel. Articles of steel are provided in Chapter 73, HTSUS. It was suggested that the merchandise is appropriately classified under subheading 7323.99.9060, HTSUS, based on the premise that the articles are intended to be used in the home to hold compact discs.

EN 73.23, at page 1123, indicates that heading 7323 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. The EN further provides that this group includes other household articles such as wash coppers and boilers; dustbins, buckets, coal scuttles and hods; watering-cans; ash-trays; hot water bottles; bottle baskets; movable boot-scrapers; stands for flat irons; baskets for laundry, fruit, vegetables, etc; letter-boxes; clothes-hangers, shoe trees; luncheon boxes. Accordingly, we must determine whether the CD racks are household articles.

The U.S. Court of International Trade (CIT) has noted Webster's New World Dictionary of American English 654 (3d College ed. 1988)'s definition of the term "household" as "of a household or home; domestic." The Court determined that when "household" is used with the term "articles" a use provision is created. Hartz Mountain Corp. V. United States, 903 F.Supp. 57, 59, CIT Slip Op. 95-154(Sept. 1, 1995). The Court found the phrase "household articles" to be a use provision within the context of subheading 3924.90.50. Similarly, we believe that, within the context of heading 7323, when "household" is used with the term "articles" a use provision is created.

Additional U.S. Rule of Interpretation 1(a), HTSUS, states that in the absence of special language or context which otherwise requires, a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use. The subject articles will thus fall under heading 7323 if they belong to the class or kind of articles principally used in the home. The Court has established various factors, which are indicative but not conclusive, to apply when determining principal use within a particular class or kind. They include: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See Hartz Mountain Corp., 903 F.Supp. at 59. In this instance, these factors are helpful in determining whether the CD racks are intended for home use.

The CD racks are made to hold CDs. They are packaged and sold in a box displaying a CD rack on a shelf of a wall unit along with books, a candle, and what appears to be a stereo or video component. They are sold by a retailer directly to the consumer as a merchandise which would organize a collection of CDs. The consumer will generally be expected to store such articles within the home. The evidence presented indicates that the CD racks are principally used in the home and that it would be impracticable to give them a different use. We therefore find that, since the CD racks will be used for household purposes, they are classifiable under subheading 7323.99.9060, as other household articles of iron or steel.

NY 896635 classified the subject merchandise in heading 7326, which provides for "Other articles of iron or steel." EN 73.26 states that this heading covers all iron or steel articles obtained by forging or punching, by cutting or stamping or by other processes such as folding, assembling, welding, turning, milling or perforating other than articles included in the preceding headings of this Chapter or covered elsewhere in the Nomenclature. Since the CD racks are included in heading 7323, we find that they are precluded from classification under heading 7326. Accordingly, NY 896635 must be revoked.

HOLDING:

The stackable CD racks, items 128-258 and 128-259 are provided for in heading 7323. They are classifiable under subheading 7323.99.9060, HTSUS, as "table, kitchen or other articles of iron or steel: Other: Other: Not coated or plated with precious metal: Other: Other... Other." The rate of duty is 3.4% ad valorem.

EFFECT ON OTHER RULINGS:

NY 896635, dated April 12, 1994, is revoked.

Sincerely,

John Durant, Director
Tariff Classification Appeals Division


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