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HQ 959588




February 5, 1997

CLA-2 RR:TC:FC 959588 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.30.0090; 3926.90.9890

Port Director of Customs
110 S. Fourth Street
Minneapolis, MN 55401

RE: Request for Further Review of Protest 3501-96-100179, Dated May 7, 1996, Concerning the Classification of Character-Shaped Bottles and Their Caps in the Form of Non-Human Characters

Dear Mr. Gonzalez:

This ruling is on a protest that was filed against your decisions of March 8 and March 22, 1996, regarding the subject containers.

FACTS:

The articles under consideration are plastic bottles and decorative heads, in the form of non-human Sesame Street characters. The articles, in their complete condition, are approximately 9 inches in overall length and are composed of containers in the shape of the body of various characters, which can hold 10 ounces of liquid, and the heads of the characters which slip over the caps of those containers. The containers are imported empty and are filled with bubble bath for children subsequent thereto. These articles have been classified under the provisions chapter 39 as articles of plastics. The importer believes that these articles should be classified under the provision for toys representing animals or non-human creatures and parts and accessories thereof in subheading 9503.49.0020, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

ISSUE:

What is the classification of empty character-shaped bottles and decorative heads, in the form of non-human characters?

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 its application for further review counsel has indicated that although prior rulings covered the character-shaped bottles, caps and overcaps, those rulings were based on inadequate information as to the use and marketing of the subject articles and they did not consider any legal arguments since none were presented with those ruling requests. We have herein considered this new information and documentation and have reviewed the prior rulings in light thereof.

In considering this matter we note that counsel states that the primary purpose of the instant articles is to amuse children and, therefore, they should be considered toys under subheading 9503.49.0020, HTSUSA. Counsel notes that the retail customer of the bubble bath can purchase the same quantity of such bubble bath in plain containers for less that 50 percent of the cost of such bubble bath in the instant containers. In some instances there is a greater disparity between the retail price of the bubble bath in a plain container and the same bubble bath in a character-shaped bottle. Counsel suggests that the retail customer's willingness to purchase the bubble bath in these bottles at the significantly higher price than the same product in plain bottles indicates that the bottles are really the object of such purchases. Counsel further claims that these articles, which are plastic reproductions of puppets from a childrens amusement program, must, ipso facto, be purchased to amuse. Counsel further indicates that these items are licensed and marketed as toys and that they belong to a class of goods designed for the amusement of children. In support of its position counsel references United States v. The Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F2d 373 (1976) and Lenox Collection v. United States, Slip Op. 96-30.

The articles under consideration are containers capable of holding liquid bubble bath and that they are only sold, subsequent to importation, filled with bubble bath. While counsel states that the bottles are marketed as toys, we note, based on empirical observations by this Office in a variety of types and number of retail establishments, that these articles are displayed in retail establishments with other bubble bath and shampoo containers. We were unable to confirm that these articles, which serve as bottles, are marketed as toys. We observed other similar containers on the purveyor's shelves. None of these displays, including the hang tags on individual bottles, indicated that the articles were toys although some of the displays referred to the articles as collectibles. Accordingly, we disagree with counsel that the application of the factors noted in the Carborundum case would dictate a finding that articles are toys.

We also disagree with counsel as to the applicability of Lenox. In that case the Court of International Trade held that articles, shaped like Victorian houses, which could be used to hold spices, were primarily used for decorative purposes and should be classified as ornamental articles. Assuming arguendo that the Lenox principles should be applied to the instant articles and that they may be used as toys at some time, we do not agree with counsel that the articles are primarily used for that purpose. The President and CEO of the importer, in a letter submitted with other information and documentation in support of the protest, specifically states that "Once empty, the...character package become a tub toy..." Thus, any play use is secondary to the use of the article as a container and is subsequent thereto.

We note that the license agreement from the copyright owner of the various characters on which the instant articles are based, as referenced in the sublicense to the importer, which authorizes the importer to utilize these Sesame Street characters in connection with hair care products, bubble bath and liquid soap products, only refers to those products. There is no indication in the sublicense which specifically authorizes the importer to produce and distribute toys bearing the likeness of the Sesame Street characters.

We also note that bubble bath for children, including the same bubble bath that is packaged in the character-based containers, is also sold in plain generic containers and in brightly colored containers with labels bearing the likenesses of characters with which a child may identify such as the Sesame Street characters. Packaging or novelty containers are a method which distinguishes one merchandisers product from another. The packaging and appearance of a product also helps to attract the impressionable buyer. Based on our observation, these types of articles are also placed on children's eye level shelves in the store to attract a child's attention. The imported goods, although novel, unique and fancy, are containers. The fact that a purchaser might be willing to pay what might be considered an exorbitant price, does not transform a functional container into another product.

Based on consideration of the above information and documentation, we have concluded that the holdings of Headquarters Ruling Letter 957825, dated September 14, 1995, New York Ruling Letter 807937, dated April 5, 1995, and New York Ruling Letter 898313, dated June 1, 1994, relative to the character shaped bottles, human and non-human, the bottle caps and the decorative head overcaps for these articles, were correct.

HOLDING:

Character shaped plastic bubble bath/shampoo bottles in the shape of various non-human cartoon-type characters, when imported in their complete condition, are classifiable in subheading 3923.30.0090, HTSUSA, which provides for articles for the conveyance or packing of goods, of plastics..., other. Articles so classified are subject to a general rate of duty of 3 percent ad valorem. - 4 -

Decorative head overcaps in the shape of various non-human cartoon-type characters, which are designed to be attached to containers in the shape of the body of the relative cartoon-type character, are classifiable in subheading 3926.90.9890, HTSUSA, as Other articles of plastics...: Other: Other, Other. Articles so classified are subject to a general rate of duty of 5.3 percent ad valorem.

Since the classification indicated above is the same as the classification under which the entries were liquidated, you are instructed to deny the protest in full.

A copy of this ruling should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

In accordance with Section 3A(1)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be provided by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entries in accordance this decision must be accomplished prior to the 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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