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HQ 959831




APRIL 1, 1997

CLA-2 RR:TC:MM 959831 HMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7116.20.5000

Mr. Joel K. Simon and
Arlen T. Epstein
Serko & Simon
One World Trade Center
Ste. 3371
New York, NY 10048

RE: Wax castings of rings with diamonds or precious stones; GRI 1; GRI 2(a); Heading 7116; Subheading 7116.20.15; Subheading 7116.20.50; EN 71.16; articles of jewelry; articles of personal adornment and other decorated articles, EN 7116 (A); General EN 3, Section XIV; Heading 7117; HQ 959687.

Dear Mr. Simon and Mr. Epstein:

This is in response to your letter to the Area Director of Customs, New York, dated September 30, 1996, on behalf of M. Fabrikant & Sons, Inc., regarding the tariff classification of wax castings of rings set with diamonds or other precious stones under the Harmonized Tariff Schedule of the United States. Your letter was forwarded to this office for a reply. Please note that HQ 959687 involving the same merchandise was also issued on this date.

FACTS:

The merchandise under consideration is a wax casting of a ring with a diamond or other precious stone set in the wax casting. The merchandise is an intermediate product in the process known as the Lost Wax Casting Technique which is used to produce a gold ring set with stone.

Before the product is imported a rubber mold is produced with a negative impression in the shape of a ring and from this rubber mold a wax casting is made. Precious stones are then set in place on this wax casting. It is this product, the wax casting with the precious stones mounted that will be shipped to the United States.

In the United States, the wax castings and precious stones are encased in a plaster of paris which is allowed to harden. After hardening the wax castings are baked so that the wax evaporates, leaving a hollowed out negative mold with the diamonds or precious stones held in place. Molten gold is then injected into the empty mold previously filled with wax and allowed to cool down. Once the gold is hard, the plaster is dissolved leaving the gold ring set with diamonds or other precious stones. The gold ring is then finished and polished.

The provisions under consideration are as follows:

7116 Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed):

7116.20 Of precious or semiprecious stones (natural, synthetic or reconstructed):

Articles of jewelry:
7116.20.05 Valued at not over $40 per piece...4.6%

7116.20.15 Other...6.5%

Other
7116.20.50 Other...2.7%

7117 Imitation jewelry:

ISSUE:

What is the tariff classification of wax castings set with diamonds or other precious stones.

LAW AND ANALYSIS:

You contend that the merchandise is appropriately classified under subheading 7116.20.50 of the Harmonized Tariff Schedule of the United States, (HTSUS) and not under heading 7117.

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (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 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).

General EN 3 to Section XIV, HTSUS, states that Chapter 71 includes "in general, articles made wholly or partly of natural or cultured pearls, diamonds or other precious or semi-precious stones (natural, synthetic or reconstructed), precious metals or metal clad with precious metal (headings 71.13 to 71.16)...." EN 71.16 at page 963 states that

This heading covers all articles (other than those excluded by Notes 2(b) and 3 to this Chapter), wholly of natural or cultured pearls, precious or semi-precious stones, but not containing precious metals or metals clad with precious metal (except as minor constituents)(see Note 2(b) to this Chapter).

EN 71.16 thus includes:

(A) Articles of personal adornment and other decorated articles (e.g. clasps and frames for handbags, etc; combs, brushes; ear-rings; cuff-links, dress-studs and the like) containing natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed), set or mounted on base metal (whether or not plated with precious metal), ivory, wood, plastics, etc.

It includes pearls or stones graded according to size, quality, shade, etc, and constituting an article ready for use as jewelry. But the heading excludes ungraded or graded pearls and ungraded stones merely temporarily strung for facility of transport without any setting or fitting of metal or other material; these fall in heading 71.01, 71.03 or 71.04 (see Explanatory Notes to headings 71.01 to 71.03).

We believe that parts (A) and (B) to EN 71.16, at page 964, help in determining whether an article falls under heading 7116. They state that heading 7116 includes articles of personal adornment, stones graded according to size and constituting an article ready for use as jewelry, and other articles consisting wholly or partly of precious or semi-precious stones which may also contain other materials. Accordingly, we must determine if the wax castings with diamonds or precious stones fall under any of these two parts.

EN 71.16 (A) gives various examples of articles of personal adornment and other decorated articles such as clasps and frames for handbags, etc; combs, brushes; ear-rings; cuff-links, dress-studs. Articles identified in Part (A) are similar to those articles defined as "articles of jewelry" of note 9 to Chapter 71. Note 9 is provided for purposes of headings 7113 and it is also used by heading 7117. We believe that the definition of note 9 to Chapter 71 for the expression "articles of jewelry" is relevant in this instance. It is instructive in ascertaining the meaning of "articles of jewelry" of subheading 7116.20 and "articles of personal adornment and other decorated articles" of EN 71.16(A). Article of jewelry is defined in note 9 to Chapter 71 as "(a) any small objects of personal adornment (gem-set or not)...; and (b) articles of personal use of a kind normally carried in the pocket, in the handbag or on the person...."

It is well settled that imported merchandise must be classified with reference to its condition when imported. As imported, diamonds or precious stones are set in place on a wax casting molded as a ring. The product is an intermediate product which is used to produce a gold ring set with precious stones. This article is not going to be given a personal use or carried in the pocket, in a handbag or on the person. It is not a ring intended to be worn or used as an article of personal adornment or for any other personal use. If worn, the wax casting would break and diamonds or precious stones fall. The wax casting is a convenient way to transport and store the diamonds or precious stones until they become part of a ring in the United States. It is not permanent and lasting. Thus, the wax casting with diamonds and precious stone cannot be considered an article of jewelry or personal adornment under heading 7116.

However, pearls or stones graded according to size, quality, shade, etc. and constituting an article ready for use as jewelry are included in this heading. Based on the information presented, we conclude that the diamonds or precious stones are sorted and graded before they are attached to the wax castings. No further manufacturing process is done to the diamonds or precious stones. Similarly, in their condition as imported, the wax castings will not be further processed. The wax castings provide an inexpensive way for shipping the diamonds or precious stones to the United States. Once in the United States the precious stones are temporarily stored before they are used in the manufacture of rings. Therefore, inasmuch as the wax castings are set with graded diamonds or precious stones, they are described in heading 7116; and, since articles made of wax castings set with graded diamonds or precious stones are not articles of jewelry, they are classifiable under subheading 7116.20.50., as articles of precious stones: other: other:.

As to classification under heading 7117, imitation jewelry, note 11 to Chapter 71, HTSUS, states that "for purposes of heading 7117, the expression imitation jewelry' means articles of jewelry within the meaning of paragraph (a) of note 9...not incorporating natural or cultured pearls, precious or semiprecious stones..." We agree with your assertion that the wax castings with diamonds or precious stones are excluded from classification in heading 7117 by virtue of chapter note 11, since they contain precious stones.

HOLDING:

Under the authority of GRI 1, wax castings set with graded diamonds or other precious stones are properly classified under subheading 7116.20.50, HTSUS, as "Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed):... Of precious or semiprecious stones (natural, synthetic or reconstructed):... Other:... Other." The rate of duty is 2.7% ad valorem.

Sincerely,

John Durant, Director
Tariff Classification Appeals Division

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