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HQ 960996




July 23, 1998

CLA-2 RR:CR:GC 960996 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9505.10.25

Mr. John M. Peterson
Neville, Peterson & Williams
80 Broad Street
New York, New York 10004

RE: "Christmas Magic Mainstreet" table-top musical decoration; NYRL B88074

Dear Mr. Peterson:

This is in response to your October 1, 1997, letter on behalf of Target Stores Division of Dayton Hudson, requesting reconsideration of New York Ruling Letter (NYRL) B88074 dated August 13, 1997, which classified an article identified as "Christmas Magic Mainstreet" under subheading 3926.40.0000 of the Harmonized Tariff Schedule of the United States (HTSUS) which provides, in pertinent part, for other plastic articles.

FACTS:

The "Christmas Magic Mainstreet" is an electrically-operated scale model replica of a winter street scene. The article is composed of a rectangular plastic base measuring approximately 26 inches long and 11 inches wide. A plaque on the front of the base contains the words "The Magic of Mainstreet." A long oval chain-operated track powered by an AC electric motor and an electronic music box which plays 12 different Christmas songs are contained within the base. On top of the base are openings for motorized track pegs on which plastic figurines are placed, openings with electrical contacts for the insertion of figurines along the front of the base and several slots and openings for the insertion of scale-model buildings, figurines and trees. Among the scenes depicted are the selling of Christmas trees, street lamps with holiday wreaths, strung Christmas lights, a sleigh, roasted chestnuts, buildings festooned with wreaths and Christmas decorations, carolers, a May Pole and a depiction of Santa Claus.

When electrically activated, the lights in the street lamps and strung lights illuminate the decoration. The sleigh (attached to the chain) appears to be pulled by a horse. The Santa Claus figure appears from behind the shuttered windows of a building. The May Pole rotates while the music box plays a variety of Christmas carols. The following statements appear on the box in which the article is sold:

Holiday spirit brings this tiny Christmas village to life!

Each animated character in the Magic of Mainstreet has been carefully designed to represent the warm and special feelings of an old town Christmas! One mode animates Mainstreet with constant motion and music; another plays a Christmas melody every other minute as the sleight passes by.

The article is designed to be placed on a table-top or counter and serve as a decoration. According to the importer, it sells the articles seasonally in its Department 51 "Trim the Tree Shop."

ISSUE:

Whether "Christmas Magic Mainstreet" is classifiable as a festive article.

LAW AND ANALYSIS:

In Midwest of Cannon Falls, Inc. v. United States, Court No. 92-03-00206, 1996 Ct. Int'l Trade LEXIS 15 (Ct. Int'l. Trade, January 18, 1996), and Court No. 96-1271, 96-1279, 1997 U.S. App. LEXIS 21617 (Fed. Cir. August 14, 1997) (hereinafter Midwest), the Court addressed the scope of heading 9505, HTSUS, specifically, the class or kind "festive articles." It then applied its conclusions to 29 specific articles to determine whether they were included within the scope of the class "festive articles." According to the court, all of the articles were classifiable as "festive." This application provided new guidelines for the classification of "festive articles." In general, merchandise is classifiable in heading 9505, HTSUS, as a "festive article" when the article, as a whole:

1. Is not predominately of precious or semiprecious stones, precious metal or metal clad with precious metal;

2. Functions primarily as a decoration or functional item used in celebration of and for entertainment on a holiday and

3. Is associated with or used on a particular holiday

Additionally, the Court gave consideration to the general criteria for classification set forth in United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (hereinafter Carborundum). Therefore, for those articles involving holidays, and symbols not specifically recognized in Midwest, in addition to the above criteria, Customs will consider the general criteria set forth in Carborundum in determining whether the particular article is of a class or kind of good known as "festive articles." Those criteria include: the general physical characteristics of the article, 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.

The "Christmas Magic Mainstreet" has no precious or semi-precious stones, metals or metal clad with precious metal. It functions primarily as a decoration used in celebration of and for entertainment for a particular holiday; Christmas.

Customs has always recognized Christmas as a festive holiday for tariff purposes. Furthermore, we recognize that table-top mechanical and musical decorations are, in general, articles which may be of a class or kind of decoration considered a "festive article" for tariff purposes. Application of the Carborundum factors will determine whether a particular table-top mechanical and musical decoration belongs to the class.

Application of the Carborundum factors to this particular table-top mechanical and musical decoration indicates that the "Christmas Magic Mainstreet" falls within the scope of the class, "festive articles." The physical appearance of the decoration, namely its wreaths, carolers, songs and Santa Claus indicate its use with the Christmas holiday. Furthermore, both the environment of sale, in a "Tree Trimming Shop" together with the various statements on the box in which it is sold, create an expectation for the ultimate purchaser that the decoration is used only during the Christmas season. Finally, it is used in the same manner as merchandise which defines the class, in that it is a decoration which incorporates various symbols of a recognized holiday season.

Based on this analysis, Customs is of the opinion that the expectation of the ultimate purchaser, environment of sale, use in the same manner as merchandise which defines the class and recognition in the trade of this use, all indicate that the "Christmas Magic Mainstreet" is principally used as a "festive article." Therefore, it is classifiable under heading 9505, specifically, subheading 9505.10.25, HTSUS, as "Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: [c]hristmas ornaments:

Section 152.16 of the Customs Regulations (19 CFR ?152.16), states, in pertinent part, that:

? 152.16 Judicial changes in classification

The following procedures apply to changes in classification made by decisions of either the United States Court of International Trade or the United States Court of Appeals for the Federal Circuit...:

(e) Other decisions adverse to Government. Unless the Commissioner of Customs otherwise directs, the principles of any court decision adverse to the Government...shall be applied to unliquidated entries and protested entries which have not been denied in whole or in part and in which the same issue is involved as soon as the time within which an application for a rehearing or review may be filed has expired without such application having been made.

As the judicial decision in Midwest was adverse to the government, and had a direct effect on the classification of merchandise which was the subject of NYRL B88074, that ruling was effectively revoked by Midwest. Since NYRL B88074 has already been effectively revoked by judicial decision, this is not a proposed interpretative ruling or decision which would require publication in the Customs Bulletin under 19 U.S.C. 1625(c). Rather, this letter is a new, prospective ruling which applies the findings in Midwest to the merchandise ruled upon in NYRL B88074. As such it governs any unliquidated or protested entries to which Midwest applies.

HOLDING:

The "Christmas Magic Mainstreet" is classifiable under subheading 9505.10.25, HTSUS, as "Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: [c]hristmas ornaments: [o]ther." The applicable rate of duty is free.

Since NYRL B88074 has already been effectively revoked by judicial decision, this is not a proposed interpretative ruling or decision which would require publication in the Customs Bulletin under 19 U.S.C. 1625(c). Rather, this letter is a new, prospective ruling which applies the findings in Midwest to the merchandise ruled upon in NYRL B88074. As such it governs any unliquidated or protested entries to which Midwest applies.

Sincerely,

John Durant, Director Commercial Rulings Division

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