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HQ 961141




July 21, 1998

CLA-2 RR:CR:GC 961141 PH

CATEGORY: CLASSIFICATION

TARIFF NO.: 3307.90.00; 7013.99.50; 7323.99.90; 9405.50.40

Mr. William Velasquez
Import/Export Coordinator
Endar Corporation
43195 Business Park Drive
Temecula, California 92590-3697

RE: "Holiday potpourri gift set"; glassware with metal stand and potpourri; candle holder; glassware for table, kitchen, toilet, office, indoor decoration; principal use; essential character; composite good; goods put up in sets for retail sale; GRI 3(b); U.S. Additional Note 1(a); ENs Rule 3(b)(VIII); Rule 3(b)(X); Better Home Plastics Corp. v. U.S.; HQs 089470; 951126; 955857; 956810; 957794; 960962; 961095; NY A80401; B87765; 818540; 888716

Dear Mr. Velasquez:

This is in reference to your request to the Area Director of Customs, New York, N.Y., dated August 18, 1997, requesting reconsideration of New York Ruling Letter (NY) B87765 dated August 6, 1997, concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a "holiday potpourri gift set". A sample was provided. Your letter was referred to this office for reply. We regret the delay.

In your letter, you make a number of arguments as to the proper classification of the merchandise. These arguments, including the contention that the merchandise should be classified as other articles of glass in subheading 7020.00, HTSUS, were addressed at length in Headquarters Ruling Letter (HQ) 960962 dated July 15, 1998, in response to protest 2304-96-100344. The LAW AND ANALYSIS portion of HQ 960962 is incorporated by reference into this ruling for purposes of the same arguments made in your current letter. Also, in other submissions you have indicated that the potpourri and packaging of the set is of U.S. origin. As ruled in HQ 961095 dated July 20, 1998, if the potpourri and packaging are of U.S. origin, pursuant to U.S. Note 1, Chapter 98, HTSUS (see also Superscope, Inc. v. United States, 13 CIT 997, 727 F. Supp. 629 (1989); Customs Service Decisions (CSDs) 89-26 and 90-66; and Treasury Decision (TD) 91-7), they may qualify for duty-free treatment under subheading 9801.00.10, HTSUS, assuming that the requirements of the subheading and the applicable regulations (see 19 CFR 10.1 et seq.) are met.

FACTS:

The merchandise consists of clear glassware, similar in shape to a pith helmet (rounded with a large rim), 5 7/8" in diameter, 2 3/8" in depth, with a 4 5/8" wide and 4 7/8" high metal stand into which the glassware fits and a package of potpourri, all packaged in a cardboard display box. The stand appears to be of coated iron or steel and consists of a ring onto which are attached three legs. The potpourri material consists of dried roses, leaves, and similar matter, wrapped in a cellophane package closed with a lace-like ribbon. The dimensions of the package are approximately 3" X 4" X 6". These articles are assembled in a cardboard display container (opened on top and in front, with cut-out portions into which the articles fit). The container is decorated with holly-like leaves and berries and its ends have a red, green, and gold plaid design. The container is labeled "HOLIDAY POTPOURRI GIFT SET".

In NY B87765 Customs determined the essential character of the glassware with metal stand and of the entire set to be provided by the glassware and classified the set as other glassware for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS.

The subheadings under consideration are as follows:

3307.90.00 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorizers, whether or not perfumed or having disinfectant properties: ... Other.

The 1998 general column one rate of duty for goods classifiable under this provision is 5.4% ad valorem.

7013.99.50 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018): ... Other glassware: ... Other: ... Other: ... Other: ... Valued over $0.30 but not over $3 each.

The 1998 general column one rate of duty for goods classifiable under this provision is 30% ad valorem.

7323.99.90 Table, kitchen or other household articles and parts thereof, of iron or steel; ...: Other: ... Other: ... Not coated or plated with precious metal: ... Other: ... Other.

The 1998 general column one rate of duty for goods classifiable under this provision is 3.4% ad valorem.

9405.50.40 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; ...: ... Non-electrical lamps and lighting fittings: ... Other: ... Other.

The 1998 general column one rate of duty for goods classifiable under this provision is 6.3% ad valorem.

ISSUE:

Whether the packaged glassware with metal stand and potpourri is classifiable as other preparations for perfuming or deodorizing rooms in subheading 3307.90.00, HTSUS, other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS, other table, kitchen or other household articles of iron or steel in subheading 7323.99.90, HTSUS, or other non-electrical lamps and lighting fittings in subheading 9405.50.40, HTSUS.

LAW AND ANALYSIS:

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. Pursuant to GRI 3(b), when goods are prima facie classifiable under two or more headings, classification shall be effected as follows:

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a) [by reference to the heading which provides the most specific description], shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

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. Customs believes the ENs should always be consulted. See TD 89-80, published in the Federal Register August 23, 1989 (54 FR 35127, 35128).

Subheadings 7013.99.50, 7323.99.90, and 9405.50.40, HTSUS, as applicable to the merchandise under consideration, are controlled by use (other than actual use) (see Group Italglass U.S.A., Inc. v. United States, 17 CIT 1177, 839 F. Supp. 866 (1993); E.M. Chemicals v. United States, 923 F. Supp. 202 (CIT 1996); Stewart-Warner Corp. v. United States, 3 Fed. Cir. (T) 20, 25, 748 F.2d 663 (1984)). In such provisions, articles are classifiable according to the use of the class or kind of goods to which the articles belong. If an article is classifiable according to the use of the class or kind of goods to which it belongs, Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that:

In the absence of special language or context which otherwise requires-- (a) 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.

In other words, the article's principal use in the U.S. at the time of importation determines whether it is classifiable within a particular class or kind (principal use is distinguished from actual use; a tariff classification controlled by the latter is satisfied only if such use is intended at the time of importation, the goods are so used and proof thereof is furnished within 3 years after the date the goods are entered (U.S. Additional Note 1(b); 19 CFR 10.131 - 10.139)).

The Courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, 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 Lenox Collections v. United States, 19 CIT 345, 347 (1995); Kraft, Inc, v. United States, 16 CIT 483 (1992), G. Heileman Brewing Co. v. United States, 14 CIT 614 (1990); and United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979 (1976).

This office recently has exhaustively reviewed the principal use of articles such as those under consideration (glassware in various forms contended to be principally used as candle holders). In the March 25, 1998, edition of the CUSTOMS BULLETIN, Volume 32, Number 12, page 32, Customs issued a notice under 19 U.S.C. 1625 proposing to modify or revoke two Headquarters and five New York ruling letters (including some of the rulings you cite, NYs A80401 dated March 7, 1996; 818540 dated February 23, 1996; and 888716 dated August 20, 1993) to classify the articles described therein as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99, HTSUS, instead of as candle holders in subheading 9405.50.40, HTSUS. The comments submitted in response to this notice provided considerable information regarding the "pertinent factors" (see above) related to the principal use of the class or kind of goods to which the goods considered in the proposed rulings belong. Based on this information, Customs has concluded that the class or kind for goods such as those under consideration is defined by the form or shape of the article (e.g., bell-shape, similar to bell-shape, flower pot shape, tulip or flower petal shape, cube or rectangle shape, disk shape, bowl shape, and other shapes) and its size. We have found there to be a clear distinction between glassware used as candle holders and that used for general indoor decoration based on the size of the articles, in the absence of other pertinent evidence or information. Glassware with an opening of 4 inches or less in diameter and a height or depth of 5 inches or less is used substantially more frequently as a candle holder than for any other purpose, according to the information we have obtained, and larger glassware is used substantially more frequently for general indoor decoration. See the July 15, 1998, edition of the CUSTOMS BULLETIN, Volume 32, Number 28, page 12, wherein the March 25, 1998, CUSTOMS BULLETIN notice was withdrawn.

The glassware component of the article under consideration is not of one of the above-described shapes or forms, and its diameter is in excess of those of the class or kind of articles we found to be principally used as candle holders in our analysis of the information received in response to the March 25, 1998, CUSTOMS BULLETIN notice. This also is consistent with the pertinent factors listed by the Courts for determining principal use (see above). That is, in regard to physical characteristics, the size of the opening and the relatively shallow depth make for easy, convenient access; for example, as illustrated in the literature provided by the protestant, the dimensions enable the articles to be used as potpourri scent dispensers (the wide opening relative to the shallow depth enables more potpourri to be "aired")). In regard to the other pertinent factors (expectation of ultimate purchasers; channels of trade; environment of sale; and usage, economic practicality of such usage, and recognition of the trade of such usage), the evidence obtained from the public in response to the March 25, 1998, CUSTOMS BULLETIN notice supports principal use of the glass component for indoor decoration and not as a candle holder.

The glassware and stand components of the merchandise, with the glassware shaped so that it cannot stand on its own (without being supported by the stand), make up a composite good (see, e.g., HQs 956810 dated November 28, 1994; 957794 dated October 2, 1995; and 960962, referred to above). The glassware and stand are, prima facie, classifiable under different headings (the glassware under heading 7013, HTSUS (see above); the stand under heading 7323, HTSUS). Therefore, under GRI 3(b), classification of the good is determined on the basis of the component which gives it its essential character. EN Rule 3(b)(VIII) lists as factors to help determine the essential character of such goods the nature of the materials or components, their bulk, quantity, weight or value, and the role of a constituent material in relation to the use of the goods.

Recently, there have been several Court decisions on "essential character" for purposes of GRI 3(b). Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed 119 F.3d 969 (Fed. Cir. 1997), involved the classification of shower curtain sets, consisting of an outer textile curtain, inner plastic magnetic liner, and plastic hooks. Customs had classified the sets on the basis of the textile curtain under the "default rule of GRI 3(c)", after determining that neither the relative specificity test nor the essential character test was applicable (119 F.3d at 971). The CIT found that the plastic liner performed the indispensable function of keeping water inside the shower and therefore held that the plastic liner imparted the essential character upon the set. In its decision affirming the CIT decision, the CAFC stated:

The [CIT] carefully considered all of the facts, and, after a reasoned balancing of all the facts, concluded that Better Home Plastics offered sufficient evidence and argument to overcome the presumption of correctness. The court concluded that the indispensable function of keeping water inside the shower along with the protective, privacy and decorative functions of the plastic liner, and the relatively low cost of the sets all combined to support the decision that the plastic liner provided the essential character of the sets. ... The court's decision did not rely solely, or even hinge, on the indispensability of the water-retaining function. The decision was substantially based on the importance of the other functions as well as the cost of the entire set. [119 F.3d at 971]

Other decisions in which the Court looked primarily to the role of the constituent material in relation to the use of the goods to determine essential character include Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), motion for rehearing and reconsideration denied, 994 F. Supp. 393 (CIT 1998), and Vista International Packaging Co., v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also, Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), in which the Court found that, although GRI 3(b) could not be applied, if a GRI 3(b) analysis were performed, the essential character would be based upon the composite good's function.

Based on the foregoing, we conclude that in an essential character analysis for purposes of GRI 3(b), the role of the constituent materials or components in relation to the use of the goods is generally of primary importance, but the other factors listed in EN Rule 3(b)(VIII) should also be considered, as applicable. In this case, the "indispensable function" (Better Home Plastics, supra) of the glassware and stand, used to determine the role of the constituent material or components in relation to the use of the goods, indicates that the essential character of the good is provided by the glassware component. That is, the "indispensable function" is holding or containing whatever is put in the good, whether candles, flowers, potpourri, or anything else. The component which performs that function is clearly the glass component (see, e.g., HQ 951126 dated May 12, 1992, explaining and distinguishing various rulings on the applicability of GRI 3(b) to articles of glass and metal). Insofar as the other factors (quantity, bulk, weight, and value) are concerned, there is no evidence contradicting the conclusion that the glassware provides the essential character of the good.

Accordingly, the composite good consisting of the glassware and stand is classifiable as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS. However, the glassware and stand, as imported, are packaged with the potpourri in a "holiday potpourri gift set." The potpourri, by itself, would be classifiable in subheading 3307.90.00, HTSUS (HQs 089470 dated August 27, 1991, and 955857 dated August 11, 1994). The glassware and metal stand, packed with the package of potpourri for sale, make up "goods put up in sets for retail sales" for purposes of GRI 3(b) (see EN Rule 3(b)(X)). The goods making up the set are, prima facie, classifiable under different headings. Therefore, under GRI 3(b), classification of the set is determined on the basis of the component which gives it its essential character (see above).

As stated above in regard to the Court decisions on "essential character", in an essential character analysis for purposes of GRI 3(b), the role of the constituent materials or components in relation to the use of the goods is generally of primary importance and the other factors listed in EN Rule 3(b)(VIII) should also be considered, as applicable. In this case, the "indispensable function" of the set and the roles of the components thereof are not conclusive. That is, the function of potpourri is to release scent and the role of the glassware and stand is to hold the potpourri. However, as illustrated by the materials you enclosed with your letter, the glassware and stand may also be used for other purposes, such as to hold a candle. By its nature, potpourri loses its ability to provide scent and is discarded and replaced. Thus, the glassware and stand component of the set could continue to be used, whether to hold potpourri or a candle or for some other use, after the potpourri is no longer usable (in this regard, we note that your company markets individual potpourri packages like that in the set).

The other factors listed in EN Rule 3(b)(VIII), however, may be used to establish essential character. Quantity is not relevant (i.e., there is one of each component). Although the bulk of the potpourri is approximately the same as that of the glassware and stand (in the sense of the space taken by each component), the weight and value (based on your statements regarding value in other submissions regarding similar articles) of the glassware and stand are considerably greater than those of the package of potpourri (we note that in both Better Home Plastics decisions, the Court took note of value as a factor in the determination of essential character (916 F. Supp. 1268; 119 F.3d at 971)). Accordingly, we conclude that the essential character of the set is provided by the glassware and stand. The set is classifiable as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS.

HOLDING:

The packaged glassware with metal stand and potpourri is classifiable as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS.

EFFECT ON OTHER RULINGS:

NY B87765 dated August 6, 1997, is AFFIRMED.

Sincerely,

John Durant, Director
Commercial Rulings Division

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