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HQ 961234




July 30, 1998

CLA-2 RR:CR:GC 961234 PH

CATEGORY: CLASSIFICATION

TARIFF NO.: 9405.50.40

Arlen T. Epstein, Esq.
Serko & Simon L.L.P.
One World Trade Center, Suite 3371
New York, N.Y. 10048

RE: Glassware covered with glass beads; metal stand; tea light candles; candle holder; glassware for table, kitchen, toilet, office, indoor decoration; table, kitchen or other household articles of iron or steel; principal use; essential character; goods put up in sets for retail sale; U.S. Additional Note 1(a); GRI 3(b); ENs Rule 3(b)(VIII); Rule 3(b)(IX); Rule 3(b)(X); Better Home Plastics Corp. v. United States; HQ 961211

Dear Mr. Epstein:

This is in reference to your request on behalf of Russ Berrie and Company, Inc., to the Director, Customs National Commodity Specialist Division, New York, N.Y., dated October 30, 1997, for a ruling as to the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of bead-covered glassware and candles. Samples were provided. Your letter was referred to this office for reply. In preparing this decision, consideration was also given to your supplemental submission of December 8, 1997. We regret the delay.

FACTS:

The merchandise consists of the following:

Item 13991 - This article is a cylinder-shaped article of glassware (flat-bottomed with a slightly outward turned lip, 2 7/8" top diameter (including lip) and 2 5/8" in height. It fits in a metal stand 5" high and 3" in diameter with four legs. Around the top half of the stand (where the glassware fits) are strung pink beads.

Item 13992 - This article is a pumpkin-shaped (flat base, rounded sides, opening of the same width as the base) article of glassware, 3" top diameter, 4 1/4" diameter at mid-point, 3 3/4" in height. Around the glassware (not including the base or opening) are strung pink beads.

Item 13993 - This article is a pumpkin-shaped (flat base, rounded sides, opening of the same width as the base) article of glassware, 2 1/4" top diameter, 3 1/4" diameter at mid-point, 3" in height. Around the glassware (not including the base or opening) are strung pearl-colored beads.

Item 13994 - This article is a metal stand in a shape similar to that of a desk lamp with a cylinder-shaped holder of metal (1 3/4" in diameter and 3/4" in height) where the light bulb would be in such a lamp. The article is stated to have a glass container (not with sample) which, according to the illustrations accompanying your letter, would fit into this holder. Over the holder (with the top open) is a "lamp shade" strung with pink and pearl-colored beads.

In the case of each article, light from a candle inside the glassware and beads is diffused but visible. You state that a "votive" candle will accompany each article and that they will be imported packed for retail sale. We note that the sample candles, rather than being "votive"-style candles, are similar to tea-light candles, 1 1/2" in diameter and 3/4" in height and melted into a metal cylinder-shaped container.

You state that the beads in each article are of glass. You contend that classification should be on the basis of the beads, in that "the essential character of the [articles] is clearly imparted by the glass beads, which dominate all of the items in terms of visual effect and in the case of ... three ..., in terms of value." On this basis, you contend classification should be in subheading 7018.90.50, HTSUS.

The subheadings under consideration are as follows:

3406.00.00 Candles, tapers and the like.

The 1998 general column one rate of duty for goods classifiable under this provision is 1.2% 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.

7018.90.50 Glass beads ... and articles thereof other than imitation jewelry ...: ... Other: ... Other.

The 1998 general column one rate of duty for goods classifiable under this provision is 6.6% 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 beaded glass and metal articles with candles are classifiable as candles in subheading 3406.00.00, HTSUS, glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS, other glass beads and articles thereof in subheading 7018.90.50, 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, taken in order. Pursuant to GRI 3(b), goods which are prima facie classifiable under two or more headings shall be classified as if they consisted of the material or component which gives them their 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 ENs should always be consulted. See T.D. 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, 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 glass components of the articles under consideration are of the shape or form and within the dimensions for glassware which, based on the information obtained in response to the March 25, 1998, CUSTOMS BULLETIN, indicates their inclusion in the class or kind of goods principally used as candle holders. Additionally, the beaded covering provides, in the words of advertising literature for similar articles, "[a] dramatic display for candles[,]" also supporting principal use as candle holders. The articles (without candles) are classifiable as non-electrical lamps and lighting fittings in subheading 9405.50.40, HTSUS. See, e.g., Headquarters Ruling Letter (HQ) 961211 dated July 23, 1998. Because Note 1(e) of Chapter 70, HTSUS, provides that that chapter does not cover lamps or lighting fittings or parts thereof of heading 9405, the articles may not be classified as glass beads and articles thereof in subheading 7018.90.50, HTSUS, as you suggest.

The beaded articles are imported with candles. Assuming that the beaded articles and candles are packaged in a manner suitable for sale directly to users without repacking, they make up "goods put up in sets for retail sale" for purposes of GRI 3(b) (see EN Rule 3(b)(X)). Candles are classified as "[c]andles, tapers and the like" in subheading 3406.00.00, HTSUS. Therefore, the beaded articles and candles are, prima facie, classifiable under different headings. Under GRI 3(b), classification is determined on the basis of the component which provides the essential character. EN Rule 3(b)(VIII) lists as factors to help determine essential character 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 set and the roles of the components thereof are not conclusive. That is, the function of the candle is to provide light (and scent) and the role of the beaded glass and/or metal articles is to hold the candle. However, a candle is consumed as it is used, so that the beaded glass and/or metal article could continue to be used, whether to hold another candle or for some other use, after the candle is consumed.

The other factors listed in EN Rule 3(b)(VIII), however, may be used to establish essential character. Quantity is not conclusive (there is one of each component). The remaining factors (bulk, weight, and value) support the beaded glass and/or metal component as being determinative of essential character. In this regard, we note that for each article the values of the beads, glassware, and metal components (if applicable) are considerably greater than the value of the candles and 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 essential character is provided by the beaded glass and/or metal component. The articles are classified as non-electrical lamps and lighting fittings in subheading 9405.50.40, HTSUS.

HOLDING:

Each of the beaded glass and/or metal articles with candles are classified as other non-electrical lamps and lighting fittings in subheading 9405.50.40, HTSUS, provided that, in regard to classification of the candles as components of sets, the components are packaged in a manner suitable for sale directly to users without repacking.

Sincerely,

John Durant, Director

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