HQ 961866 - Square-shaped glassware; cylinder-shaped glassware; drinking glass; floating candle; candle beads; candle holder; glassware for table, kitchen, toilet, office, indoor decoration; Antidumping Duty Order, case A-570-504; principal use; goods put up in sets for retail sales; incomplete or unfinished article; U.S. Additional Note 1(a); 3(b)(X); 34.06; Better Home Plastics Corp. v. United States; Sharp Microelectronics Technology, Inc. v. United States; HQs 951021; 953650; 956577; 957412; 958535; 961211; NYs A84085; B84356; B89261; C83554; 811735 - United States International Trade Commision Rulings

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HQ 961866

July 29, 1998

CLA-2 RR:CR:GC 961866 PH

CATEGORY: CLASSIFICATION

TARIFF NO.: 3406.00.00; 7013.29.10; 7013.99.50; 9405.50.40

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

RE: Square-shaped glassware; cylinder-shaped glassware; drinking glass; floating candle; candle beads; candle holder; glassware for table, kitchen, toilet, office, indoor decoration; Antidumping Duty Order, case A-570-504; principal use; goods put up in sets for retail sales; incomplete or unfinished article; U.S. Additional Note 1(a); 3(b)(X); 34.06; Better Home Plastics Corp. v. United States; Sharp Microelectronics Technology, Inc. v. United States; HQs 951021; 953650; 956577; 957412; 958535; 961211; NYs A84085; B84356; B89261; C83554; 811735

Dear Mr. Velasquez:

This is in reference to your request to the Customs office in San Pedro, California, dated May 5, 1997, for a ruling as to the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of certain articles of glass, floating candles, and candle beads. Samples were provided. Your letter was referred to this office for reply. We regret the delay.

FACTS:

The merchandise consists of the following:

Floating candle made in China (value stated to be $.50).

Gift set of three cylinder-shaped articles of glassware (plain clear glass, diameter of each 4" with height of 4", 6" and 8"); same gift set with one floating candle (value of gift set without candle stated to be $1.70; with candle - $2.20).

Square glassware of heavy green tinted glass, dimensions 3" X 3" X 3"; same with a package of wax beads and wick with a metal wick holder (value of glassware stated to be $.28; glassware and wax beads and wick - $.48).

Cylinder-shaped drinking glass (described as "D.O.F. [double old fashioned] empty candle holder"), 3 1/4" diameter and 3 1/2" in height; same with a package of wax beads and wick with a metal wick holder (value of glassware stated to be $.22; glassware and wax beads and wick - $.42).

You state that all of these articles are marketed as candle holders. The empty candle holders are marketed to consumers to create their own candles. The wax beads with wicks are for the consumers to choose their own color and fragrance.

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.

7013.29.10 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018): ... Drinking glasses, other than of glass-ceramics: ... Other: ... Other: ... Valued not over $0.30 each.

The 1998 general column one rate of duty for goods classifiable under this provision is 34.2% 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.

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.

ISSUES:

Whether the floating candle and gift sets consisting of various glassware with or without a floating candle or wax beads and a wick are classifiable as candles, tapers and the like in subheading 3406.00.00, HTSUS, other drinking glasses in subheading 7013.29.10, HTSUS, other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, 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. Under GRI 2(a), any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. 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).

"Candles, tapers and the like" are classified in subheading 3406.00.00, HTSUS. EN 34.06 provides that "[c]andles, tapers (including ball or coiled tapers), etc., are usually made of tallow, stearin, paraffin wax or other waxes [and] [t]he heading covers these goods whether or not coloured, perfumed, decorated, etc." The floating candles are classified in subheading 3406.00.00, HTSUS.

It is noted that "... scented or unscented petroleum wax candles made from petroleum wax and having fiber or paper-cored wicks[,] sold in the ... shapes [of] tapers, spirals and straight-sided dinner candles; rounds, columns, pillars, votives; and various wax filled containers" from the People's Republic of China and classified in subheading 3406.00.00, HTSUS, are subject to antidumping duties (Notice of Antidumping Duty Order: Petroleum Wax Candles from the People's Republic of China, Case A-570-504, Federal Register of August 28, 1986 (51 F.R. 30686). The floating candles are covered by this antidumping order.

The cylinder-shaped glassware without a candle is classified in either subheading 7013.99.50 or 9405.50.40, HTSUS. These subheadings, 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.

Two of the pieces in the gift set of three cylinder-shaped pieces of glassware (without floating candle) are larger than the glassware found to be principally used as candle holders. The diameter of the third item is of the largest size found to be so used. However, none of the items is of the above-described shapes or forms. The shapes or forms found to be principally used as candle holders are generally shapes or forms somehow particularly complementary to candles (e.g., the opening turns outward, so that it is large enough that the top of the glass, nearest to the candle flame, is not over-heated; or the form of the glassware by itself or in combination with other materials provides, in the words of advertising literature for such articles "[a] dramatic display for candles"). In this case, the glassware is of a simple cylinder shape, with no physical attributes making it particularly suited in some way to use as a candle holder. In regard to the other pertinent factors (other than physical characteristics), listed by the Courts for determining principal use (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 articles for indoor decoration and not as candle holders. The gift set of three pieces of cylinder-shaped glassware (without floating candle) is classifiable as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS.

The gift set of three pieces of cylinder-shaped glassware with a floating candle make up "goods put up in sets for retail sales" for purposes of GRI 3(b), assuming that the items are packaged in a manner suitable for sale directly to users without repacking (see EN Rule 3(b)(X)). The glassware and floating candle 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. 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 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 glassware is stated to be to hold the candle. However, as we have concluded in regard to the classification of the glassware, the glassware may also be used for other purposes. Further, a candle is consumed as it is used, so that the glassware component of the set could continue to be used, whether to hold another candle or for some other use, after the candle in the set is consumed.

The other factors listed in EN Rule 3(b)(VIII), however, may be used to establish essential character. Each of the factors (quantity, bulk, weight, and value) support the glassware as being determinative of essential character. In this regard, 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. The set is classifiable as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS.

Although the "double old fashioned" glassware (without wax beads and wick) is within the dimensions for glassware found in the March 25, 1998, CUSTOMS BULLETIN to be principally used as a candle holder, it is not of any of the above-described shapes or forms. Instead, its form or shape is that of an ordinary drinking glass, and it is described as such. The "double old fashioned" glassware (without wax beads) is classified as other drinking glasses valued not over $0.30 each in subheading 7013.29.10, HTSUS. This is consistent with past rulings (see, e.g., HQ 957412 dated August 1, 1995).

The 3" square glassware (without wax beads and wick) is 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 its inclusion in the class or kind of goods principally used as candle holders. It is classified as non-electrical lamps and lighting fittings in subheading 9405.50.40, HTSUS. See, e.g., HQ 961211 dated July 23, 1998.

The "double old fashioned" and 3" square glassware are also imported with a package of wax beads and wick with a metal wick holder. In this regard, we have ruled that articles similar to the package (wax powder with wicks packaged in individual plastic bags) are classified as candles in subheading 3406.00.00, HTSUS (see NYs A84085 dated September 13, 1996, and B84356 dated May 28, 1997). Classification of such articles as candles is pursuant to GRI 2(a), in that although the articles are incomplete or unfinished, they have the essential character of candles in their condition as presented (see Sharp Microelectronics Technology, Inc. v. United States, 932 F. Supp. 1499, 1504-1505 (CIT 1996), affirmed 122 F.3d 1446 (1997)). Since the function or use of a candle is to give light by burning (see, e.g., Webster's New World Dictionary, 3d College Ed. (1988) "candle ... 1 a cylindrical mass of tallow or wax with a wick through its center, which gives light when burned"), and since in its condition as presented, the merchandise consists of all of the material necessary to make a candle and the material may be made into a candle by a very simple process (placement of the wax beads in the container around the wick and warming to melt the wax), we conclude that the packages of wax beads and wick are properly classifiable in subheading 3406.00.00, HTSUS, as incomplete or unfinished candles.

Customs treatment of candles melted into a glass or other container is distinguished from the treatment of candles imported in a set with glassware. A candle melted in a glass jar or other container is classified as a candle in subheading 3406.00.00, HTSUS, provided that the container is relatively inexpensive (see HQs 951021 dated April 9, 1992, 956577 dated April 17, 1995, and 958535 dated December 4, 1995; see also NYs 811735 dated January 13, 1997, and B89261 dated October 10, 1997).

Accordingly, under GRIs 2(a) and 3(b), we conclude that the "double old fashioned" and 3" square glassware imported with the package of wax beads and wick is classified as candles, tapers and the like in subheading 3406.00.00, HTSUS. To be so classified, the articles, as imported, must be packaged in a manner suitable for sale directly to users without repacking (see EN Rule 3(b)(X)). This is consistent with NY C83554 issued to you on March 11, 1998.

HOLDINGS:

(1) The floating candles from the People's Republic of China are classified as candles, tapers and the like in subheading 3406.00.00, HTSUS, and are subject to antidumping duties (Federal Register of August 28, 1996 (51 F.R. 30686)).

(2) The gift sets consisting of cylinder-shaped glassware with or without the floating candle are classified as other glassware of a kind used for indoor decoration or similar purposes in subheading 7013.99.50, HTSUS.

(3) The 3" square glassware without the package of wax beads and wick is classified as other non-electrical lamps and lighting fittings in subheading 9405.50.40, HTSUS.

(4) The "double old fashioned" glassware without the package of wax beads and wick is classified as other drinking glasses in subheading 7013.29.10, HTSUS.

(5) The 3" square and the "double old fashioned" glassware with the package of wax beads and wick is classified as candles, tapers and the like in subheading 3406.00.00, HTSUS, provided that, as imported, the items are packaged in a manner suitable for sale directly to users without repacking.

Sincerely,

John Durant, Director

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