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HQ 960891




July 27, 1998

CLA-2 RR:CR:GC 960891 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 7013.39.20

Mr. David M. Murphy
Grunfeld, Desiderio, Lebowitz & Silverman LLP 245 Park Avenue, 33rd Floor
New York, New York 10167

RE: Silver-plated metal rack with Glass Mugs and Plates; NYRL B86984 affirmed

Dear Mr. Murphy:

This is in response to your August 26, 1997, letter on behalf of Syratech Corporation, requesting reconsideration of New York Ruling Letter (NYRL) B86984 dated July 10, 1997, which classified an article identified as a silver-plated metal rack with glass mugs and plates under subheading 7013.39.2000 of the Harmonized Tariff Schedule of the United States (HTSUS) which provides, in pertinent part for, [g]lassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018).

In a March 23, 1998, letter we inquired about an additional written explanation and supporting evidence indicating how the rack with glass mugs and plates met the factors outline 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). In a July 21, 1998, telephonic conference, with a member of my staff, you indicated that your August 26, 1997, letter contained all the available information on the product.

FACTS:

The subject article was identified as item 99119442 and consists of a 17 inch tall Christmas tree shaped silver-plated steel buffet rack, six 13-ounce glass mugs and six 7-inch diameter glass plates. Both the mugs and plates have a raised leaf and berry motif. The articles are packaged together in a specially printed box depicting the metal rack holding the plates and glasses.

ISSUE:

Whether the silver-plated metal rack with glass mugs and plates is classifiable as a glass set or a festive article.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

Heading 9505, HTSUS, provides for "[f]estive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof." 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 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 silver-plated metal rack with glass mugs and plates has no precious or semi-precious stones, and is not predominately of precious metal or metal clad with precious metal. Its only function is to hold mugs and plates and to hold food and beverages in or on those mugs and plates. Customs recognizes Christmas trees and holy berries and leaves as symbols associated with Christmas and Christmas as a festive holiday for tariff purposes. Furthermore, we recognize that some utilitarian articles may be of a class or kind of decoration considered a "festive article" for tariff purposes. Application of the Carborundum factors will determine whether this particular article belongs to the class.

The physical appearance of the silver-plated metal rack with glass mugs and plates, namely its Christmas tree shape and the holly berries and leaf motif indicate its possible use with the Christmas holiday. However, no evidence has been provided concerning the environment of sale, namely its limited availability during the holiday season or advertizing and marketing which would confirm such limited use. Without such information, use in the same manner as merchandise which defines the class as well as the expectation for the ultimate purchaser cannot be determined. Inasmuch as no information from which to determine that the article falls within the class "festive article" has been provided, the article cannot be classified as such.

You suggest that heading 7323, HTSUS, which provides for [t]able, kitchen or other household articles and parts thereof, or iron or steel; iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel, describes the rack. We disagree. Heading 7323, HTSUS, is a part of Section XV of the HTSUS. Note 1 (e) to Section XV, states that: " [t]his section does not cover: [g]oods of chapter 71 (for example, precious metal alloys, base metal clad with precious metal, imitation jewelry)." As the Christmas tree shaped rack is clad with silver, a precious metal, it is not described by heading 7323, HTSUS.

Heading 7013, HTSUS, provides for [g]lassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018) and describes the mugs and plates. Heading 7114, HTSUS, provides for [a]rticles of goldsmiths' or silversmiths' wares and parts thereof, of precious metal or of metal clad with precious metal, and describes the Christmas tree shaped rack. Inasmuch as the rack with glass mugs and plates is described by two headings, it cannot be classified according to GRI 1.

GRI 2(a) is inapplicable because it applies to incomplete or unfinished articles, and the rack with glass mugs and plates is imported in a finished complete condition. GRI 2(b) states, in pertinent part, that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. The classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3.

GRI 3(a) states that when, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. As the two remaining headings under consideration refer to part only of the rack with glass mugs and plates, GRI 3(b) must be considered.

GRI 3(b) states that 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), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. Since the subject goods consist of various items sold together as sets, we must first determine if, for tariff purposes, it is a set put up for retail sale as defined by GRI 3(b).

The Harmonized Commodity Description And Coding System Explanatory Notes (EN's) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN's 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 EN's should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).

Explanatory Note (X) to GRI 3(b), at page 5, states that the term "goods put up in sets for retail sale" shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings.

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).

We are of the opinion that the silver-plated metal rack and glass mugs and plates qualify as sets of GRI 3(b). The articles are, prima facie, classifiable in different headings. Moreover, the rack, mugs and plates are designed to be used together to carry out the specific activity of serving food; and, they are put up in a manner suitable for sale directly to users without repacking. Accordingly, we must determine whether the rack or the glass articles impart the essential character to the sets.

In general, essential character has been construed to mean that attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article. In addition, EN (VIII) to GRI 3(b), at page 4, states that the factor which help determine essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

We are of the opinion that glass mugs and plates impart the set's essential character. The mugs and plates are the articles used to serve food. As such, they perform the main function of the set; serving food. The glass articles are the most visually, structurally and functionally significant components of the sets, while the rack simply assist in the serving function. See Better Home Plastics Corp. v. United States, CIT Slip Op. 96-35 (1996), affirmed CAFC Appeal No. 96-1322 (1997) hereinafter (Better Home). Better Home concerned the classification of shower curtain sets. The sets consisted of an outer textile curtain, inner plastic magnetic liner, and plastic hooks. The Court compared the role of the constituent materials in relation to the use of the set and found that, even though the relative value of the textile curtain was greater than that of the plastic liner and the textile curtain also served protective, privacy and decorative functions, because the plastic liner performed the indispensable function of keeping water inside the shower, the plastic liner imparted the set's essential character. For a further discussion of sets containing silver-plated and glass food serving articles see, Headquarters Ruling Letters 960653 and 961039 dated July 1, 1998. The silver-plated metal rack and glass mugs and plates are classifiable under subheading 7013.39.20, HTSUS, as "[g]lassware of a kind used for table (other than drinking glasses) or kitchen purposes other than of glass-ceramics: [o]ther: [o]ther: [v]alued not over $3 each."

HOLDING:

The silver-plated metal rack and glass mugs and plates are classifiable under subheading 7013.39.20, HTSUS, as "[g]lassware of a kind used for table (other than drinking glasses) or kitchen purposes other than of glass-ceramics: [o]ther: [o]ther: [v]alued not over $3 each." The rate of duty is 27 percent ad valorem.

NYRL B86984 is affirmed.

Sincerely,

John Durant, Director
Commercial Rulings

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