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HQ 961402




February 3, 1999

CLA-2 RR:CR:GC 961402 MMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9505.10.25

Port Director of Customs
300 South Ferry Street
Terminal Island, California 90731

RE: Protest 2704-97-102272; "Santa's Caroling Carousel"

Dear Port Director:

This is our decision on Protest 2704-97-102272, concerning your action in classifying and assessing duty on an article identified as Avon's "Santa's Caroling Carousel" under the Harmonized Tariff Schedule of the United States Annotated (HTSUS). The goods were entered in 1995 and the entries were liquidated on May 16 and June 6, 1997. The protest was timely filed on July 1, 1997.

FACTS:

The subject article is identified as a "Santa's Caroling Carousel." An electrically-powered switch on the carousel activates a mechanism that plays 21 Christmas carols, illuminates multicolored lighting, and animates various figures. Those figures include four "carousel horses," a small elephant and soldier, and a still smaller bear and "Santa Claus." The carousels are intended for indoor use. "Santa's Caroling Carousel" is advertized in a catalog issued 2 to 3 months prior to Christmas. The advertisement reads, in pertinent part:

It turns! It lights up! It plays 21 Christmas Carols!
carousel goes round and round canopy lights up
Santa and horses move up and down plays 21 of your favorite holiday songs- including: "We Wish You a Merry Christmas" "Joy to the World" "Rudolph the Red-Nosed Reindeer"

...a gift that will be treasured for years. 8 " high. Canopy, 5¬" diameter; base 4«"diameter.

ISSUE:

Whether the instant carousel is properly classified in heading 9505, HTSUS, as a festive article, in heading 9503, HTSUS, as other toys or in heading 8543, HTSUS, as other electrical machines and apparatus.

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 122 F.3d 1423 (Fed.Cir. 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." 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 "Santa's Caroling Carousel" 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 this 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 "Santa's Caroling Carousel" falls within the scope of the class, "festive articles." The physical appearance of the decoration, namely its songs and Santa Claus indicate its use with the Christmas holiday. Furthermore, both the environment of sale, for a limited number of months prior to the Christmas season in a catalog, together with the various statements made in its advertizing, 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 "Santa's Caroling Carousel" 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: [a]rticles for Christmas festivities and parts and accessories thereof: [c]hristmas ornaments: [o]ther." For classification of a similar article identified as "Christmas Magic Mainstreet" see Headquarters Ruling Letter (HRL) 960996 dated July 23, 1998.

HRL 959164, dated April 17, 1997, classified the identical article under heading 8543, HTSUS, as [e]lectrical machines and apparatus, having individual functions not specified or included elsewhere in this chapter; parts thereof, reasoning that the article was not classifiable as a festive article or a toy. 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 HRL 959164, that ruling was effectively revoked by Midwest. Since HRL 959164 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 decision which applies the findings in Midwest to the merchandise ruled upon in HRL 959164. As such it governs any unliquidated or protested entries to which Midwest applies.

HOLDING:

The protest should be ALLOWED. The "Santa's Caroling Carousel" 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: [a]rticles for Christmas festivities and parts and accessories thereof: [c]hristmas ornaments: [o]ther." The applicable rate of duty is free.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director Commercial Rulings Division

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