HQ 961465 - Protest 1104-97-100019; suncatchers; festive articles; Christmas ornaments; Nativity scenes; ornaments of plastics; ornaments of base metal; essential character; composite good; GRIs 3(b); U.S. Additional Note 1(a); ENs 70.06; 70.09; Rule 3(b)(IX); Rule 3(b)(X); Better Home Plastics Corp. v. United States; Midwest of Cannon Falls, Inc. v. United States; United States v. Carborundum Company; HQs 086166; 087894; 951460; 951909 - United States International Trade Commision Rulings

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HQ 961465

September 22, 1998

CLA-2 RR:CR:GC 961465 PH

CATEGORY: CLASSIFICATION

TARIFF NO.: 3926.40.00; 8306.29.00; 9505.10.25; 9505.10.30

Port Director
U.S. Customs Service
Post Office 12445
Pittsburgh International Airport
Pittsburgh, PA 15231-0445

RE: Protest 1104-97-100019; suncatchers; festive articles; Christmas ornaments; Nativity scenes; ornaments of plastics; ornaments of base metal; essential character; composite good; GRIs 3(b); U.S. Additional Note 1(a); ENs 70.06; 70.09; Rule 3(b)(IX); Rule 3(b)(X); Better Home Plastics Corp. v. United States; Midwest of Cannon Falls, Inc. v. United States; United States v. Carborundum Company; HQs 086166; 087894; 951460; 951909

Dear Port Director:

This is our decision on protest 1104-97-100019, against your classification under the Harmonized Tariff Schedule of the United States (HTSUS) of certain "suncatchers." Samples were provided.

FACTS:

Three entries are protested. As you correctly note, the protest was filed more than 90 days after liquidation of the June 3, 1997, entry and must be DENIED as to that entry. A second entry, dated May 28, 1997, was ultimately liquidated duty-free and, in any case, was liquidated after the filing of the protest so the protest is also untimely as to this liquidation (see 19 U.S.C. 1514(c)(3)(A)). This ruling addresses only the entry timely protested (the October 7, 1997, entry).

The entry was filed on October 7, 1997, with classification in subheadings 8306.29.99 and 9505.10.25, HTSUS. The entry was liquidated on November 14, 1997, with classification in subheading 3926.40.00, HTSUS. The importer's broker filed this protest with Customs on December 2, 1997, claiming classification in subheading 9505.10.25, HTSUS, for "suncatchers" claimed to be festive in nature and sold only in the two months prior to a holiday and, for non-festive "suncatchers," in subheading 8306.29.00, HTSUS, on the basis of the relative cost of the components of the merchandise.

The samples consist of one item with a bird motif, another with a flower and butterfly motif, and two items with the words "Merry" and "Christmas". The following articles are claimed to be festive in nature:

INVOICE # DESCRIPTION

63B "Merry Christmas"
67B Wreath
68B Candy Canes
70B Poinsettia
301B Santa
302B Christmas Balls, Holly
303B Manger
304B Christmas Tree
314B Sleigh Scene
318B Santa
319B Santa
320B Nativity

Each of the samples is framed throughout with metal and inlaid with epoxy (some with clear colors, others with opaque epoxy). According to the cost breakdown provided, the cost attributable to the metal frame of the "suncatchers" is approximately 70% of the cost of the whole and that of the epoxy component is approximately 12% of the whole (the remainder is attributable to packing and profit).

The HTSUS subheadings under consideration are as follows:

3926.40.00 Other articles of plastics and articles of other materials of headings 3901 to 3914: ... Statuettes and other ornamental articles.

The 1997 general column one rate of duty for goods classifiable under this provision is 5.3% ad valorem.

8306.29.00 Bells, gongs and the like, nonelectric, of base metal; statuettes and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal; and base metal parts thereof: ... Statuettes and other ornaments, and parts thereof: ... Other.

The 1997 general column one rate of duty for goods classifiable under this provision is 2% ad valorem.

9505.10 Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof.

Goods classified under subheading 9505.10 receive duty-free treatment.

ISSUE:

Whether the "suncatchers" are classifiable as other ornamental articles of plastics in subheading 3926.40.00, HTSUS, other ornaments of base metal in subheading 8306.29.00, HTSUS, or festive articles in subheading 9505.10, 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), 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.

In regard to the "suncatchers" purported to be festive articles, we note Midwest of Cannon Falls, Inc. v. United States, 20 CIT ___, Slip Op. 96-19 (January 19, 1996); affirmed in part, reversed in part 122 F.3d 1423 (Fed. Cir. (T) 1997). In this case, 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." All of the articles were found to be classifiable as "festive." This case resulted in 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 (1976). 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 "suncatchers" have no precious or semi-precious stones, metals or metal clad with precious metal. They function primarily as decorations 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 hanging decorations or decorations which may be attached to a window or other surface are, in general, articles which may be of a class or kind of decoration considered a "festive article" for tariff purposes. We note that several of the "suncatchers" incorporate symbols (Santa, wreath, sleigh scene) specifically recognized as festive in Midwest. Application of the Carborundum factors indicates that the other "suncatchers" fall within the scope of the class, "festive articles." The physical appearance of the articles, namely as decorative candy canes, poinsettia, Christmas balls with holly, a manger, and the Nativity scene, indicate their use with the Christmas holiday. According to the available evidence, the articles are offered for sale and purchased only before and during the Christmas season. Finally, the "suncatchers" are used in the same manner as merchandise which defines the class, in that they are decorations which incorporate various symbols of a recognized holiday season.

Based on this analysis, Customs is of the opinion that the "Merry Christmas", candy canes, poinsettia, Christmas balls with holly, manger, Christmas tree, and Nativity "suncatchers" are principally used as "festive articles." As stated above, the Santa, wreath, and sleigh scene "suncatchers" incorporate symbols specifically recognized as festive in Midwest. Accordingly, items 63B, 67B, 68B, 70B, 301B, 302B, 303B, 304B, 314B, 318B, 319B, and 320B are classifiable as festive articles under heading 9505, with the Nativity and manger items classified in subheading 9505.10.30, HTSUS (see HQ 087894 dated December 4, 1990), and the remaining items in subheading 9505.10.25, HTSUS.

In regard to the remaining "suncatchers" (i.e., those with a non-festive motif), we note that the components of the "suncatchers" make up a composite good (see EN Rule 3(b)(IX), "[f]or purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole ..."). The components of the "suncatchers" are, prima facie, classifiable under different headings. Therefore, under GRI 3(b), classification of the "suncatchers" 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). These cases have looked primarily to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See, Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed 119 F.3d 969 (Fed. Cir. 1997); 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 article is to "catch" the sun and illuminate the illustration in the "suncatcher." Since the epoxy or plastic is the component that "catches" the sun to illuminate the illustration in the "suncatcher," this criterion indicates that the essential character of the good is provided by that component. Insofar as the other factors (quantity, bulk, weight, and value) are concerned, the available evidence is not definitive (i.e., although value appears to support the metal component as providing the essential character, and weight may do so, bulk and quantity appear to be indeterminate). In view of the Court decisions giving great weight to the role of the components in relation to the use of the goods, we conclude that the essential character of the merchandise is provided by the epoxy or plastic component so that, under GRI 3(b), the non-festive "suncatchers" are classifiable in subheading 3926.40.00, HTSUS. This is consistent with past rulings of this office (see, e.g., Headquarters Ruling Letters (HQs) 086166 dated April 9, 1990, 951909 dated September 29, 1992, and 951460 dated January 11, 1993).

HOLDINGS:

(1) Items 63B, 67B, 68B, 70B, 301B, 302B, 303B, 304B, 314B, 318B, 319B, and 320B are classifiable as festive articles under heading 9505, with the Nativity and manger items classified in subheading 9505.10.30, HTSUS, and the remaining items in subheading 9505.10.25, HTSUS.

(2) The remaining "suncatchers" are classified as other ornamental articles of plastics in subheading 3926.40.00, HTSUS.

The protest is GRANTED in part (as to items 63B, 67B, 68B, 70B, 301B, 302B, 303B, 304B, 314B, 318B, 319B, and 320B in the October 7, 1997, entry) and DENIED in part (as to all other articles in the October 7, 1997, entry; and as to the May 28 and June 3, 1997, entries for which the protest is untimely). In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed, with the Customs Form 19, by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director,

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