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HQ 962140




December 15, 1998
CLA-2 RR:CR:TE 962140 jb

CATEGORY: CLASSIFICATION

TARIFF NO.: 6307.90.9989

Arlen T. Epstein, Esq.
Serko & Simon LLP
One World Trade Center, Suite 3371
New York, NY 10048

RE: Classification and country of origin determination for "Hat Boxes"; 19 CFR
?102.21(c)(5); last country in which an important assembly or manufacturing process occurs

Dear Mr. Epstein:

This is in reply to your letter dated October 6, 1997, on behalf of your client, Russ Berrie and Company Inc., requesting classification under the Harmonized Tariff Schedule of the United States (HTSUS), and country of origin determinations for certain hat boxes. Samples were submitted to this office for examination and will be returned under separate cover.

FACTS:

The submitted merchandise consists of two styles of hat boxes described by you as follows:

Style 17066A is in a cylindrical shape, measuring approximately nine inches in diameter and five inches in height, and is composed of cardboard covered by fabric. The article features a braided textile carrying cord whose ends are threaded through grommeted holes on either side of the box. A tassel is attached to either end of the carrying cord. The box has a removable lid which is covered on the outside with jacquard woven tapestry fabric (and on the inside is covered with the same satin acetate as the box interior) and is additionally decorated by textile trimming which has been glued along the lip of the lid and encircles the box; the lid also features a tassel attached at the center of the box. The top of the lid has been padded with a batting which you state consists of a blend of cotton and polyester. The outer cylindrical body of the box is covered with 100 percent polyester ottoman woven fabric, and the bottom of the exterior of the box and the complete interior of the box, including the bottom and walls of the interior of the box, are covered with satin woven fabric made of 100 percent acetate.

Style 17066B is also in a cylindrical shape, measuring approximately eight inches in diameter and 4.5 inches in height, and is composed of cardboard covered by fabric. The article features a braided textile carrying cord whose ends are threaded through grommeted holes on either side of the box. A tassel is attached to either end of the carrying cord. The box has a removable lid which is covered with two triangular panels of cotton/polyester jacquard woven tapestry fabric and two triangular panels of a woven ribbed fabric (and on the inside is covered with the same satin acetate as the box interior) and is additionally decorated by textile trimming which has been glued along the lip of the lid and encircles the box; the lid also features a tassel attached at the center of the box. The top of the lid has been padded with a plastic foam material. The outer cylindrical body of the box is covered with 100 percent polyester ottoman woven fabric, and the bottom of the exterior of the box and the complete interior of the box, including the bottom and walls of the interior of the box, are covered with satin woven fabric made of 100 percent acetate.

Close examination of the submitted samples reveals that there are a few inconsistencies in the data you have provided. Although you state that the lid fabric for style 10766B is tapestry fabric, examination shows that the lid top is a combination of 50 percent jacquard woven tapestry fabric and 50 percent woven ribbed fabric similar to the ottoman fabric on the box body, but with a smaller rib. In addition, although you state that the sponge filling for style 10766B is made of 45 percent polyester and 55 percent cotton, this is not accurate since sponge filler is not a "fabric" but a cellular plastic.

For the purposes of this ruling request we will assume that the fabrics specified for this merchandise originate in the countries you have indicated. If any of the facts stated above are not accurate, or have changed, you should contact this office with the relevant information.

The manufacturing process for this merchandise is as follows:

Korea polyester ottoman woven fabric is formed acetate satin woven fabric is formed

China cardboard, polyester tassel and polyester trimming are produced jacquard woven tapestry fabric is woven all fabric is cut into component pieces assembly by gluing and sewing stuffing material (batting for Style 17066A and cellular plastic for Style 17066B) are sourced

ISSUE:

1. What is the proper classification for the submitted merchandise?

2. What is the country of origin of the subject merchandise?

LAW AND ANALYSIS:

Classification

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation. GRI 1 requires that classification be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied, in the order of their appearance.

The competing classification provisions for this merchandise are headings 4202, 6307, and 4823, HTSUS. Heading 6307, HTSUS, provides for other made up articles, a basket provision for textile articles which are not more specifically provided for elsewhere in the tariff. Heading 4202, HTSUS, provides for, trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper. Heading 4823, HTSUS, provides for, among other things, paperboard. The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN) to heading 4202, HTSUS, state, in pertinent part:

Subject to Notes 1 and 2 to this Chapter, the articles covered by the first part of the heading may be of any material. The expression "similar containers" in the first part includes hat boxes, camera accessory cases, cartridge pouches, sheathes for hunting or camping knives, portable tool boxes or cases, specially shaped or internally fitted to contain particular tools with or without their accessories, etc.

In Totes Inc., v. United States, 18 C.I.T. 919, 865 F. Supp. 867, (1994), aff'd,
69 F. 3d 495 (Fed. Cir. 1995), the Court of International Trade concluded that the "essential characteristics and purpose of the Heading 4202 exemplars are...to organize, store, protect and carry various items." The Court also ruled that by virtue of ejusdem generis the residual provision for "similar containers" in heading 4202, HTSUS, is to be broadly construed. Although the term "hat boxes" is mentioned in the EN to heading 4202, HTSUS, one must first ascertain the precise meaning of a "hat box" and thus whether the subject merchandise fits within the parameters of "hat boxes" as intended by the EN.

In Headquarters Ruling Letter (HQ) 082565, dated February 13, 1990, hat boxes almost identical to the subject merchandise were classified in heading 6307, HTSUS. The rationale in that ruling stated:

Our examination of the sample goods, the terms of the heading, and the Explanatory Note have led us to the determination that the items classified within heading 4202, HTSUSA, are of the variety used in travel and the transportation of other items. In contrast, the sample merchandise is more suited to the storage of hats in the home, since it lacks the strength and features, such as locks or clasps, ordinarily found on the enumerated items of Heading 4202, HTSUSA. As a result, we are of the opinion that the hat boxes in this case are not classifiable within the anticipated scope of Heading 4202, HTSUSA.

Similarly, in HQ 086320, dated April 18, 1990, paper covered hat boxes were precluded from classification in heading 4202, HTSUS, because they were found to lack strength and features, (as for example, locks or clasps) ordinarily associated with hat boxes. Although the court in Totes de-emphasized the need for items of heading 4202, HTSUS, to be suitable for travel, the court did note that the items enumerated in that heading should serve to "organize, store, protect and carry various items." In that respect, the submitted merchandise, referred to as "hat boxes", do not fit within the parameter of "hat boxes" as intended by the EN to heading 4202, HTSUS. They are simple or generic lidded boxes which appear to be designed for storage for a variety of articles in the home. Upon examination these boxes also appear to be too small to adequately or comfortably fit the dimensions of an average sized hat. As such, the term "hat box" seems to be a misnomer. These boxes are similar to a number of other "all purpose", smaller trinket boxes ruled upon by Customs in the past (See, e.g., HQ 961169, dated February 18, 1998; HQ 086109, dated April 11, 1990). As such, the subject merchandise is not classified in heading 4202, HTSUS.

The subject merchandise is composed of both cardboard and textile materials. General Rule of Interpretation 3 states:

(b) 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.

The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN) for GRI 3(b) state that some of the factors that may be considered in determining which material provides the essential character to a composite good include bulk, quantity, weight, and the role of the material in relation to the use of the product. In this case, the principle materials are cardboard and textile fabric. As such, the competing provisions for this merchandise are heading 4823, HTSUS, which provides for other articles of paperboard, and heading 6307, HTSUS, which provides for other made up textile articles.

As was stated in HQ 953393, dated April 16, 1993, classifying similar merchandise:

In this case, the textile fabrics enhance the marketability of the box and distinguish it from ordinary, unadorned boxes. On the other hand, the cardboard components lend the article its structure and form. In HRL 952566 and HRL 087367, we issued rulings with respect to similar textile covered cardboard boxes. In those instances, we concluded that the cardboard and textile materials each contributed substantially to the final product. Hence, we were unable to determine which material imparted the essential character to the completed boxes. We see no reason to deviate from this precedent in this case.

Similarly, in the case of the subject merchandise, as we cannot accurately determine a classification based on GRI 3(b), we proceed to GRI 3(c) which states:

When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

Accordingly, as between headings 4823 and 6307, HTSUS, the latter is the applicable heading occurring last in numerical order.

Country of origin

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section."

Paragraph (e) states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:"

6307.90 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

The subject merchandise is classifiable in subheading 6307.90, HTSUS. As the fabric comprising this merchandise is not formed in a single country, the terms of section 102.21(c)(2) are not met.

Paragraph (c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:"

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As the subject merchandise is not knit to shape and subheading 6307.90, HTSUS, is excepted from provision (ii), paragraph (c)(3) is inapplicable.

Paragraph (c)(4) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred." In the case of the subject merchandise, the most important manufacturing operation occurs at the time of the fabric formation. As the fabric formation for this merchandise occurs in more than one country, and no one fabric can be
considered more important in this case, as each contributes equally to the good as a whole, the country of origin cannot be readily determined based on the fabric making process. As such, paragraph (c)(4) is not applicable.

Paragraph (c)(5) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred. Accordingly, in the case of the subject merchandise, the last country in which an important assembly operation occurs is China.

HOLDING:

The subject merchandise, referenced styles 17066A and 17066B, is classified in subheading 6307.90.9989, which provides for other made up articles, including dress patterns: other: other: other: other: other. The applicable general column one rate of duty is 7 percent ad valorem.

The country of origin of the subject fabric covered hat boxes is China.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, your client should contact the local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

Sincerely,

John Durant, Director
Commercial Rulings Division

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