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HQ 962488




December 15, 1999

CLA-2 RR:CR:GC 962488 JGB

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.29.0000; 4602.10.0900; 4805.60.9040; 4823.90.8500; 9502; 9503; 9505.90.40; 9801.00.1097

Mr. Frank Gomez
World Exchange, Inc.
6011 Avion Drive, Suite 201
Los Angeles, CA 90045

RE: Easter Baskets, imported full; Festive Articles; Midwest of Cannon Falls, Inc. v. United States

Dear Mr. Gomez:

This is in response to your letter of November 21, 1998, to the Customs National Commodity Specialist Division, New York, on behalf of Mega Toys, Inc., in which you request a ruling, under the Harmonized Tariff Schedule of the United States (HTSUS), on Easter Baskets imported full.

Your letter was referred to this office for reply. We regret the delay in providing this response.

FACTS:

You have requested a ruling on the entire line of Easter baskets, imported full, and have provided a catalog from 1999 picturing and describing on 48 pages the entire merchandise line. There are 142 full baskets pictured and described. All of them contain packages or boxes of candy, such as “M & M’s,” “Twix,” “Runts” and “Butterfingers.” All of the baskets contain toys as they might be prepared for retail sale, ranging from plush rabbits to toy trucks to kitchen play sets. Eleven of the articles contain dolls in addition to candy. Ten of those with dolls also contain toys.

The baskets are woven bamboo with a circular handle which is not affixed to the body of the basket. The baskets contain shredded paper that is known as “Easter grass.” A piece of paper for stuffing rests under the grass and serves to push the toys and dolls to a visible position in the package. A printed cardboard insert fills the space outlined by the circular handle. The insert states “Happy Easter.” The whole article is wrapped in clear polypropylene.

The articles are said to be associated with and will only be displayed and used during the Easter celebration.

ISSUE:

Whether the filled Easter baskets are classified in heading 9505, HTSUS, as festive articles, or elsewhere.

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). 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 GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI.

In Midwest of Cannon Falls, Inc. v. United States, Slip Op. 96-19 (Ct. Int’l Trade, 1996), aff’d in part, rev’d in part, 122 F.3d 1423, Appeal Nos. 96-1271, 96-1279 (Fed. Cir. 1997) (hereinafter Midwest), the Court addressed the scope of heading 9505, HTSUS, specifically the class or kind of merchandise termed “festive articles,” and provided new guidelines for classification of such goods in the heading. In general, merchandise is classifiable as a festive article in heading 9505, HTSUS, 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.

Based upon a review of the articles subject to the Midwest decision, Customs is of the opinion that the Court has included within the scope of the class “festive articles,” decorative household articles which are representations of an accepted symbol for a recognized holiday, and utilitarian/functional articles that are three-dimensional representations of an accepted symbol for a recognized holiday. See Customs Bulletin, Volume 32, Numbers 2/3, dated January 21, 1998.

In addition to the criteria listed above, the Court considered 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, with respect to decorative and utilitarian articles related to holidays and symbols not specifically recognized in Midwest or in the Customs Bulletin dated January 21, 1998, Customs will also consider the general criteria set forth in Carborundum to determine whether a particular good belongs to the class or kind “festive articles.” Those criteria include the general physical characteristics of the article, the expectation of the ultimate purchaser, the channels of trade, the environment of sale (accompanying accessories, manner of advertisement and display), the 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.

In considering the Midwest standards, none of the articles is predominately of precious or semiprecious stones, precious metal or metal clad with precious metal. Also, the merchandise presents the principal question of whether the articles are decorative or functional, and if so, do they present a recognized symbol of a three dimensional figure. Only the Easter Basket and the grass appear to be functional in that the basket provides a base for the display and the grass provides a small degree of protective packing. The candies, toys, and dolls have different uses in that they are eaten, played with, and looked at and/or played with, respectively. They have in common the characteristic that they are given as Easter gifts to children. In this sense, a functional vs. decorative determination is not relevant to the analysis. Inasmuch as the Easter basket is a gift package containing a variety of goods, it may be decoratively packaged, but it is not per se a decoration. Because it is opened immediately when given, it serves as nothing more than a vehicle for presenting gifts. The basket and grass alone function to hold the gifts. The third criterion would appear to be met, in part, in that the entire package would be associated with and used on the particular holiday of Easter.

As to the analysis of the Carborundum standards, the physical characteristics of the merchandise in the case of the toys, the candy, and the dolls, is exactly the same as it would be if the individual items were sold on their own. Nothing is changed as to their identity by putting them in the basket and covering it with the polypropylene. Since they were not festive articles before inclusion in the basket, they do not become festive articles after inclusion. The basket is within the class of baskets commonly used for packaging articles put up for retail sale, often as hostess gifts or generalized gifts. Common examples of the use of the basket would be to package cheese and canned meats or sausages; boxes of dry tea, teapots, teacups, and related tea implements; cosmetics and toiletries; kitchen implements and preserved food delicacies or for fruit baskets delivered by florist shops. Therefore, there appears no distinguishing characteristic of the basket, standing alone, to dedicate its use to the celebration of a particular holiday.

The expectation of the ultimate purchaser would be to give the article as a gift, not to decorate the home or to entertain in the home. The channels of trade and the environment of the sale of the Easter baskets would be toy and candy stores, drug stores, mass merchandisers, and department stores because the products contained in the baskets are in general the same things those stores sell all year around. The baskets sold full would only be sold in connection with Easter, however, and it is doubtful that a store would commit the labor to unpackage the baskets after Easter to sell the components individually. This probability does not negate the fact that this article, the full Easter basket, is used principally as means of presenting gifts of a non-holiday character to children at Easter. With that understanding, it is analogous to the wrapped packages commonly placed under Christmas trees in connection with a Christmas holiday celebration. The gifts are not classifiable as festive articles, even though they are given on a recognized holiday. They do not acquire festive status because they are placed under a Christmas tree (even thought the tree, if artificial, would be considered a festive article for tariff purposes). They are, instead, simply gifts that are not used as home decorations.

Heading 9505, HTSUS provides for “Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof.” In considering a claim of classification in heading 9505, HTSUS, the only means would be classification as a set put up for retail sale. GRI 3 provides in pertinent part:

3. When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) 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 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.

(b) ... 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 EN’s to the GRI define sets as follows:

(X) For the purposes of this Rule, 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).

In the case of the instant goods, the components do not form a set put up for retail sale because the components have not been shown to have been put up to meet a particular need or carry out a specific activity. The candy and the toys are classified in different headings, because eating candy and playing with toys are two specific and unrelated activities. This merely emphasizes that the full Easter basket amounts to a collection of unrelated gifts, some toys, some food, and some dolls.

Inasmuch as the goods do not qualify as a festive article, as a whole, and do not qualify as a festive article set, they must be separately classified as follows:

The applicable heading for the toys is 9503, HTSUS, which provides for “Other toys; reduced-size (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof.”

The applicable subheading for the candy, if made in the United States and having been exported without being advanced in value or improved in condition, will be 9801.00.1097, HTSUS.

The applicable heading for the dolls is 9502, HTSUS, which provides for “Dolls representing only human beings and parts and accessories thereof.”

The applicable subheading for the cardboard insert will be 9505.90.4000, HTSUS, which provides for “Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Other: Confetti, paper spirals or streamers, party favors and noisemakers; parts and accessories thereof.”

The applicable subheading for the basket is 4602.10.0900, HTSUS, the provision for “Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601; articles of loofah: Of vegetable materials: Other baskets and bags, whether or not lined: Of bamboo: Other.”

The applicable subheading for the stuffing paper is 4805.60.9040, HTSUS, the provision for “Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in note 2 to this chapter: Other paper and paperboard, weighing 150 g/m2 or less: Other: Weighing over 30 g/m2, Other.”

The applicable subheading for the shredded paper or “Easter grass” is 4823.90.8500, HTSUS, the provision for “Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers: Other: Other.” See also New York Ruling Letter C86056, dated April 22, 1998, in which Easter grass made of synthetic (plastic) strips was ruled to be excluded from Chapter 95 by application of the EN’s to heading 9505, HTSUS. This note (c) to heading 9505, excludes “packaging of plastics or of paper, used during festivals (classified according to constituent material, for example, Chapter 39 or 48.)”

The applicable subheading for the polypropylene is 3923.29.0000, HTSUS, the provision for “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and Bags(including cones): Of other plastics.”

HOLDING:

The full Easter baskets are classifiable according to their individual components. The toys will be in heading 9503, HTSUS, the dolls will be in heading 9502, HTSUS.

The applicable subheading for the polypropylene is 3923.29.0000, HTSUS.

The applicable subheading for the basket is 4602.10.0900, HTSUS.

The applicable subheading for the stuffing paper is 4805.60.9040, HTSUS.

The applicable subheading for the shredded paper “Easter Grass” is 4823.90.8500, HTSUS.

The applicable subheading for the cardboard insert is 9503.90.4000, HTSUS.

The applicable subheading for the candy, if made in the United States and having been exported without being advanced in value or improved in condition, will be 9801.00.1097, HTSUS.

Sincerely,


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