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HQ 562339




April 1, 2002

CLA-2 RR:CR:SM 562339 TJM

CATEGORY: CLASSIFICATION

TARIFF NO: 9817.00.9800; 9810.00.45

Area Port Director

US Customs Service

112 West Stutsman
Pembina ND 58271

RE: AFR; Protest 3401-01-100013; Harlequin Costume & Dance Co.; GHY USA, Inc.; 9817.00.9800, HTSUS; 6204.43.4010, HTSUS; 9810.00.4500, HTSUS; costumes; Canada; regalia.

Dear Area Port Director:

The above-referenced protest was forwarded to this office for further review. We have considered the evidence provided, and the points raised by your office and the protestant. Our decision follows.

FACTS:

Harlequin Costume Company of Winnipeg, Canada, (“Harlequin”) manufactures costumes that are leased to theaters, opera companies, and educational institutions in the United States. These custom-made costumes are rented for temporary use, ranging from five to thirty days. Productions include Barber of Seville and Opera Dido and Anaeus. At the end of the rental, the renters return the costumes to Harlequin in Canada. The costumes are then restocked and incorporated into Harlequin’s inventory of shows. They are then available for rentals by others.

On February 14, 2001, the protestant, in responding to your office’s CF 28 (Request for Information), stated, in pertinent part, that:

. . . .Under the terms of rental they are required to ship them back to us within 2 to 3 days of the end of their production run, because we may have other rentals upcoming on some of the costumes for other customers. . . . Harlequin is not involved as the Manager or Proprietor of the performance. . . .No one from Harlequin accompanies the costumes to the U.S.

Your office issued a CF 29 (Notice of Action), informing the protestant that the entries would be rate advanced in consideration of the correct classification of the goods to be in subheading 6204.43.40, HTSUS. The entries were liquidated rate advanced on May 4, 2001. On May 23, 2001, The protestant through its customs broker, GHY USA, Inc., timely filed the protest with an application for further review.

This protest covers four entries as noted below.

Entry No.
Entry Date
Liquidation
Date
Protest Filed xxx-xxxxx27-3
09/25/00
05/04/01
05/23/01 xxx-xxxxx39-0
09/29/00
05/04/01
05/23/01 xxx-xxxxx64-7
10/20/00
05/04/01
05/23/01 xxx-xxxxx46-7
11/27/00
05/04/01
05/23/01

Renters of the articles of the above referenced entries include the Fargo Moorhead Civic Opera, the Music Department of the University of Memphis in Memphis, Tennessee, the Thalian Association of Wilmington, North Carolina, and the University of Colorado School of Music.

On August 30, 2001, the National Commodity Specialist Division provided an opinion on the applicable classification of the articles at issue in this protest.

ISSUE:

Whether the costumes described above qualify for the duty-free provision set forth in subheading 9817.00.9800, Harmonized Tariff Schedule of the United States (“HTSUS”), or alternatively in subheading 9810.00.45, HTSUS.

LAW AND ANALYSIS:

I. Standing and Timeliness

Pursuant to 19 C.F.R. § 174.12(e), protests must be filed within 90 days after the date of liquidation. In the instant case, the protest was filed within 90 days from the date of liquidation. Furthermore, pursuant to 19 C.F.R. § 174.12(a)(1), the protestant as the importer has standing to file this protest on a matter regarding classification and duty rate (See 19 C.F.R. § 174.11(b)).

Subheading 9817.00.9800

Subheading 9817.00.98, HTSUS, provides that “[t]heatrical scenery, properties, and apparel brought into the United States by proprietor or manager of theatrical, ballet, opera or similar productions arriving from abroad for temporary use by them in such production” will be free of duty.

For articles to be classified in subheading 9817.00.98, HTSUS, three basic requirements must be satisfied:

The imported goods must consist of theatrical scenery, properties, and apparel; The goods must be brought into the U.S. by proprietors or managers of theatrical, ballet, opera or similar productions; and The subject goods must be for temporary use in such production.

In Headquarters Rulings Letter (“HRL”) 561472, dated July 21, 2000, Customs ruled that the duty-free provision provided under subheading 9817.00.98, HTSUS, applied in that case where a Canadian theatrical production company temporarily imported scenery and apparel used for its shows in the United States.

In the instant case, based on the facts provided, the protestant does not meet the second criterion for classification in subheading 9817.00.98, HTSUS, which is that the qualified goods must be imported by proprietors or managers of theatrical, ballet, opera or similar productions arriving from abroad. In this case, and unlike HRL 561472, the protestant is the manufacturer and the lessor of costumes that are leased by proprietors or managers of the specified productions. The protestant concedes that it is not a proprietor or a manager of productions. Therefore, contrary to the requirements of subheading 9817.00.80, HTSUS, the apparel was not brought into the U.S. by a proprietor or manager of theatrical or similar productions.

Subheading 9810.00.45, HTSUS

Additionally, protestant makes an alternative claim that the apparels qualify as articles classifiable in subheading 9810.00.45, HTSUS, which provides for “[r]egalia imported for the use of any public library, any other public institution or any nonprofit institution established for education, scientific, literary or philosophical purposes, or for the encouragement of the fine arts.”

Note 1, Subchapter X, Chapter 98, HTSUS, states that “[e]xcept as provided in subheading 9810.00.20 and subheadings 9810.00.70, 9810.00.85, 9810.00.90 and 9810.00.95, or as otherwise provided for in this U.S. note, the articles covered by this subchapter must be exclusively for the use of the institutions involved, and not for distribution, sale or other commercial use within 5 years after being entered.” Further, Note 2, Subchapter X, Chapter 98, HTSUS, states that the term “regalia, as used in this subchapter, embraces only such insignia of rank or office, emblems or other articles as may be worn upon the person or borne in the hand during public exercises of the institution, and does not include articles of furniture or fixtures, nor regular wearing apparel, nor personal property of individuals.” (Emphasis added)

The two criteria that are important in the instant case in meeting the requirements of subheading 9810.00.45, HTSUS include whether the articles have commercial use and whether the articles qualify as regalia.

In defining these two requirements for item 851.30, Tariff Schedules of the United States (“TSUS”) (the precursor to subheading 9810.00.45, HTSUS), the U.S. Court of International Trade in Eaves-Brooks Costume Co., Inc. v. U.S., 699 F. Supp 317 (Ct. Int’l Trade 1988), noted in particular that:

While there is clearly some imprecision in the language of the statute, i.e., “commercial use” and “public exercises” are not defined, the Court is impelled by logic and past practice to reject both bases of plaintiff’s argument. Kentucky Opera is a non-profit organization, as evidenced by its Internal Revenue Service exemption, 26 U.S.C. § 501(c)(3), which, while admittedly not entirely dispositive of the issue, is persuasive. . . . As to whether or not the costumes constitute “Regalia” under the enumerated Tariff Schedule Item. . . .Dr. Robert W. Shuy, Ph.D., set forth twelve definitions of regalia. . .which were apparently extant, if not in common usage, during the period 1910 to approximately 1930, which was the period during which the tariff legislation under consideration initially was considered and enacted, including the “regalia” provisions. These definitions indicated that the term “regalia” originally referred to symbols of royalty, though its meaning has been expanded to include decorations or insignia of an order or office. According to plaintiff, these definitions show that during this period “regalia” did not include operatic and theatrical costumes. But this overlooks the ongoing evolution and etymological development of the language – and the modification of the regalia provisions since 1930. The opera costumes which are under discussion seem clearly to fall within the headnote provision: “The term ‘regalia’ as used in this part. . .embraces only such insignia of rank or office, emblems, or other articles as may be worn upon the person. (Emphasis added).

Eaves-Brooks Costume Co., Inc. v. U.S. at 319-20.

In regards to Note 1, Subchapter X, the costumes which are the subject of this protest were used by Fargo Moorhead Civic Opera, the Music Department of the University of Memphis in Memphis, Tennessee, the Thalian Association of Wilmington, North Carolina, and the University of Colorado School of Music. Assuming that the organizations that rented the costumes from the protestant are non-profit organizations with the purpose of furthering the fine arts or educating the public, it is our opinion that they meet the interpretation of the first prong test as articulated by the Court in the Eaves-Brooks Costumes Co.

As for the second requirement, the Court in Eaves-Brooks Costumes Co. also interpreted the word “regalia” under the terms of Note 2, Subchapter X. The Court noted that the word “regalia,” although originally meaning symbols of royalty has evolved to include opera costumes “worn upon the person.” In the instant case, the costumes worn by opera performers do not appear to be significantly dissimilar from the case before the Eaves-Brooks Costumes Co. Court.

Therefore, assuming the protestant is able to provide sufficient evidence of the non-profit status of the institutions that rented the costumes at issue, the protest should be granted on the grounds that the protestant’s alternative claim for classification of the articles in subheading 9810.00.45, HTSUS, has been met.

HOLDING:

For the foregoing reasons, the articles at issue do not meet the requirements of subheading 9817.00.98, HTSUS. However, assuming that the protestant can provide sufficient evidence that the renters of its costumes are non-profit educational institutions or non-profit organizations for the purpose of furthering the fine arts, the protest should be granted on the grounds that the articles meet the duty-free provision provided under subheading 9810.00.45, HTSUS.

This decision should be mailed by your office to the protestant no later than sixty days from the date of this letter. On that date, the Office of Regulations & Rulings will take steps to make the decision available to Customs Personnel and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act and other means of public distribution.

Sincerely,

John Durant
Director
Commercial Rulings Division

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