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HQ 965154




July 10, 2002

CLA-2 RR:CR:TE 965154 JFS

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.9026

Susan Kohn Ross, Esq.
5777 West Century Blvd.
Suite 520
Los Angeles, CA 90045-5659

RE: Request for Reconsideration of New York Ruling Letter G87491; Compact Disc Case With Outer Surface of Sheeting of Plastic; General Rule of Interpretation 3; Essential Character.

Dear Ms. Ross:

This is in response to your letter dated July 9, 2001, on behalf of Roundhouse Products, Inc., requesting reconsideration of New York Ruling Letter (NY) G87491, dated March 7, 2001, regarding classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of two compact disk (CD) carrying cases. Samples of the cases were provided with the request for reconsideration. This letter is to inform you that after review of the ruling, it has been determined that the classification in NY G87491 of the CD cases in subheading 4202.92.9026, HTSUSA, is correct.

FACTS:

Other than their sizes, the two CD cases are essentially identical. The smaller one, style CCAN24-Leopard, is a bi-fold case that measures approximately 16.25 cm in height and 36.5 cm in width. The interior has 24 sleeves to house CD’s. The outer surface is composed of two different materials. Approximately, 60% of the exterior is composed of polyvinyl chloride (PVC) plastic sheeting that simulates leather. The remaining 40% of the exterior of the case is composed of a man-made textile material simulating leopard fur that you state is known as “velboa.“

The interior or skeleton of the case is essentially a single solid molded plastic sheet. This sheet of plastic bends around, and is sewn to, the spine of the case. The exterior plastic sheeting and the textile material are sewn to the hard plastic skeleton. A layer of plastic foam adds cushioning between the exterior materials and the hard plastic skeleton. The case is secured on three sides by a zippered closure.

The larger case, style CCAN48-Leopard, is nearly identical to style CCAN24, except that it has sleeves to hold 48 CD’s. The case measures approximately 29.5 cm in width and 37 cm in length. Approximately 60% of the outer surface is composed of PVC plastic sheeting. The remaining 40% is composed of the “velboa” material.

In NY G87491, Customs determined that the textile imitation fur imparted the visual impact and the essential character, and classified the article under subheading 4202.92.9026, HTSUSA, which provides, in pertinent part, for:

Trunks, suitcases . . . holsters and similar containers; traveling bags . . . cutlery cases and similar containers . . . of sheeting of plastics, of textile materials. . . : Other: With outer surface of sheeting of plastic or of textile materials: Other: Other, With outer surface of textile materials: Other: Other.

The general column one rate of duty is 18.1 percent ad valorem and the textile category is 670.

You argue that the CD carrying cases should have been classified in subheading 4202.92.9050, HTSUSA, which provide, in pertinent part, for:

Trunks, suitcases . . . holsters and similar containers; traveling bags . . . cutlery cases and similar containers . . . of sheeting of plastics, of textile materials. . . : Other: With outer surface of sheeting of plastic or of textile materials: Other: Other, Other: Cases designed to protect and transport compact disks. . . .

This provision has the same rate of duty, 18.1 percent ad valorem, however, there are quota restrictions.

ISSUE:

Whether the CD cases are classifiable as having an outer surface of textile materials under subheading 4202.92.9026, HTSUSA, or as having an outer surface of sheeting of plastic under subheading 4202.92.9050.

LAW AND ANALYSIS:

Classification of imported merchandise under the Harmonized Tariff Schedule of the United States (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI’s). 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’s may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s) represent the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings). The EN’s facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI’s. While not legally binding, the EN’s represent the considered views of classification experts of the Harmonized System Committee. It has, therefore, been the practice of the Customs Service to follow the terms of the EN’s, when appropriate, when interpreting the HTSUSA. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).

You argue that Customs erred in classifying the CD cases under subheading 4202.92.9026, HTSUSA, “despite the fact that CD storage cases are specifically provided for under 4202.92.9050, HTSUS.” You then speculate as to why Customs classified the CD cases under subheading 4202.92.9026, HTSUSA, by stating:

We imagine the reason Customs selected 4202.92.9026, HTSUS, is the result of the misapplication of GRIs 1, 3 and 6 and reliance on rulings which are out-of-date due to changes in the Harmonized Tariff. For example, in HRL 953171 (1993) Customs found compact disc cases covered in textile to be properly classified under 4202.92.9020, HTSUS. However, that ruling never considered the eo nomine provision under 4202.92.9050, HTSUS, as it was not added to the tariff until 1997.

You further argue that your classification is correct because, (1) CD carrying cases are provided for eo nomine in the tariff, (2) relative specificity also mandates classification as CD carrying cases, and (3) the GRIs were misapplied.

These arguments fail by application of the GRI. GRI 6 provides:

For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis [meaning in generally the same manner, but are to be altered when necessary], to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.

Emphasis added. In pertinent part, Explanatory Notes (I) and (II) to GRI 6 state:

(I) Rules 1 to 5 above govern, mutatis mutandis, classification at subheading levels within the same heading.

(II) For the purposes of Rule 6, the following expressions have the meanings hereby assigned to them:

(a) "subheadings at the same level" : one-dash subheadings (level 1) or two-dash subheadings (level 2).

Thus, when considering the relative merits of two or more one-dash subheadings within a single heading in the context of Rule 3(a) [below], their specificity or kinship in relation to a given article is to be assessed solely on the basis of the texts of the competing one-dash subheadings. When the one-dash subheading that is most specific has been chosen and when that subheading is itself subdivided, then, and only then, shall the texts of the two-dash subheadings be taken into consideration for determining which two-dash subheading should be selected.

“[O]nly subheadings at the same level are comparable.” This means that it is necessary to compare the terms of the subheadings at each indentation before going on to consider competing subheadings at the next indentation. See, HQ 962592, dated Aril 9, 2001. In this case, the first comparison between subheadings occurs at the fifth indentation comparing a case “with outer surface of textile materials” to an “other” case.

Trunks, suitcases . . . holsters and similar containers; traveling bags . . . cutlery cases and similar containers . . . of sheeting of plastics, of textile materials. . . : Other:
With outer surface of sheeting of plastic or of textile materials: Other:
Other,
With outer surface of textile materials:
Other:
Of man-made fibers
. . .
Other:
Cases designed to protect and transport compact disks . . . . . . .

Having determined which subheadings to compare, GRI 3 mandates that, when "goods are, prima facie, classifiable under two or more headings," the merchandise in question must be classified pursuant to the heading providing the most specific description.

RI 3 (a) states: “The heading which provides the most specific description shall be preferred to headings providing a more general description.” Better Home Plastics Corp v. U.S., 20 C.I.T. 221, 222; 916 F. Supp. 1265, 1266 (1996). The term “Other” would appear to be less descriptive of the CD cases under consideration than the term “with outer surface of textile materials.” Contrary to your analysis, in order to get to the subheading that specifically provides “Cases designed to protect and transport compact disks,” one must first determine that the case has an outer surface of “Other” than textile materials.

Because the CD cases have an outer surface of more than one material, the proper analysis is whether their outer surface is of textile materials or of sheeting of plastic. GRI 2(b), HTSUSA, states, in part, that the classification of goods consisting of more than one material shall be according to the principles of GRI 3. Under GRI 3(b) if goods are composed of more than one material the goods are classified according to the material that imparts the essential character of the items. The Explanatory Notes to GRI 3(b) state in pertinent part as follows:

(VIII) The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

A determination as to the essential character of the outer surface of luggage and related products cannot be based solely on a physical measurement of the component materials of the outer surface. See Headquarters Ruling Letter (HQ) 081375, dated October 3, 1988, HQ 081374, dated August 8, 1988, HQ 081373, dated October 17, 1988, HQ 082332, dated February 21, 1989, HQ 084241, dated July 28, 1989, HQ 081224, dated September 26, 1989; HQ 955515, dated May 5, 1994, and HQ 958475, dated May 9, 1996. However, Customs has repeatedly stated that such a measurement is of paramount importance in determining the make-up of the exterior surface. See HQ 083175, HQ 081374, HQ 081373, HQ 082332, HQ 084241, and HQ 958475 (cited above). Customs has also stated that when viewing luggage and related products, the materials of the outer surface produce a visual impact that in many instances leaves little or no doubt as to what material gives the outer surface its essential character. See HQ 081375, HQ 081373, HQ 081374, HQ 082332, and HQ 958475 (cited above).

HQ 955515 (cited above), involved the classification of a tote bag made with an outer surface of both a clear vinyl plastic material and leather material. The leather material formed, in a multi-colored patchwork pattern, the bottom portion of the tote bag while the upper portion of the bag was made of the clear plastic. The outer surface area was approximately 60 percent plastic and 40 percent leather. However, Customs stated that the fact that one or the other material comprised a greater percentage of the surface area was not necessarily controlling. Customs noted that, while the plastic material provided the structure and utility, the leather material provided structure and aesthetic appeal. Thus, Customs found that neither the plastic material nor the leather material had been established as being sufficiently predominating to base a finding that either one imparted the essential character to the entire outer surface.

You argue that:

The structural protection and integrity of the cases come from the reinforced frame and plastic. Similarly, the protection of the CDs placed inside comes from the sturdy frame and PVC covering. In other words, the textile on which Customs attempts to place such great importance is in reality nothing more than ornamentation. In and of itself, it is too soft to give CDs any protection. Realistically, the textile must have a foam backing or the case fails its intended purpose.

This argument ignores the structure of the CD cases. All of the strength and protection afforded the contents of the cases comes from the molded plastic skeleton. Neither the textile material nor the plastic sheeting provide much, if any, protection to the CD’s inside the case. Both materials are little more than ornamentation.

In HQ 962022, dated June 6, 2001, Customs found a handbag made of matching portions of genuine and imitation leather to have an outer surface of leather. The back panel and the front of the full length and full width front flap consisted of genuine leather. The bottom, gussets, shoulder strap, front panel and underside of the front flap were of imitation leather, i.e., embossed cellular plastic sheeting. In that case, the visual impact imparted by the leather material gave the handbag its essential character. Customs reasoned that:

The purchaser of the instant handbag, however, does not select this particular handbag because of the plastic. The purchaser selects the instant handbag because it is the leather material which imparts the primary visible appeal and saleability to the bag. Although the outer surface area covered by plastic may exceed that covered by leather, the leather material is more visible. When viewing the handbag in the closed position, leather comprises the entire front and back of the purse while the plastic material only covers the sides, bottom and hidden gussets. Clearly, the two materials are not of equal importance and the leather material plays a primary role. Thus, the leather material is sufficiently predominating to base a finding that it imparts essential character to the entire outer surface.

In HQ 081224, dated September 26, 1989, Customs classified a portfolio made of leather and textile material. The portfolio had textile embellishments providing a “brocade” effect on both sides. Although the leather material predominated by surface area, Customs found that the essential character of the portfolio was imparted by the textile material. Customs explained that the textile panels distinguished the portfolio from other leather portfolios and were intended to attract customers. Customs stated that greater weight must be accorded to the visual and tactile characteristics of the textile fabric given the fact that the textile portions were intended to attract customers and provided a selling point. Similarly, although the textile material does not predominate by surface area on the instant CD case, it is the outstanding feature that is intended to attract customers and provides the primary selling point. Indeed, the “2001 Product Catalog” stresses the saleability provided by the fake fur exterior of the cases. The catalog states:

Animal prints have quickly grown from an emerging trend to a mainstream style. Add incremental CD wallet business by tapping into the customer who wouldn’t buy another black CD wallet, but has to have one in their favorite print. . . .

Emphasis added. Thus, Customs finds that the essential character of the CD cases is imparted by the textile material. See also HQ 084241, dated September 26, 1989 (essential character of evening bag covered with textile material and plastic beads was imparted by plastic beads because they were most clearly designed to appeal to the consumer).

In HQ 081375, dated October 3, 1988, Customs found that the essential character of handbags made of plastic or cotton with leather trim was supplied by the textile material or the plastic material. The impression given by the outer surfaces was predominantly textile or plastic. Although the leather provided aesthetic and functional qualities to the handbags, Customs stated that the presence of the leather was subsidiary to the presence of the textile or plastic which constituted the major portion of the handbags. See also HQ 081374 and HQ 081373 (cited above). In the instant case, the textile portion is more than mere trim; most of the front of the case is made from textile. It is important to note that the cases are designed to lay flat and be closed most of the time. Thus, the backs of the cases are rarely in view. Furthermore, the visual impact is that of the textile material, i.e., imitation leopard fur. Since the impression given by the outer surface is that of a leopard fur article, Customs finds that the essential character of the outer surface of the CD cases is imparted by the textile material.

HOLDING:

NY G87491 is affirmed. The CD carrying cases are classified in subheading 4202.92.9026, HTSUSA, textile category 670, which provides, in pertinent part, for “[t]runks, suitcasesand similar containers; traveling bags . . . toiletry bagstool bagsand similar containersof textile materials: Other: With outer surface of sheeting of plastic or of textile materials: Other: Other, With outer surface of textile materials: Other: Of man-made fibers.” The general column one rate of duty is 18.1 percent, ad valorem. There are no applicable quota/visa requirements for the products of World Trade Organization ("WTO") members. The textile category number above applies to merchandise produced in non-WTO countries

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office. The Status Report On Current Import Quotas (Restraint Levels) is also available on the Customs Electronic Bulletin Board (CEBB) which can be found on the U.S. Customs Service Website at www.customs.gov.

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

Sincerely,

John E Elkins, Chief, Textiles Classification Branch


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