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HQ 965519




July 3, 2002

CLA2 RR:CR:GC 965519 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.90.00

Port Director of Customs
4735 Oakland St.
Denver, CO 80239

RE: Protest 330702100006; Plastic Insert Trays; Agricultural or Horticultural Purposes

Dear Port Director:

The following is our decision regarding Protest 330702100006, which concerns the classification of plastic insert trays under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise consists of certain plastic insert trays, which are placed inside boxes to hold and protect produce as it is transported to market. The protestant maintains that these trays are implements to be used for agricultural purposes because the trays are used by growers to protect the tomatoes in the packaging of the tomatoes from the field. The protestant asserts that the trays are made expressly for use as agricultural protective packaging. It is further stated that the State of Colorado recognizes that these trays are containers used by agricultural producers to deliver products to customers and are therefore not subject to state tax.

The merchandise was entered on April 4 and July 2, 2001, under heading 9817.00.50, HTSUS, as equipment and implements used for agricultural or horticultural purposes. The entries were liquidated on February 1 and January 25, 2002, under subheading 3923.90.00, HTSUS, as other plastic articles for the conveyance or packing of goods. The protest was timely filed on February 21, 2002.

The HTSUS provisions under consideration are as follows:

3923.90.00: Articles for the conveyance or packing of goods, of plastics; . . .: [o]ther....

Goods classifiable under this provision have a column one, general rate of duty of 3.0 percent ad valorem.

Machinery, equipment and implements to be used for agricultural or horticultural purposes....

Goods classifiable under this provision have a column one, general rate of duty of free.

ISSUE:

Does the plastic insert trays qualify for dutyfree entry as agricultural or horticultural implements, in Chapter 98, under the HTSUS?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRl's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Heading 9817.00.50, HTSUS, grants duty free treatment for "[m]achinery, equipment and implements to be used for agricultural or horticultural purposes...." This is an actual use provision. See HQ 083930 (May 19, 1989). To fall within this special classification, a threepart test must be met. First, the subject merchandise must not be excluded from the heading under Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2, HTSUS. Secondly, the terms of the headings must be met in accordance with GRI 1, which provides that classification is determined according to the terms of the headings and any relative section or chapter notes. Thirdly, the article must comply with the actual use provision required under section 10.131 through 10.139, Customs Regulations (19 CFR 10.131 through 10.139). See HQ 086883 (May 1, 1990); HQ 087076 (June 14, 1990); HQ 089936 (November 15, 1991).

The first part of the test is to determine whether the plastic trays are excluded from heading 9817.00.50, HTSUS. To do this we must first determine under which subheading the trays are classified. The trays are made of plastic and are designed so that they can be inserted inside boxes to hold and protect produce as it is transported to market. By application of GRI 1, the subject merchandise meets the terms of heading 3923, as plastic articles for the conveyance or packing of goods. It is specifically provided for in subheading 3923.90.00. This subheading is not excluded from classification in heading 9817.00.50, HTSUS, by operation of Section XXII, Chapter 98, Subchapter XVII, U.S. Note 2.

The second part of the test calls for the plastic insert trays to be included within the terms of heading 9r817.00.50, HTSUS, as required by GRI 1. The plastic insert trays must be "machinery", "equipment" or "implements" used for “agricultural or horticultural purposes”. InHQ 955597, dated May 31, 1994, Customs cited the Webster's II New Riverside University Dictionary (1988), for definitions of the terms machinery, equipment, implement, agriculture and horticulture as follows:

Machinery: 1. Machines or machine parts in general. 2. The working parts of a machine. 3. A system of related elements that operates in a definable way.

Equipment: 1. The act of equipping or state of being equipped. 2. Something with which one is equipped.1

Implement: 1. A tool, utensil, or instrument for doing a task. 2. An article used to outfit or equip.

Agriculture: The science, art, and business of cultivating the soil, producing crops, and raising livestock.

Horticulture: The science, art, and business of cultivating fruits, vegetables, flowers, and plants.

For this part of the test, the initial determination to be made is what agricultural or horticultural pursuit is in question. It is the importer's position that the plastic insert trays which protects produce while in transit meets the criteria for being an agricultural purpose. To support its position, the importer cites to NY 806110, dated February 16, 1995, in which Customs held that a ethylene vinyl acetate cow mat used as a cushion in the cow stall met the criteria for classification under heading 9817.00.50, HTSUS, because the maintenance of livestock is, per se, agricultural for tariff purposes. However, the plastic insert trays do not assist in the cultivating, producing or harvesting of crops. Instead, the plastic trays are used to facilitate the shipment of the produce from the fields to the market. Consequently, the plastic tray does not meet the second part of the test for classifying an item in heading 9817.00.50, HTSUS. We find that the plastic insert trays do not qualify for dutyfree entry as agricultural or horticultural implements in Chapter 98, under the HTSUS.

The importer also claims that the State of Colorado recognizes the use of the plastic insert trays in an agricultural pursuit by exempting it from the state sales tax and that should be sufficient for Customs purposes. However, as stated in HQ 952995, dated March 10, 1993, "it is well established that statutes, regulations and administrative interpretations [by other government agencies] relating to 'other than tariff purposes' are not determinative of customs classification disputes." Amersham Corp. v. United States, 5 CIT 49, 56, 564 F.Supp. 813 (1983). See also United States v. Mercantil Distribuidora. S.A., 43 CCPA 111, C.A.D. 617 (1956); Swift & Co. v. United States, 27 CCPA 181, C.A.D. 83 (1939). We believe that the proper issue here is whether the packing of produce for transport goes beyond the pursuit of agriculture. As discussed above, we find that the plastic insert trays used for packaging of produce for transport and sale to the markets does not assist in the agricultural pursuit. It is therefore ineligible for dutyfree entry.

HOLDING:

The subject merchandise is classifiable under subheading 3923.90.00, which provides for: "[a]rticles for the conveyance or packing of goods, of plastics; . . .: [o]ther . . . .” Goods classifiable under this provision have a column one, general rate of duty of 3.0 percent ad valorem.

The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division


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