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HQ 965573




August 28, 2002

CLA-2 RR:CR:TE 965573 JFS

CATEGORY: CLASSIFICATION

TARIFF NO.: 6111.20.6040

Mr. John M. Peterson
Neville Peterson
80 Broad Street, 34th Floor
New York, NY 10004

RE: Tariff Classification of Clear Plastic Box; GRI 5(b)

Dear Mr. Peterson:

This is in response to your request for internal advice, dated April 9, 2002, on behalf of your client, Gold, Inc., requesting classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a clear plastic box imported with its contents, knit baby booties.

You also made a claim for treatment under 19 U.S.C. §1625(c)(2). To substantiate a claim for treatment under 19 U.S.C. §1625(c)(2), Customs requires evidence of a consistent classification treatment by it on identical or substantially identical transactions. On August 12, 2002, we sent to you, via facsimile and by U.S. Mail, a letter informing you of the information required to file a claim for treatment. We informed you that if you did not provide the required information by August 26, 2002, that your treatment claim would be denied without prejudice. As of the date of this ruling letter, you have not provided the required information. Accordingly, your treatment claim is denied without prejudice.

FACTS:

The article under consideration is described as a “momento” box. It is constructed of clear, hard molded plastic. The box is approximately 3 inches tall, 3 ¼ inches wide and 1 ¾ inches deep. It has a hinged top with a snap closure. There is a hinged plastic hook for display at retail. The box is imported with two knit baby booties inside. A light plastic shell is inserted into the booties, to fill them out and give them shape. A product description card containing product information about the booties is inside the box. ISSUE:

Is the clear plastic box classified on its own as a good of subheading 3923, HTSUSA, or is it classified, pursuant to GRI 5(b), in the same provision as the knit booties.

LAW AND ANALYSIS

Classification under the 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 may then be applied. Pursuant to GRI 5:

In addition to the foregoing [GRI’s], the following rules shall apply in respect of the goods referred to therein:

Camera cases, musical instruments, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and entered with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential character.

Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

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 HTSUS 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 HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989). The EN for GRI 5(b) state:

This rule governs the classification of packing materials and packing containers of a kind normally used for packing the goods to which they relate[;] [h]owever, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use, for example, certain metal drums or containers of iron or steel for compressed or liquefied gas [and because] [t]his Rule is subject to Rule 5(a) ... the classification of cases, boxes and similar containers of the kind mentioned in Rule 5(a) shall be determined by the application of that rule."

Emphasis added. Thus, in accordance with GRI 5(b), if the container under consideration is not of a kind “normally” used for packing its contents, or if it is “clearly suitable for repetitive use,” it will be classified separately from its contents.

The leading Court case on the issue of whether a container is suitable for reuse is Holly Stores, Inc. v. United States, 2 CIT 278, 534 F. Supp. 818 (1981), affirmed 1 Fed. Cir. (T.) 16, 69 F.2d 1387 (1982).

Holly Stores involved the applicability of the tariff schedule preceding the HTSUS, the Tariff Schedules of the United States (TSUS). However, Customs has taken the position that the interpretation in Holly Stores of the TSUS provision corresponding to GRI 5(b) of the HTSUS is applicable to GRI 5(b) (see, e.g., Headquarters Ruling (HQ) 084068 dated July 21, 1989; HQ 961973 dated August 13, 1999)). In Holly Stores, the CIT found that the caveat that GRI 5(b) is inapplicable when the packing materials or containers are “clearly suitable for repetitive use” applies only to reuse in the commercial sense. The CIT distinguished between internal use and commercial use, stating "[i]t is evident that witness [name omitted] contemplated a reuse ¼ only in the limited sense that K-Mart would internally reuse [the hanger involved] without reference to reuse in the commercial sense" (2 CIT at 290). The Court of Appeals for the Federal Circuit (CAFC) affirmed the CIT decision, stating that "[r]euse in this context has been consistently interpreted to mean practical, commercial reuse, not incidental reuse" (1 Fed. Cir. (T) at 17).

The issue, of when a container is considered “clearly suitable for repetitive use,” has been examined by Customs on several occasions. In HQ 962709, dated December 6, 1999, Customs found that there was no evidence that glass bottles packed with spices, oils and vinegars were suitable for repetitive use. In HQ 087298, dated June 28 1990, Customs found that a box of tinplated steel construction, designed to hold a bottle of scotch, was not designed for repetitive use. The instant article does not rise to the level of the tin boxes or glass bottles in terms of being suitable for repetitive use. Of primary concern is the plastic hinges and snap closure that are easily breakable and would not tolerate repetitive use. You argue that the instant case is similar to the jewelry presentation boxes that were the subject of HQ 734691, dated January 7, 1994. You mistakenly state that the presentation boxes were constructed of “clear plastic.” In fact, the three boxes were considered. All three of the boxes had interior and exterior coverings of vinyl and felt type material. However, the issue in HQ 734691, was whether the presentation boxes were “disposable,” and therefore not subject to country of origin marking requirements. Disposable was defined as “the usual ordinary type of containers or holders which are ordinarily discarded after the contents have been consumed (e.g., cans, bottles, paper bags, etc.).” The standard to be applied to determine if an article is “disposable” is different than that used to determine if an article is “clearly suitable for repetitive use.” Thus, while the analysis used to determine if the jewelry boxes are disposable may be helpful, it is not binding in this case. Moreover, the jewelry boxes in HQ 734691, had features such as felt type materials or vinyl-covered exteriors, and vinyl or satin covered interiors that clearly made them attractive and less likely to be discarded. Customs concluded that the boxes were durable and that it was likely that the boxes would be used by some consumers to store their purchase or other jewelry.

The instant clear plastic box is not “clearly designed for repetitive use.” Accordingly, we must determine if the box is of a kind “normally” used for packing goods such as those with which they are imported, in which case it is classifiable with those goods, pursuant to GRI 5(b). In Crystal Clear Industries v. United States, 18 CIT 47, 843 F. Supp. 721 (1994), the CIT applied GRI 5(b) to determine the classification of gift boxes for glassware. The Court concluded that: “Just because the gift boxes were an alternative marketing device from the plain corrugated paper does not and did not make them “unusual” in the market described by the witnesses.” id. In regard to the reference to an “alternative marketing device”, the Court had earlier noted arguments that “gift boxes were ordered during a trend, were much more expensive than plain boxes, were highly decorated, and increased the salability of the glassware.” Id. at 50. The Court noted “[t]his style of packaging and advertising was common during the period in question and not unusual in the same sense that a four-foot high wine bottle sold for marketing purposes is different from a normal 750 milliliter bottle [and] [s]imilarly, in contrast to a cigar box or a steel drum, the packaging was not valuable or reusable in its own right.” Id. at 54). (The reference to the four-foot high wine bottle in the preceding quotation is from Fontana Hollywood Corp. v. United States, 64 Cust. Ct. 204, C.D. 3981 (1970), in which the Court held that such a bottle was “unusual” and not classifiable with its contents).

Similarly, in this case, as “an alternative marketing device”, the clear plastic box is a means for the retailer to display the knit booties. The knit booties, being made for newborn infants, are very small. When they are filled out by means of the plastic shell inserts, their smallness is accentuated. The effect of displaying them in this manner is appealing to the consumer’s automatic instinct to note how the booties are so “cute.” The intended result is that the mother to be, or the grandmother to be, or the friend looking for a baby shower present will not be able to resist buying such “cute” little booties. You contend that the usual packaging for hosiery is polybags on header cards or in disposable cardboard boxes. However, much of the appeal of the booties is their visual appeal. It would be foolish to not display them in a manner that accentuates how tiny and cute they are. It is clear the design of the plastic box in combination with the plastic shells, is to display the booties in as favorable a light as possible. This is further evidenced by the plastic hook that allows the booties to be displayed on a retail fixture. You argue that the design of the clear plastic box is to allow the ultimate purchaser to keep the booties and to display them. We are not persuaded by your argument. While the box may be used to display the booties by the ultimate consumer, this use of the clear plastic box would be incidental to the intended use, i.e., to display the booties at retail.

You also argue that the instant cases are distinguishable from the clear plastic boxes used to import crayons that were considered in HQ 729943, dated November 13, 1986. However, it is not clear how the two boxes differ. In both cases the clear plastic containers act as a marketing device by displaying their contents. Neither of the containers are substantial enough for “substantial repetitive use.” If anything, HQ 729943 is on point and would tend to resolve the instant case without further analysis.

The plastic case may be more expensive or decorative than polybags on header cards. However, this does not make them “unusual” in the same sense as the four-foot high wine bottle of Fontana, supra. Nor do they have “significant” uses quite apart from their original contents, such as humidors filled with tobacco, miniature cedar chests containing cigars or candy, and dollhouses filled with confections (legislative history quoted from Crystal Clear, supra). The clear plastic boxes are of a kind “normally” used for packaging and marketing a line of goods, e.g., baby products, where the selling potential is increased by displaying the good itself. This is consistent with past rulings of this office such as HQ 962709, supra, (fancy glass bottles for oils and vinegars held to be usual packaging within GRI 5(b)); HQ 086874 dated June 28, 1990 (a metal liquor box considered “premium packaging” held to be a packing container within GRI 5(b)); and HQ 082955 dated May 29, 1992 (a ceramic flagon containing scotch whiskey held to be “a container ‘of a kind normally used for packing’ premium whiskies”). This is not inconsistent with HQ 959624 dated April 23, 1998, in which glass jars colorfully and attractively filled with levels of various seeds and spices, called “spice art” products, were classified separately from their contents.

Accordingly, pursuant to the above analysis, the clear plastic box, pursuant to GRI 5(b), is classified with its contents, knit booties.

HOLDING:

The clear plastic box is packing materials and is classified according to its contents, knit booties, under subheading 6111.20.6040, HTSUSA, which provides for Babies’ garments and clothing accessories, knitted or crocheted: Of cotton: Other: Other, Other: Other. The general column one rate of duty is 8.2 percent, ad valorem.

The textile quota category for merchandise classified in subheading 6111.20.6040, HTSUSA, is 239. There are no applicable quota or visa requirements for products of World Trade Organization (WTO) member-countries. The textile quota category above applies to merchandise produced in a country that is not a member of the WTO.

It is recommended that the importer contact its local Customs Service office prior to the importation of this merchandise from a non-WTO member-country to determine the current status of any restraints or requirements due to the changeable nature of the statistical annotation, the ninth and tenth digits of the HTSUSA, and the restraint (quota/visa) categories applicable to this textile merchandise.

The designated textile and apparel category may be subdivided into parts. If subdivided, the quota and visa requirements applicable to the merchandise may be affected. Since part categories are the result of international bilateral agreements and subject to frequent renegotiations and changes, to obtain the most current information available resort may be had, close to the time of shipment, to the Status Report on Current Import Quotas (Restraint Levels). The Status Report is an internal issuance of the U.S. Customs Service that is updated weekly. It is available for inspection at local Customs Service offices and on the Customs Electronic Bulletin Board (CEBB) at: www.customs.gov.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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