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HQ 966596




July 25, 2003

CLA-2 RR:CR:TE 966596 KSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 6505.90.9060

Port Director
Customs and Border Protection
2nd and Chestnut Streets
Philadelphia, PA 19106

RE: Application for Further Review of Protest number 1101-03-100215; 19 CFR §174.21(b)

Dear Port Director:

This is in reply to the Application for Further Review of Protest (AFR) number 1101-03-100215, dated June 30, 2003, concerning the classification of “carnival hats” under the Harmonized Tariff Schedule of the United States (HTSUS). The goods were entered and excluded on June 16, 2003 and June 17, 2003. The protest of exclusion was filed on June 30, 2003. A catalog and samples of the articles at issue were submitted for our review.

Further review of the AFR is warranted pursuant to 19 C.F.R. §§174.24 and 174.25 as the issue presented herein involves questions of law or fact which have not been ruled upon by the Commissioner of Customs, or his designee or by the Customs courts.

FACTS:

The articles are identified in Protestant’s catalog as “novelty hats”, “light up”, “Viking and Indian” and “costume hats”. The individual hats are identified as follows:

Style Number
Description
19350
Carnival hat with 5 spires
19351
Viking with horns and long braid
19352
Chinese skull cap with long braids
19663
Black/silver carnival jester
19665
Carnival jester with horns and bells
19923
Giant horn hat
19928
Carnival hat – 4 arms and balls
19928
Fleece jester

We note that the invoice identifies two hats of different styles as 19928, however petitioner’s supplemental petition refers to styles 19928 and 19929. 18983
7 horn carnival hat with horns
19087
6 point carnival jester with bells
19722
Hamburger hat
19724
Light-up carnival hat with bells
19726
Moose hat
19860
4 point carnival tall hat with stars
20051
Parrot hat

All of the hats with the exception of styles 19350 and 19923 are made of a polyester velour, polyester felt, or polyester foam-backed fabric, or some combination thereof. Style 19350 and 19923 are made of cotton fabric. All but three of the subject hats are of knit construction. Three of the subject hats, styles 19350, 19923 and 19352 are of woven construction.

The protestant’s website states that its hats are “[t]he best selling novelty, souvenir, costume, and party hats and accessories.”

ISSUE:

Whether the novelty hats, “light up”, Viking and costume hats are classified in heading 9505, HTSUS, as carnival articles or in heading 6505, HTSUS, as hats and other headgear.

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. Chapter 65, HTSUS, covers headgear and parts thereof. Note 1(c) to chapter 65, HTSUS, states that "This chapter does not cover: Dolls' hats, other toy hats or carnival articles of chapter 95."

Although Explanatory Note 1(c) excludes toy hats and carnival articles, it does not similarly exclude festive and entertainment articles from its scope.

The Explanatory Notes further identify the class of goods covered by Chapter 65, HTSUS. They read in pertinent part:

With the exception of the articles listed below this Chapter covers hat-shapes, hat-forms, hat bodies and hoods, and hats and other headgear of all kinds, irrespective of the materials of which they are made and of their intended use (daily wear, theatre, disguise, protection, etc.).

This Chapter does not include:

Dolls’ hats, other toy hats or carnival articles (Chapter 95).

The samples at issue were classified under subheading 6505.90.6090, HTSUS, which provides for “[h]ats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed; hair-nets of any material, whether or not lined or trimmed.”

Protestant argues that the hats should be classified in subheading 9505.90.6000. Among other items, heading 9505, HTSUS, provides for festive, carnival or other entertainment articles.

Subheading 9505.90.6000, HTSUS, provides for “[f]estive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: [o]ther:[o]ther.”

The EN to heading 9505, HTSUS, state, in part, that the heading covers:

(A) Festive, carnival or other entertainment articles, which in view of their intended use are generally made of non-durable material. They include:

Decorations such as festoons, garlands, Chinese lanterns, etc., as well as various decorative articles made of paper, metal foil, glass fibre, etc., for Christmas trees (e.g., tinsel, stars, icicles), artificial snow, coloured balls, bells, lanterns, etc. Cake and other decorations (e.g., animals, flags) which are traditionally associated with a particular holiday are also classified here.

Articles traditionally used at Christmas festivities, e.g., artificial Christmas trees (these are sometimes of the folding type), nativity scenes, Christmas crackers, Christmas stockings, imitation yule logs.

Articles of fancy dress, e.g., masks, false ears and noses, wigs, false beards and moustaches (not being articles of postiche - heading 67.04), and paper hats. However, the heading excludes fancy dress of textile materials, of Chapter 61 or 62.

Throw-balls of paper or cotton-wool, paper streamers (carnival tape), cardboard trumpets, "blow-outs", confetti, carnival umbrellas, etc.

Protestant argues, in the alternative, that the hats should be classifiable as toy hats.

CBP has consistently classified novelty hats substantially similar to the hats at issue in subheading 6505.90, HTSUS. See, e.g., HQ 961728, dated April 8, 1999, HQ 962434, dated November 19, 1999, PD C89986, dated October 1, 1998, NY H86802, dated January 23, 2002 and NY I82388, dated June 27, 2002. In NY B85369, dated June 9, 1997, CBP classified novelty hats of 100% polyester tricot in heading 6505, HTSUS. In so doing, we indicated that hats classifiable in heading 9505, HTSUS, are those which qualify as a costume and are made of non-durable material and flimsy construction. Id. We acknowledge that witches and santa hats of durable material have been previously classified in heading 9505, HTSUS. See HQ 084288, dated July 6, 1989 and HQ 088410, dated April 18, 1991. However, we may reconsider the classification of these articles in heading 9505, HTSUS, in the future.

We note, however, that the aforementioned rulings have dealt with a determination of whether the hats were classifiable as festive articles of 9505, HTSUS, or headgear of heading 6505, HTSUS. In contrast to the cited rulings above, protestant alleges that the hats at issue are carnival hats which are excluded from Chapter 65, HTSUS, by Chapter Note 1(c). In support of protestant’s argument that the hats are properly classifiable in heading 9505, HTSUS, protestant has submitted as exhibits five letters from various purchasers stating protestant’s reputation in the amusement industry as a purveyor of quality amusing items for sale and distribution at carnivals, theme and amusement parks across the United States.

Upon further review of the EN for Chapter 65, HTSUS, we note that the only EN which references Chapter 95, HTSUS, is the EN for 6506, HTSUS. Heading 6506, HTSUS, applies to "Other headgear, whether or not lined or trimmed." The EN to heading 6506, HTSUS, indicates that the heading covers all hats and headgear not classified in the preceding headings of the chapter, or in chapters 63, 68, or 95. The EN suggests that the heading covers, in particular, “safety headgear (e.g., for sporting activities, military or firemen's helmets, motor-cyclists', miners' or construction workers' helmets), whether or not fitted with protective padding or, in the case of certain helmets, with microphones or earphones”. It also covers hats and headgear of rubber or plastics, leather or composition leather, furskin or artificial fur, feathers or artificial flowers or metal.

The specific exclusion of hats classifiable in Chapter 95, HTSUS, from heading 6506, HTSUS, raises the conclusive presumption that the omission of any further references to Chapter 95, HTSUS, within Chapter 65, HTSUS, was intentional. Expressio unius exclusio alterius.

Any doubt as to the meaning of “carnival articles”, as set forth in heading 9505, HTSUS, may be resolved by application of the doctrine of noscitur sociis. That doctrine provides that the meaning of the word “carnival articles”, as intended by Congress in that enumeration, may be gleaned by the meaning of other words with which they are associated. The EN’s clearly indicate that the articles contained therein are non-durable items used during a celebration (i.e., paper streamers, confetti, paper hats). The hats at issue are unlike any of the articles enumerated in the EN’s and are not the kind of carnival hats provided for in heading 9505, HTSUS.

Protestant further argues that inasmuch as heading 9505, HTSUS is generally regarded as a "use" provision, the principal use of the hats is for amusement. When the classification of an article is determined with reference to its principal use, Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that, in the absence of special language or context which otherwise requires, such use is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.

While Additional U.S. Rule of Interpretation 1(a), HTSUS, provides general criteria to discern the class or kind’s principal use, it does not provide specific criteria for individual tariff provisions. The courts have provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), 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. See Lenox Collections v. United States, 19 CIT 345, 347 (1995); Kraft, Inc, v. United States, 16 CIT 483 (1992), G. Heileman Brewing Co. v. United States, 14 CIT 614 (1990); and United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (1976).

In applying the preceding factors, protestant argues that the physical characteristics of the hats are designed to amuse and cannot be considered functional by virtue of their bold, oversized, outrageous nature; the ultimate consumer expects to be amused by the hats; the hats are bought and sold as carnival articles; the hats are sold through carnivals, amusement and theme parks; the hats are intended to be worn at the carnival and not worn again; the hats are relatively inexpensive; and, the hats are recognized in the trade as items dedicated primarily to that market.

Four letters submitted by protestant acknowledge that while the hats are primarily purchased during the summer months, the hats provide significant warmth causing the wearer to experience some discomfort. Protestant also states that the hats are not designed for long term use. Rather protestant states that the hats are intended to be worn while at the carnival only to be later stored as a memory of the visit. Protestant does not argue that the hats are non-durable as other goods classifiable in heading 9505, HTSUS, are generally.

The Explanatory Notes to Chapter 65, HTSUS, state that the chapter covers all hats irrespective of their use such as daily wear, theatre, disguise or protection. Indeed hats have many functions beyond and in addition to protection from the elements. Among those functions are as a sign of prestige and power, cultural and ethnic identity, religious affirmation, cultural traditions and beliefs or simply adornment. Moreover, as evidenced by protestant’s submissions, the subject hats have a utilitarian purpose of providing warmth in addition to any amusement. While the hats, with their comical and whimsical appearance, will be a source of enjoyment, humorous diversion and frivolous entertainment, the hats likely will not generate the same type of enjoyment and emotion one derives from actually playing with objects commonly thought of as articles whose primary purpose is amusement. Furthermore, we do not agree with protestant’s submission that the hats would be misplaced outside a carnival setting.

Although protestant asserts that the hats are bought and sold as carnival articles and are recognized as carnival articles, protestant’s customer lists evidence that many of its sales are not to amusement or theme parks. Moreover, protestant’s website states that it sells the best selling novelty, souvenir, costume, and party hats and accessories. Notably, the hats are not held out to be carnival or toy hats.

Furthermore, our review of competitors’ websites picture carnival hats as paper hats commonly associated with children’s birthday party hats and New Years Eve hats. See www.bargaingizmos.co.uk and www.harrogatefair.com.

Protestant has offered a thorough discussion in its submission of the history of carnivals and their metamorphosis into amusement parks as evidence that the hats are carnival articles. At this juncture we need not determine whether “amusement park” is synonomous with “carnival” as protestant has not demonstrated that the hats are carnival articles.

In essence, protestant is attempting to avert prior rulings which have classified substantially similar articles as headgear of heading 6505, HTSUS, by arguing that the classification of the hats at issue should be governed by general purchase of the hats by purveyors in the amusement industry. Protestant also tries to avert prior rulings by calling its hats “carnival” as opposed to “festive”. Carnival hats are not classifiable by the domain in which they may be sold. Although the channels of trade in which the merchandise moves is one factor which may be taken into consideration in determining the principal use of a good, it is not alone indicative evidence of the proper classification.

Protestant alternatively argues that the hats should be classified as toys of heading 9503. Heading 9503, HTSUS, applies to "other toys," i.e., all toys not specifically provided for in the other headings of chapter 95, HTSUS. Although the term "toy" is not defined in the tariff, the EN to chapter 95 indicates that a toy is an article designed for the amusement of children or adults. Additionally, the EN to chapter 95, HTSUS, indicates that certain toys (e.g., electric irons, sewing machines, musical instruments, etc.) may be capable of a limited "use," but they are generally distinguishable from their fully functional counterparts by their size and limited capacity. When an article has both the potential for amusement and utility, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utility purposes incidental to the amusement (See Ideal Toy Corp. v. United States, 78 Cust. Ct. 28, C.D. 4688 (1977)). As previously noted, the hats are not only amusing but also fully functional. Not all merchandise that amuses is properly classified in a toy provision. We also note that the hat is worn and not played with. It is designed to be worn on the head.

We are of the opinion that the hats are specifically provided for as hats of heading 6505, HTSUS, even if the decoration of the hats may prevent their use on more than an occasional basis. The hats remain objects used to wear upon the head of the purchaser. As such, they are not described by heading 9505, HTSUS, as a carnival article.

HOLDING:

The protest should be DENIED. Hat styles 19923 and 19350 are classified in subheading 6505.90.2060, the provision for which provides for “[h]ats and headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed: other: of cotton, flax or both: not knitted: [c]ertified hand-loomed and folklore products; and headwear of cotton, other.” The duty rate will be 7.6 percent ad valorem. The designated textile category code is 359.

Hat style 19352 is classified in subheading 6505.90.8090, HTSUS, which provides for "[h]ats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed: [o]ther: [o]f man-made fibers: [n]ot in part of braid, [o]ther: [o]ther: [o]ther." The duty rate will be 19 cents per kilogram + 6.9% ad valorem. The designated textile category code is 659.

The remaining hats are classified in subheading 6505.90.6090, HTSUS, the provision for “[h]ats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed: [o]ther: of man made fibers: [k]nitted or crocheted or made up from knitted or crocheted fabric: [n]ot in part of braid, [o]ther: [o]ther: [o]ther.” The duty rate will be 22 cents per kilogram plus 7.7% ad valorem. The designated textile category code is 659.

The designated textile and apparel category may be subdivided into parts. If so, the 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 your client check, close to the time of shipment, the Textile Status Report for Absolute Quotas, an issuance of CBP which is available on the CBP website at www.cbp.gov.

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

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, 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 in accordance with the decision must be accomplished prior to mailing the decision.

No later than sixty (60) days from the date of this decision, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other means of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division

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