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HQ 229863




February 10, 2004

HQ 229863 MK

LIQ- 9-01 RR:CR:DR
Category: PROTEST

Port Director
Bureau of Customs and Border Protection
477 Michigan Avenue
Room 210
Detroit, MI 48226

RE: Protest 3801-02-100324; 19 U.S.C. §1520(c)(1); Mistake of Fact; Incomplete information; HR 085766; plastic bear bottles.

Dear Port Director:

On March 5, 2003, Protest number 3801-02-100324 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:

According to the Customs Form (“CF”) 7501s, Parfums De Coeur LTD (“Parfums”), of Huntsville, Alabama, made three entries of “Plastics, Carboys, Bottles, Other” under the Harmonized Tariff Schedule United States (“HTSUS”) subheading 3923.30.0090 at a duty rate of 3%. Entry number xxxx287-6 was made on March 15, 2000, entry xxxx-866-7 was made on March 16, 2000, and entry xxx-742-9 was made on March 22, 2000. Parfums is protesting the denial of its 19 U.S.C. §1520 (c)(1) petition for reliquidation of these entries.

Two samples of the merchandise have been provided to this office. Both are plastic bear bottles approximately five inches in height and filled with scented lotion. The first bear is in a pink dress with a cub on either side holding a heart with “World’s Greatest Mom” printed on it. It is filled with scented lotion called “Fresh White Musk Fantasy.” The second bear is wearing a Santa hat and red mittens and is holding a gold glitter star. It contains scented lotion called “Raspberry Fantasy.” Both have labels on the back stating that, “Vanilla/ Raspberry Fantasy is normally available as Sheer Lotion SPRAY also in Fragrance Body Spray and Shower Gel. Enjoy Body Fantasies in fifteen invigorating fragrances.”

The file contains a series of invoices. The first set of invoices, on AIS International, Inc. letterhead and dated February 29, 2000, March 3, 2000, and March 8, 2000, identify the importer of record as Parfums de Coeur of Huntsville, Alabama, describe the relevant products as “M/Day Bear 9oz Lotion,” and state the particular scent of lotion (for example, pear, raspberry, freesia). The second set of invoices, on les emballages knowlton inc. letterhead and dated February 29, 2000, March 3, 2000, and March 8, 2000, state the products are sold and shipped to Parfums, also describe the products as “M/Day Bear, 9oz LTN,” and state the scent of each specific lotion. The final set of invoices, on Pafums de Coeur letterhead and dated March 1, 2000, March 3, 2000, and March 8, 2000, either describe the merchandise as “Plastic Bear Bottle” and “Plastic Bear Caps” or as “M/Day 9oz Bear Bottles”.

According to Customs Automated Commercial System (“ACS”), all three entries were liquidated as entered. Entry 742-9 and entry 866-7 were liquidated on January 19, 2001, and entry 287-6 was liquidated on January 12, 2001.

On January 8, 2002, Norman G. Jensen, Inc. (“Jensen”), of Port Huron, Michigan, the Customs Broker for Pafums, sent a letter to the Port Directors of the U.S. Customs Service at Port Huron, Michigan requesting re-liquidation of the subject entries due to a mistake of fact under 19 U.S.C. §1520(c)(1). The letter requests the entries be reclassified to HTSUS subchapter 9503.49.00 at a duty-free rate and a refund of duties paid because the importer was unaware of key features of the goods that affect the classification.

The file contains a February 26, 2002, denial for a request for relief under 19 U.S.C. §1520(c)(1) from the U.S. Customs Service in Detroit, Michigan to Jensen for entry xxx-287-6, which states the date of liquidation to be January 12, 2001 and January 19, 2001.

On May 24, 2002, the Protestant, Pafums, filed Protest number 3801-02-100324, against the denial of the request for reliquidation and for further review under 19 CFR 174.23. The protest and the application for further review were both denied on December 4, 2002.

On January 29, 2003, we received Parfums’s request to set aside the denial of further review under 19 U.S.C. 1515(c), and on February 11, 2003, this office, the Office of Regulations and Rulings of CBP, set aside the denial of the application for further review in accordance with 19 U.S.C. 1515(c).

On February 24, 2003, the Application for Further Review was approved and was forwarded to our office.

ISSUES:

1. Are the bottles classifiable as toys under subheading 9503.49, HTSUS?

2. Was there an error in the liquidation correctable per 19 U.S.C.§1520(c)(1)?

LAW & ANALYSIS:

Issue 1:

The protestant argues, based on our decision in Headquarters Ruling 085766, that the entered merchandise should be classified as “Other Toys” under HTSUS subheading 9503.

Per Jensen’s August 1, 2001, 19 U.S.C. §1520(c)(1) petition to U.S. Customs, Pafums was interested in entering the bottles and lotion together under one subheading of the Harmonized Tariff Schedule. Customs denied this petition and attached Headquarters Ruling number 085766. The Protestant states in its August 8, 2002 letter, that it was “advised by U.S. Customs via our petition 3802-0130-0379, and pursuant to HQ Ruling # 085766, these specific plastic containers had been deemed clearly suitable for repetitive use and are classifiable as toys under HTS item 9503.49.” Customs did not advise the Protestant that the merchandise was for repetitive use. Customs was asked to find the lotions and bottles classifiable as a single entry, which it could not. For explanation, Customs referred to Headquarters Ruing 085766, dated February 1, 1990. This ruling considered multiple issues, one of which was the proper classification of a bubble bath product entered in a container resembling a dinosaur caricature. The ruling found the bubble bath and the container classifiable separately under HTSUS. Independent of this analysis, the ruling classified that specific container as a toy. The ruling does not mean to imply that every time a lotion and a bottle are entered separately the container is automatically classifiable as a toy. In HR 085766, bubble bath in a plastic container designed to resemble a dinosaur was classified under subheading 9503.49.00, HTSUS, as a toy representing animals or non-human creatures. The protestant, in arguing the merchandise is a toy, relies on the shape of the bear bottles and likens them to the shape of the dinosaur bottles in the ruling.

The ruling however, considers two factors: the shape of the bottle and its contents. The shape of the bottle may have similarly been of an animal or non-human creature, but in the previous ruling we held the shape was to appeal to attract customers to be used as a play item for children.

Although nothing in heading 9503 or the relevant chapter notes explicitly states that an item's classification as a "toy" is dependent upon its use, the Court of International Trade has found inherent in various dictionary definitions of “toy” the notion that an object is a toy only if it is designed and used for amusement, diversion or play, rather than practicality. See Minnetonka Brands, Inc. v. United States, 110 F. Supp. 2d 1020, 1026 (CIT 2000). It has been Customs position that articles that normally would be classified elsewhere in the HTS may be classified as toys in heading 9503 when they are designed and used principally for amusement, diversion or play, rather than practicality or utility.

In the tariff context, “amuse” is mainly used in contrast to some utilitarian or functional quality, and the focus is whether an article is designed to amuse in the same way articles commonly thought of as toys do. See HQ 966046 (May 16, 2003) and HQ 963638 (November 2, 2001). Therefore, if the level of play value and amusement of the article is not sufficient to constitute its principal use, the article is not a toy. See United States v. Topps Chewing Gum, Inc., 440 F.2d 1384 (1973) The court in Topps concluded that although the articles had considerable amusement value, the fun or amusement that they provide is not "is essentially the same kind of frivolous enjoyment [that children] would derive from objects which we commonly think of as toys." Id. at 1385..

In HR 085766, after the contents were consumed, the dinosaur was to be refilled with bubble bath and continued to be used as a play item. The plastic containers in this case may have been designed to appeal to children so that they might be purchased for holidays for their parents or other adults, but there is no indication that the bottles are intended to be refilled and played with. The bear bottles have a hard, non-manipulative feel to them, no animation, and no moving parts. The outline of the container provides an entertaining way to hold and store lotion. In this regard, the bear bottles make the specific activity of applying lotion more attractive to the user. But this is a function, not an amusement. The bear bottles are not primarily designed to amuse or to have a toy or play value, but rather, to function as a novelty container for bath lotion. They are probably intended to attract the attention of a child to be purchased for an adult for a holiday (per the samples, Christmas and Mother’s Day).

The second factor HR 085766 considered was the contents of the plastic dinosaur. A child could reasonably be expected to use bubble bath and refill a bottle with more bubble bath to be played with in the bath. However the lotions in the bear bottles contain adult fragrances, such as the sample lotions: “Fresh White Musk Fantasy” and “Raspberry Fantasy.” The label on the back clearly advertises the other products sold by the company, including fragrance body spray and shower gel, presumably in non- bear containers. Considering that most children cannot take showers and do not use “fantasy” scented body spray, we conclude that the contents are not intended for children.

We find that the importer incorrectly relies on HR 085766, and that these bottles serve as packaging for adult body lotion and are neither designed nor intended for play. Therefore, we find that the plastic bear bottles are correctly classified in subheading 3923.30.00, HTSUS, as: “Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Carboys, bottles, flasks and similar articles.”

Issue 2:

Pafums has requested reliquidation of the subject entries per 19 U.S.C. § 1520(c). Section 520(c) of the Tariff Act of 1930, as codified at 19 U.S.C. § 1520(c), is an exception to the finality of §1514. Per 19 U.S.C. § 1520(c):
the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct-- (1) a clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in electronic transmission, not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction; . . . .

Therefore, per § 1520(c)(1) Customs may reliquidate the protested entries to correct “a clerical error, mistake of fact, or other inadvertence.” We have found that there is no mistake in the classification of the entered bottle, and therefore there is no mistake in the liquidation. Assuming, however, that the goods had been misclassified, we will address the second issue.

The Protestant contends that at entry it was “unaware of certain key features of these goods” and that therefore it mistakenly entered the goods under the wrong subheading of the Harmonized Tariff Schedule. It originally entered the goods under subchapter 3923.30.00, HTSUS for “Plastics, carboys, bottles, other.” Pafums states that “It was much later that our personnel was apprised by the apprising officer that specific characteristics of the bottles rendered them classifiable as toys.” Pafums then filed amended CF 7501s stating that the bottles were subchapter 9503.20.80, HTSUS for “other toys rep.” Pafums argues that it did not know the key features of the bottles because the invoices were unclear. Parfums does not further identify the key features of the bottles of which it was unaware. In total, nine invoices have been submitted and each described the merchandise as either “plastic bear bottle” or “M/Day Bear 9oz. Lotion.” If the shape of the bottle was one of unidentified key features, the entry invoices clearly describe the bottles as being on the shape of bears. Therefore, the Protestant’s assertion, that the invoices did not provide the necessary information as to the shape of the bottles, has not been shown.

The Protestant appears to be confusing a mistake of fact with a mistake of law: a mistake of fact occurs when a decision is based on a reasonable belief that a fact exists differently than in reality, and a mistake of law occurs when the legal consequences of a given set of facts are incorrectly interpreted or anticipated (C.J. Tower & Sons of Buffalo, Inc. v. United States, 336 F. Supp. 1395 (Cust. Ct. 1972) aff’d 499 F. 2d 1277 (CCPA 1974)). In C.J. Tower & Sons of Buffalo, Inc. v. United States, emergency war material eligible for duty free treatment was entered by the broker and duty paid. The parties conceded that both district Customs and the importer were unaware of the facts justifying duty-free entry until after the liquidations became final. The Customs Court stated, “such lack of knowledge, both in kind and degree, is such as to clearly come within the statutory language, "mistake of fact, or other inadvertence" (336 F. Supp. 1395, 1399 (Cust. Ct. 1972)).

In the Protestant’s case, Pafums knew from the invoice description that the bottles were in the shape of bears. While it is possible that the protestant might not have been aware that bottle shape was a factor in a classification determination, it cannot argue that the invoices did not fairly describe the shape of the bottles. This is not an inadvertent mistake of fact correctable under 19 U.S.C. §1520(c)(1), but rather a mistake of the applicable law.

The Protestant states that Chrysler Corporation v. U.S. Customs Service, Slip Op. 00-12, February 7, 2000, “rejected the government’s claim that the importer must demonstrate the underlying cause or reason for the mistake and failure to ascertain the facts was just cause for rejecting the 520 claim. The court indicated the petitioner must demonstrate what the correct facts are and he was mistaken as to those facts at the time of entry.” In Chrysler Corporation v. U.S., 87 F. Supp. 2d 1339 (Ct. Int’l Trade 2000, Chrysler imported Clubcab pickup trucks from Mexico not realizing at the time of importation the engines were manufactured in the United States and therefore partially duty free. Chrysler filed a timely 19 U.S.C. §1520(c)(1) petition to reclassify the engines after Customs liquidated the entries without granting a duty exemption. The court did find that “Chrysler need not produce evidence of the underlying cause or reason for its mistake of fact in order to establish its error by documentary evidence.” Id. at 1352. In the instant case, the Protestant is not being asked to demonstrate the underlying cause or reason for the mistake. The Protestant need only explain the facts and our office will determine based on those facts whether we find there was a correctable error in fact. The error or mistake of fact must, however, be “manifest from the record or established by documentary evidence” (19 USC § 1520(c)(1)). “Manifest from the record or established by documentary evidence” means that the nature of the error must be observable upon review of the record or upon submission of documentary evidence. In either event, the burden is on the petitioner to establish which key features were unknown as the result of unclear invoice descriptions. The CF 7501s and the invoices correctly describe the bottles as “plastic bear bottles” and “M/Day Bears.”

Reliquidation per § 1520(c)(1) must be denied because there was no classification error in the liquidations. In addition, even if the bottles should have been classified as toys because of their shape, the invoices describe the bottles’ shape.

HOLDING:

1. The bottles are not classifiable as toys under subheading 9503.49, HTSUS.

2. There was not an error in the liquidation correctable per 19 U.S.C.§1520(c)(1).

The protest should be DENIED IN FULL.

Consistent with the decision set forth above, you are hereby directed to deny the subject protest. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office 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 of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

Myles Harmon, Director

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