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HQ 966321




November 21, 2003

CLA-2 RR:CR:TE 966321 RH

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.99.9000

Port Director
Bureau of Customs and Border Protection
300 South Ferry Street
Terminal Island, CA 90731

RE: Decision on Application for Further Review of Protest Number 2704-02-102651; Classification of a Paperboard Watch Box; Jewelry Box; Heading 4202, HTSUS

Dear Sir:

This is in reply to your memorandum of March 6, 2003, forwarding Application for Further Review of Protest (AFR) number 2704-02-102651 to our office for a decision.

The law firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP, timely filed the AFR, on behalf of Citizen Watch Company of America, Inc. (“Citizen”), against your decision in the classification and liquidation of one entry of watch packing boxes under subheading 4202.99.9000 of the Harmonized Tariff Schedule of the United States (HTSUS).

Review of the AFR is warranted pursuant to 19 CFR §§174.24 and 174.25.

FACTS:

On October 16, 2001, the protestant entered a shipment of “Citizen+Eco-Drive” watch boxes into the United States from Thailand. Customs (now Customs and Border Protection (“CBP”)) liquidated the entry on September 27, 2002.

The protestant claims that the watch boxes are properly classified under subheading 4819.50.4040, HTSUS, as other packing containers of paper or paperboard.

In the Memorandum in Support of Protest and AFR, counsel for the protestant describes the merchandise as follows:

The merchandise is a cylindrical carton principally made of recycled paper. The top portion of the carton lifts off the base, revealing the insert in which a watch is transported from the store following the retail purchase The dimensions of the enclosed sample are: 5.25” (H), 3.5” (D). The carton is green and printed with the Citizen Watch logo on the top portion.

The watch packing box is used in connection with Citizen’s Eco-Drive watch collection. After a consumer purchases an Eco-Drive watch, the watch is placed in the packaging and the box with watch is given to the consumer. The watch packing box basically serves as a box to transport the watch to the consumer’s home following purchase or as fancy packaging if the watch is to be a gift. The watch packing box is not used in the presentation or sale of the Citizen Eco-Drive watch. The Eco-Drive watches are presented for sale in a counter display, mounted on a collar stand.

ISSUE:

Are the watch boxes classified under heading 4202, HTSUS, as jewelry boxes and similar containers, or under heading 4819, HTSUS, as packing containers of paperboard?

LAW AND ANALYSIS:

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUS) is made in accordance with the General Rules of Interpretation (GRI). 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.

The Harmonized Commodity Description and Coding System Explanatory Notes (“EN”) constitute the official interpretation of the Harmonized System 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 these headings.

Counsel for the protestant argues that the watch packing boxes do not fall within the meaning of the terms of 4202, HTSUS. That heading provides for:

Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper.

In April 1988, the Harmonized System Committee (HSC) deliberated concerning the classification of presentation cases, and ultimately amended the EN to heading 4202 to clarify the meaning of the term “jewelry boxes.” This amendment became effective on January 1, 1990. The following paragraph was added:

The term “jewellery boxes” covers not only boxes specially designed for keeping jewellery, but also similar lidded containers of various dimensions (with or without hinges or fasteners) specially shaped or fitted to contain one or more pieces of jewellery and normally lined with textile material, of the type in which articles of jewellery are presented and sold and which are suitable for long-term use.

Counsel argues that the boxes at issue are not jewelery boxes as defined in the EN. One of counsel’s arguments is that the watch boxes are not used in the presentation or sale of the Eco-Drive watches but are packing containers in which the watches are placed after purchase by the consumer. In that regard, counsel states that Citizen spends approximately $2,000,000 each year on creating attractive displays at no cost to retailers for use in selling Citizen watches.

Prior to the EN amendment in 1990, it was CBP’s position that jewelry presentation cases and similar containers used as retail or “premium” packaging were not classified under heading 4202, HTSUS, because they were not ejusdem generis or in pari materia with the exemplars explicitly set forth in heading 4202, HTSUS. Therefore, since no other headings described such cases, they were classified by application of GRI 3(b), according to the
constituent material that imparted the essential character of the containers’ frames. See Headquarters ruling Letter (HQ) 086186, dated January 2, 1990; HQ 089830, dated July 26, 1991; HQ 086561, dated June 12, 1990.

Following the amendment to the EN, CBP changed the classification of items previously found to be “premium” or retail packaging. HQ 951028, dated March 3, 1993; HQ 955118 dated October 20, 1993. In HQ 951028, CBP revoked HQ 086186 and HQ 089830 involving small containers of various dimensions that did not conform precisely to the design of traditional jewelry boxes. We held that the cases used in the presentation and/or sale of jewelry were included within the meaning of the term “jewelry boxes” as it appeared in heading 4202, HTSUS, and that those items were designed for use in the retail sale of jewelry and were frequently kept and used after purchase to store and protect the item purchased.

In HQ 951028, we also addressed the importer’s argument that customers discard the presentation cases after purchase, a claim also raised in the instant protest. We stated that, for classification purposes, actual use of the cases after purchase was irrelevant. They did not have to be used after purchase for protective storage; they only needed to be suitable for such use.

Additionally, in HQ 955118 CBP revoked HQ 086561, pertaining to the classification of a textile covered vinyl folder for a wristwatch. Like the containers in HQ 089830 and HQ 086186, the importer in that case claimed that the watch folders were used as packaging, were not intended to be reused, and were usually disposed of after the merchandise was carried home from the store by the purchaser. In revoking HQ 086186, we concluded that containers “of this type” – designed for use in the retail sale of jewelry and similar items – were frequently kept and used after purchase for storage of the item purchased and that the watch folders were adequately constructed to serve as a protective storage container for the watches. The textile covered vinyl watch folders were reclassified under subheading 4202.92.9015, HTSUS.

Another assertion counsel raises is that the boxes at issue are not jewelery boxes as defined in the EN because they are not suitable for long-term use. Counsel submits that it is unlikely and would defeat the purpose of the consumer in buying a light powered watch to store it in its container, as it requires light in order to recharge the battery. However, literature we read concerning the watches indicates that the light-powered watches may be stored for months at a time without affecting their operation. One article reads in relevant part:

The watch is powered by light, using Eco-Drive technology, and therefore never needs a battery change. The light enters the watch through the dial and beneath it a solar cell converts the light to electricity, which is stored
in a mini-reservoir and used to power the watch The system is so efficient that Largo, after an initial dose of light, will keep time for 270 days in total darkness. It can do so thanks to what Citizen calls the “power save” feature, which causes the watch to stop when it’s placed in darkness and resume operations immediately when it is once again exposed to light. When the watch “senses” the light, the watch hands instantly move to the correct time, as if they had never stopped.

Two Citizen “Technical Bulletins” indicate that other watch models, once fully charged, will run from eighty to one hundred days without additional charging. Moreover, the warranty and general instructions for the watches list special handling instructions, none of which indicate that the watches should not be stored.

The protestant, through counsel, also claims that the instant paperboard boxes constructed of recycled paperboard are not suitable for long term use because they are easily damaged and not of the same sturdy construction to stand-up to repeated use as are the items enumerated in heading 4202, HTSUS. As pointed out in HQ 953609, dated April 5, 1993, Presidential Proclamation 6515 of December 16, 1992, changed the law and created additional tariff provisions specifically covering paperboard jewelry boxes covered with paper under heading 4202, HTSUS. In HQ 953609, a specially shaped and fitted jewelry box made of paperboard base material with a paper covered exterior was classified in subheading 4202.99.9000, HTSUS.

Additionally, counsel argues that a watch does not meet the common definition of jewelry and points out that jewelry is classified under section XIII, chapter 71, HTSUS, while watches are classified under section XVIII, chapter 91, HTSUS. Therefore, counsel contends that the watch packing box at issue is not a jewelry box under heading 4202, HTSUS. This argument is unmeritorious. Since 1993, CBP has consistently classified containers for transporting and storing watches as articles similar to jewelry boxes. See HQ 955118, dated October 20, 1993 (vinyl watch folder covered with textile classified under subheading 4202.92.9015); HQ 952298, dated July 30, 1993 (paperboard watch folder covered with plastic sheet classified under subheading 4202.92.9015); HQ 961650, dated April 6, 1993 (watch box classified under subheading 4202.99.1000); NY D84307, dated December 1, 1998 (plastic watch box covered with paper classified under subheading 4202.92.9060); NY 805642, dated January 19, 1995 (metal watch box covered with textile classified under subheading 4202.92.9015); PD A83181, dated May 6, 1996 (plastic watch box covered with paper classified under subheading 4202.99.1000). Furthermore, CBP’s classification of jewelry boxes in heading 4202, HTSUS, has been
affirmed by the Court of International Trade and the Court of Appeals for the Federal Circuit. See Jewelpak Corp. v. United States, 297 F. 3d 1326 (2002) (affirming Jewelpak Corp. v. United States, 131 F. Supp. 2d 100 (Ct. Int’l Trade 2001)).

Finally, we find no merit in the assertion that the EN to GRI 5(a) define the phrase “suitable for long-term use” to mean that the box is “designed to have a durability comparable to that of the articles for which [it] is intended.” As we noted in HQ 951028, GRI 5(a) is not relevant where, as here, the boxes are not entered with the watches.

Based on the foregoing precedent, as well as an examination of the sample, we find that the boxes in question are lidded containers similar to a jewelry box of heading 4202, HTSUS, and are not packing containers of heading 4819, HTSUS. They are specially shaped to contain a watch, are presented and/or sold with the watch and are adequately constructed to be suitable for long-term use.

HOLDING:

The protest should be DENIED. CBP correctly classified the watch boxes at issue under subheading 4202.99.9000, HTSUS, which provides for “ . . . jewelry boxes . . . and similar containers . . . .:Other: Other: Other.” The general column one duty rate is 20 percent ad valorem.

In accordance with section 3A(11)(b) of Customs Directive Number 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be attached to the Customs Form 19, Notice of Action, and furnished to the protestant’s counsel 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 (on that date) the Office of Regulations and Rulings will take steps to make the decision available to CBP personnel via the Customs Ruling Module in ACS and to the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

Myles B. Harmon
Director, Commercial Rulings Division

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