CLA-2 CO:R:C:G 082780 SS
Area Director
New York Seaport
U.S. Customs Service
6 World Trade Center
New York, New York 10048-0945
RE: Internal Advice on the classification of household china.
Dear Sir:
This is our response to your request for internal advice
concerning the tariff classification of certain patterns of china
dinnerware imported by Villeroy & Boch Tableware Ltd.
FACTS:
The merchandise in issue consists of certain patterns of
china dinnerware. The names of the patterns are as follows:
Albertine, Alt Amsterdam, Amapola, Aragon, Arco White, Arlano,
Basket Blue, Green, Red, Coburg, Collage, Castello, Castell Gold,
Delta, Facette Rouge, Facette Gold, Fruit Garden, Gold Brocade,
Indian Summer, Lombardi White, Louiseburg White, Blue, Gold,
Orlando, Palatino, Petite Fleur, Royal Gold, Siera, Summerday,
Trio, Verona, and Vieux Luxembourg.
The above patterns represent the manufacturer's fine china
produced chiefly for household use. However, this china is also
marketed and sold to hotels and restaurants for use in their
finer dining sections. The information supplied in the catalogue
advertising these chinaware patterns indicates certain patterns
may be ordered in a design which conforms more to hotel and
restaurant use. For example, the pattern, Basket, may be ordered
without the center decoration on the china.
-2-
The percentage of total sales to hotels and restaurants
varies according to the pattern of chinaware and year of the
sales. For example, in 1985, the pattern Petite Fleur reflected
a 49% sale, while in 1986, it showed a 17.44% sale. Further,
according to the data supplied by the importer, certain patterns
of china had sales to hotels and restaurants varying from 70% to
100% in 1983. Counsel for the importer claims that the total
sales to hotel and restaurants for 1986 was 11.16% for household
dinnerware, and 11.35 for household bone china. However, it is
noted that these percentages are based on sales of all patterns,
rather than on specific patterns. The actual percent of sales
for a specific pattern ranges from zero to 45.05%, depending on
the pattern.
ISSUE:
Whether when classification is determined on the basis of
chief use, and certain patterns of household chinaware are also
marketed and sold to hotels and restaurants, such chinaware is
properly classifiable under the provision for hotelware in item
533.52, or under the provision for household ware in item 533.64,
TSUS.
LAW AND ANALYSIS:
In the instant case, the following two situations are
presented:
(1) Some restaurants and hotels purchase household china
for use in their finer dining areas;
(2) Some restaurants and hotels purchase, by special order,
household type china with patterns which have been modified so as
to make them more suitable for restaurant and hotel use.
Schedule 5, part 2, subpart C, of the Tariff Schedules of
the United States (TSUS), provides for articles chiefly used for
preparing, serving, or storing food or beverages. Item 533.52,
TSUS, provides specifically for hotel or restaurant ware and
other ware not household ware, while item 533.64, TSUS, provides
for household ware. In both statutory provisions, the
fundamental question for determination is whether the imported
articles belong to a class or kind of merchandise chiefly used in
the household.
-3-
General Interpretative Rule 10(e)(i) defines how use
requirements (other than actual use) are to be construed:
(e) in absence of special language or context which
otherwise requires-
(i) a tariff classification controlled by use (other
than actual use) is to be determined in accordance with
the use in the United States at, or immediately prior
to, the date of importation, of articles of that class
or kind to which the imported articles belong, and the
controlling use is chief use, i.e., the use which
exceeds all other uses (if any) combined;
In applying the concept of chief use, courts consider
several factors as pertinent in determining whether the imported
merchandise falls within a particular class or kind. These
factors include the general physical characteristics of the
merchandise, the expectations of the ultimate purchaser, the
channels, class or kind of trade in which the merchandise moves,
the environment of the sale, and the manner in which the
merchandise is advertised or displayed. (Citations omitted)
United States v. Carborundum Co., 536 F.2d 373 (1976). Further,
in determining chief use, it is also proper to consider the
testimony offered as well as the characteristics of the
merchandise itself. United States v. Bruce Duncan Co., 50 CCPA
43, C.A.D. 817 (1963).
In reviewing the facts and evidence submitted, it is
ascertained that household china is distinct from hotel china in
both physical and design characteristics. Hotel china is heavier
in weight, is stackable, and chip resistant. Also, the plates
generally do not have a center design. This type of china is
generally less expensive than household china and is offered for
sale by independent sales representatives to wholesalers or hotel
chains. This industry also has its own trade publications and
trade shows.
On the other hand, household china is lighter in weight, is
generally more expensive, and does not possess some of the
characteristics of hotel ware. Further, such china is sold
nationwide by company employees to department stores, gift stores
and directly to the consumer.
-4-
Based on the available information, the character of the
china in situation (1) above clearly shows that it is household
china. The facts indicate that some of this china is sold for
use in hotels and restaurants. It is noted that the percent of
sales of this china to restaurants and hotels varies, but it is
not "the use of a particular shipment but rather that of class or
type of goods involved which determines its chief use." United
States v. The Baltimore & Ohio R.R. Co. A/C United China & Glass
Company, 47 CCPA 1, C.A.D. 710. Further, it is well settled that
a fugitive use or a mere susceptibility or capability of use is
not controlling as to chief use. United States v. Carborundum
Co., 536 F.2d 373, 377 (1976). Therefore, the mere fact that the
subject china may possess some characteristics which permits its
use in hotels and restaurants does not establish that it is
chiefly used in hotels and restaurants. Also, it is noted that
chief use changes depending on trends in society, but
classification is determined on the basis of chief use at the
time of importation. In this instance the percentage of sales
and amount of use of household china by restaurants and hotels
neither establish nor constitute chief use within the meaning of
General Interpretative Rule 10(e)(i), TSUS, i.e., such use "does
not exceed all other uses." Therefore, in this situation, the
china in issue belongs to the class of china used chiefly as
household china.
We are also cognizant that item numbers 533.11 through
533.77, TSUS, were changed by Section 509 of the Trade Act of
1979, P.L. 96-39. We have also taken into consideration that the
apparent intent of these changes was to preclude the low duty
entry of ceramic ware which is not household ware. However, the
distinction between household ware and hotel ware is premised on
the use of the ware. Since classification of these items is
governed by chief use, unless ceramic ware is chiefly used as
hotel ware within the meaning of General Interpretative Rule
10(e)(i), such china cannot properly be classified as hotel ware
in item 533.52, TSUS. On the other hand, since chief use can
change depending on trends in society, when and if such china is
used chiefly for restaurants, it will be necessary to reevaluate
classification.
-5-
In the case where restaurants and hotels special order
household china in modified patterns more suitable for commercial
uses, as described in situation (2) above such modification
alone will not provide the imports with a utility different from
the class. However, when such modifications include the hotel or
restaurant logo or name, it is obvious that such china is in a
class chiefly for hotel purposes.
Thus, household china which has been special ordered and
modified for hotel and restaurant use by incorporating the hotel
/restaurant logo or name in the design, is no longer in the class
of china for household use, but belongs to the class of china
that is chiefly used for hotels and restaurants.
HOLDING:
The patterns of household china described above, which are
of a class used chiefly as household china, but also sold to some
hotels and restaurants, are properly classifiable in item 533.64,
TSUS.
The patterns of household china which have been modified and
special ordered for hotel and restaurant use by incorporating the
hotel/restaurant logo or name in the design, are properly
classified in item 533.52, TSUS. You should advise the internal
advice applicant of this decision.
Sincerely,
John Durant, Director
Commercial Rulings Division
SSingh library/peh
082780