CLA-2-62:S:N:N5:360 813637
Mr. Marc S. Greenberg
American Shipping Company, Inc.
600 Sylvan Avenue
P.O. Box 486
Englewood Cliffs, NJ 07632
RE: The tariff classification of plastic hangers imported with garments from various countries in the Far East
Dear Mr. Greenberg:
In your letter dated August 15, 1995, you requested a tariff classification ruling on behalf of Mercantile International.
Samples of various styles of plastic hangers suitable for use with specific apparel, i.e., ladies dresses, skirts, children's wear, etc., were submitted with your inquiry. You state that Mercantile International intends to import apparel which will have the specific hanger inserted into the garment.
Each department in the Mercantile Group will offer the hanger to the retail consumer free of charge. If they decline, these hangers will be removed from the garments and they will be reused in the store for use with other garments being put up for retail sale. You question whether the hangers are separately classified as hangers or whether they are subject to the duty of the garment with which they are imported.
General Rule of Interpretation (GRI) 5(b) of the Harmonized Tariff Schedule of the United States (HTS) provides: "...packing materials...entered with the goods therein shall be classified with the goods...However, this provision is not binding when such packing materials...are clearly suitable for repetitive use."
Holly Stores, Inc. v. The United States, 534 F. Supp. 818 (1981), aff'd, 697 F.2d 1387 (Fed.Cir. 1982), involved the classification of plastic and plastic coated wire hangers imported with garments. In that decision, the Court interpreted the meaning of "reuse" as it appeared in General Headnote 6(b) of the Tariff Schedules of the United States (TSUS). Customs has relied upon this interpretation when reviewing the HTS term "repetitive use" as it appears in GRI 5(b). Each provision addresses the issue of when containers imported with goods are classifiable with those goods or classifiable separately.
You state that the hangers at issue are used for more than the shipping and handling of the garments with which they are imported. The hangers can reused many times for displaying other garments in your client's stores. The hangers in the Holly Stores case were also reused in the same manner you have described, however, the Court found that such "reuse" was not sufficient to be considered "reuse" in the commercial sense as defined in General Headnote 6(b).
The Court went on to define the commercial sense of the term "reuse" in relation to the hangers as meaning either the hangers entered the commerce of the U.S., or that it would be reused for commercial shipping or transportation purposes. The reuse indicated in the Holly Stores decision was considered to be "limited to the operation of the plaintiff's own enterprise." The Court found the reuse of the hangers to be only "incidental and fugitive relative to the plaintiff's own scale of operations." While Customs recognizes that the hangers at issue are more substantial in construction than those at issue in Holly Stores, their use is very much the same.
The Court concluded in Holly Stores that the hangers did not enter the mainstream of commerce. The function of the hangers was for shipment and presentation of garments to the consumer. Reuse of the hangers to hang other garments was not viewed as a reuse in the commercial sense intended in General Headnote 6(b).
It is Customs position that the Court's interpretation of the term "reuse" applies to the interpretation of "repetitive use" in GRI 5(b) and the correct application of that GRI. "Clearly suitable for repetitive use" as used in GRI 5(b) is taken to mean repetitive use in the practical, commercial sense. This interpretation follows the case law as reflected in Holly Stores and other various container cases. The reuse of the hangers at issue is not viewed as a repetitive use in the commercial sense.
Accordingly, the hangers are correctly classified with the garments with which they are imported, and therefore dutiable at the same rate as the garments.
Please be advised that textile garments are subject to quota and visa arrangements from the countries you specifiy. Without a specific garment, we cannot provide any information relative to the specific textile category applicable nor can we provide any specific classification information.
This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport