CLA-2 CO:R:C:F 956368 LPF
John B. Pellegrini, Esq.
Ross & Hardies
Park Avenue Tower
65 East 55th Street
New York, NY 10022-3219
RE: Classification of Scotch and Canadian Whiskies with Cradles;
Heading 2208, spirits, liqueurs and other spirituous
beverages; GRI 3 set put up for retail sale; HRLs 954579,
950845
Dear Mr. Pellegrini:
This is in response to your letter of April 20, 1994,
submitted on behalf of Joseph E. Seagram & Sons, Inc. regarding
the proper classification, under the Harmonized Tariff Schedule of
the United States Annotated (HTSUSA), of Scotch and Canadian
whiskies packaged with cradles. Customs received samples of the
cradles, but not the whiskies.
FACTS:
The merchandise at issue consists of two different gift boxes.
One gift box will contain a 1.75 liter bottle of Scotch whisky with
a cradle composed of metal, plastic, and wood. The other gift box
will contain a 1.75 liter bottle of Canadian whisky with a cradle
composed of metal and plastic. The cradles are designed and used
to assist in pouring the spirits contained in the accompanying
bottles and are labelled with the "Chivas Regal" and "Crown Royal"
insignias. The spirits will originate in either Canada or the
United Kingdom, while the cradles are produced in Taiwan. The
spirits and cradles will be packaged as a unit in a foreign trade
zone.
ISSUE:
Whether the whiskies and cradles, when withdrawn from the
foreign trade zone, qualify as sets put up for retail sale and are
classifiable within heading 2208 as spirits or elsewhere in the
HTSUS.
-2-
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUS. Most imported goods are classified
by application of GRI 1, that is, 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 GRIs may then be applied. The
Explanatory Notes (ENs) to the Harmonized Commodity Description and
Coding System, which represent the official interpretation of the
tariff at the international level, facilitate classification under
the HTSUS by offering guidance in understanding the scope of the
headings and GRIs.
The merchandise consists of several articles classifiable as
follows: the Scotch and Canadian whiskies in heading 2208 as
spirits and the cradles in the appropriate heading providing for
their constituent material. Because the HTSUS provides for these
articles in separate headings, classification is determined by
applying GRI 3(a), that is, under the heading which provides the
most specific description of the good. However, when each heading
refers to part only of the items in a set put up for retail sale,
the headings are regarded as equally specific and we are directed
to GRI 3(b).
In accordance with EN X to GRI 3(b), we determine whether the
merchandise qualifies as a set. It is apparent that the whiskies
and cradles meet the criteria requiring that the merchandise
consist of at least two different articles classifiable in
different headings and be put up in a manner suitable for direct
sale without repacking. However, we must examine whether the
merchandise meets the final criterion, that it consists of articles
put up together to meet a particular need or carry out a specific
activity.
In this regard, Headquarters Rulings Letters (HRLs) 954579,
issued October 6, 1993, and 950845, issued June 26, 1992, are most
instructive. In HRL 954579 spirits packaged with two glasses in
a gift box were found to qualify as a set. The glasses were
relatively inexpensive, representing approximately 25 percent or
less of the total value of each set. See also HRLs 082954, issued
December 20, 1989, and 085326, issued September 22, 1989, where
champagne packaged with inexpensive champagne flutes and liqueurs
packaged with small, inexpensive glasses were found to constitute
a set. On the other hand, in HRL 950845 bowls made of Chilean wood
filled with raisin and nut mixtures were found not to qualify as
a set. The value of the reusable bowl was considerably greater
than the value of the raisin and nut mixtures and accounted for a
significant amount of the bulk and weight of the product.
-3-
We find the instant merchandise to be most analogous to the
the liquor or champagne packaged with the glasses. In both the
instant case and HRL 954579 the low value and relative
insignificance of the cradles and glasses indicates that those
articles primarily are packaged for use with the accompanying
spirits, as opposed to distinctively being used as household
articles or tableware. Not only is it questionable whether the
cradles will be retained for an extended period of time (e.g.,
after the accompanying spirits are consumed), but the size, shape,
and design of the cradles as well as the labelling of "Chivas
Regal" and "Crown Royal" on the cradles indicate that they are put
up and packaged with the accompanying spirits to carry out the
specific activity of imbibing those spirits. In contrast, the
wooden bowl of HRL 950845 was designed to be used in divergent
situations long after the raisin and nut mixtures had been
consumed. Nothing about the bowl indicated, in particular, that
it would carry out the specific activity of eating those food
mixtures.
Because the merchandise qualifies as sets, according to GRI
3(b) the set is classified by the article which imparts its
essential character. EN VIII to GRI 3(b) explains that essential
character may be determined by the nature of the material or
component, its bulk, quantity, weight or value, or by the role of
a constituent material in relation to the use of the article. The
spirits account for approximately 85 percent of the product's
value. A consumer will purchase this merchandise because of the
particular spirits. In contrast, the cradles are designed to be
used specifically with the accompanying spirits and facilitate the
consumer's drinking of the spirits. As the spirits impart the
essential character, the merchandise is classifiable within heading
2208. The appropriate subheadings for the Scotch and Canadian
whiskies are 2208.30.3030 and 2208.30.6065, respectively.
HOLDING:
The set including the Scotch whiskey is classifiable in
subheading 2208.30.3030, HTSUS, as "Undenatured ethyl alcohol...;
spirits, liqueurs and other spirituous beverages...: Whiskies:
Irish and Scotch, In containers each holding not over 4 liters."
The general column one rate of duty is 5.3 cents per proof liter.
The set including the Canadian whiskey is classifiable in
subheading 2208.30.6065, HTSUS, as "Undenatured ethyl alcohol...;
spirits, liqueurs and other spirituous beverages...: Whiskies:
Other, Other: In containers each holding not over 4 liters:
-4-
Other." The general column one rate of duty is 6.6 cents per proof
liter. Imports under these subheadings may be subject to a Federal
Excise Tax (26 U.S.C. 5001) of $13.50 per proof gallon and a
proportionate tax at the like rate on all fractional parts of a
proof gallon.
Sincerely,
John Durant, Director
Commercial Rulings Division