CLA-2 RR:TC:FC 958099 ALS
Mr. Peter Jan Baskin
Attorney at Law
Sharretts, Paley, Carter & Blauvelt, P.C.
67 Broad St.
New York, NY 10004
RE: Plastic Containers Known as P-Boxes
Dear Mr. Baskin:
This is reference to your inquiry as to the classification
and valuation of the subject containers as well as their
eligibility for duty-free treatment pursuant to the provisions of
subheading 9803.00.50, Harmonized Tariff Schedule of the United
States Annotated (HTSUSA).
FACTS:
The articles under consideration are described as
trapezoidal shaped containers of various sizes molded of plastic
material. The sample submitted with the ruling request, which
represents the smallest of such containers, measures
approximately 59 cm long by 39 cm wide by 17 cm high. Each side
of the box tapers in slightly from top to bottom. A carry handle
is molded into the brim on each of the 2 ends of the box and 2
indentations along each side of the brim accommodate tab closures
on the lid of the box which can be locked to the box. The
company's name is molded into both the lid and the box.
The articles are manufactured in Sweden and France. They
are specially designed to transport plastic toy bricks and shapes
and are used to transport those items between the manufacturer
and its affiliates. We have been advised that these containers,
loaded with the referenced loose toy parts, will normally arrive - 2 -
in the United States during the latter half of the month prior to
the month in which they will be used to produce various toy
packages. A bar code label on the exterior of each box
identifies its contents. The contents of the average box is used
within 2 to 3 weeks after its arrival at the importer's premises
although some boxes may remained unused for as long a 1 1/2
months. A box is completely emptied when ready for use, i.e.,
the contents are not withdrawn in a piecemeal fashion.
Occasionally a box may be used to store domestically procured
items. When the contents of the boxes are empty after their
contents are used, they are returned to the overseas source for
refilling. This is a re-occurring process with full P-boxes
arriving in the United States and empty ones being sent back to
Europe to be refilled.
ISSUE:
What is the classification of the instant articles? Are
they eligible for special tariff treatment subsequent to their
initial duty-paid arrival?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is governed
by the General Rules of Interpretation (GRI's) taken in order.
GRI 1 provides that the classification is determined first in
accordance with the terms of the headings and any relative
section and chapter notes. If GRI 1 fails to classify the goods
and if the headings and legal notes do not otherwise require, the
remaining GRI's are applied, taken in order.
In considering their classification we noted that the
instant plastic boxes serve multiple functions. They are used
for intracompany transport and storage of plastic toy bricks and
shapes produced by the manufacturer, an affiliate of the
importer. We noted that the sample P-box has the company name
molded into its sides and lid, indicating that it was dedicated
to uses of the manufacturer and/or its affiliates. Counsel
confirmed that the boxes are not sold or otherwise made available
to retail customers.
Since the P-boxes serve both a transportation and storage
function, it is necessary to ascertain which of those functions
is the primary function. Based on discussions with counsel and
the importer, it appears that the P-boxes may be used for storage
purposes at European locations, particularly at locations where
shipments destined for other locations are sorted and
consolidated for shipment. However, pursuant to Additional U.S.
Rule of Interpretation 1(a), a tariff classification controlled - 3 -
by use (other than actual use) is to be determined in accordance
with the use in the United States...of the class or kind to which
the imported goods belong, and the controlling use is the
principal use.
In this regard, we note that the scenario of use of these
containers in the United States, as indicated by the importer, is
that the P-boxes are used for both transportation and storage.
The importer has advised us that an average box arrives at their
facility during the last half of the month prior to the planned
use of its contents and that such box is emptied within 2 to 3
weeks after arrival. The importer further indicates that in the
normal course of production planning, no box should remain unused
(full) for more than 1 1/2 months. When emptied the boxes are
completely emptied and not in a piecemeal fashion. Subsequent to
the emptying, the boxes are consolidated for shipment, in their
empty condition, to their European affiliates, for refilling.
The importer has advised us that some of the boxes may be
occasionally used for storage of products which are domestically
sourced in the United States but that is an infrequent
occurrence. We believe that this should be considered an
occasional and incidental use and that the primary use of the
P-boxes in connection with importation into the United States is
the transportation of their contents. Accordingly, their
appropriate classification would be as articles for the
conveyance and packing of goods, of plastics, boxes, cases,
crates and similar articles.
Based on the conclusion that the P-boxes are primarily and
repeatedly used for the conveyance of goods, we concur with
counsel's assertion that the boxes are eligible for special
tariff treatment under subheading 9803.00.50, HTSUSA. The boxes,
once entered and duty paid, would be eligible for duty-free
admission on subsequent importations upon compliance with the
provisions of section 10.41b(c)(1), Customs Regulations (19 CFR
10.41b(c)(1)).
The value issue raised by counsel is presently under
consideration and will be the subject of a separate reply.
HOLDING:
Plastic containers, as above described, primarily used for
the transportation of goods, which are repeatedly reused for that
purpose, and which are used for storage purposes for a minimal
period of time incidental to their use to transport goods, are
- 4 -
classifiable in subheading 3923.10.0000, HTSUSA. Merchandise
classified under that subheading, which provides for "Articles
for the conveyance or packing of goods, of plastics;... Boxes,
cases, crates and similar articles..." are subject to a general
rate of duty of 3 percent ad valorem. Such containers are
eligible for duty-free admission on reimportation, after their
initial duty paid admission, under the provisions of subheading
9803.00.50, HTSUSA, upon compliance with the provisions of
section 10.41b(c)(1), Customs Regulations (19 CFR 10.41b(c)(1)).
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division