CLA-2 RR:CR:GC 959745 JRS
Ms. Marilyn-Joy Cerny
Global Customs & Trade Specialists, Inc.
Milltown Office Park - Suite B-202
Route 22
Brewster, New York 10509
RE: Ceramic tableware, of porcelain or china, used in the
rental industry; heading 6911, ceramic household
tableware, of porcelain or china, versus ceramic hotel
and restaurant tableware and other non-household
tableware, of porcelain or china; HQ 082780; principal
use, class or kind; Carborundum factors
Dear Ms. Cerny:
This is in response to your letter dated May 22, 1996,
requesting a ruling on behalf of Seneca-Delco Corporation,
concerning the classification of ceramic tableware intended to
be used in the tableware rental industry. We have taken into
consideration additional information presented at the meeting
held on January 8, 1997, and your further submissions dated
January 16, May 15, and June 11, 1997, which present information
on a GSA institutional standard for white, restaurant-grade,
china dinnerware. We regret the delay in responding.
FACTS:
Seneca-Delco (hereinafter, SD) imports tableware designed
exclusively for institutional use and sold expressly and
exclusively to institutional buyers such as restaurants, hotels,
airlines, nursing homes and hospitals. SD plans to import
certain tableware designed especially for sale to rental
companies and private caterers, who will in turn rent the
tableware to individuals and others hosting parties at homes or
other private locations. This merchandise will be marketed and
sold at Rental Industry Trade Shows and will be priced based on
individual 5-piece settings, not individual pieces. SD claims
that the end users of rental chinaware are more concerned with
appearance than durability, and consequently, the chinaware is
thinner and lighter than institutional chinaware. SD will not
provide the "non-chipping guarantee" that it traditionally
offers for its institutional chinaware.
A sample of the plate to be imported from Poland was
substituted for the original prototype from Bangladesh (Ten
Strawberry Street). A comparison sample of the standard
commercial chinaware used in hotels, restaurants and other
institutions also was presented. The dinner plate at issue
measures 10 11/16 inches in diameter and weighs 531 grams (18.59
oz. or 1 lb. and 2.59 oz.). It is bright white in color with a
high-gloss glaze. The "rim" portion of the plate measures 1 and
11/16 inches in width and is a little over 1/16ths of an inch in
thickness. On the back of the plate, a label containing the
following words appear:
ZA ADY PORCELANY STO OWEJ
"LUBIANA" S.A.
POLAND
#2038
The chinaware will be imported in either plain white or
white with a single or double overglazed metal (i.e., gold,
silver or platinum) band(s), to be located either on the outside
rim of the plate or on both the outside and inside rims. No
center designs, crests, or logos will be used.
The subheadings under consideration are as follows:
6911 Tableware, kitchenware, other household articles
and toilet articles, of porcelain or china:
6911.10 Tableware and kitchenware:
6911.10.10 Hotel or restaurant ware and other
ware not household ware...doz.pcs. 31%
ad valorem
Other:
Other:
Other:
6911.10.52 Cups valued over $8 but
not over $29 per dozen; ...
plates not over
22.9 cm in maximum di-
ameter and valued over
$8.50 but not over $31 per
dozen; plates over 22.9
but not over 27.9 cm in
maximum diameter and valued over $ll.50
but not over $41
per dozen; ... doz PCs. 8%
ad valorem
ISSUE:
Whether tableware used in the rental industry is classified
as tableware for hotel or restaurant and other non-household
ware, or as tableware for household ware.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part
that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6. Chapter 69,
HTSUS, provides for ceramic products.
Heading 6911 covers all tableware, kitchenware, other
household articles and toilet articles, of porcelain or china.
Tableware and kitchenware is further subdivided into two
distinct categories under subheading 6911.10: (1) articles for
hotel or restaurant ware and other ware not household ware and
(2) household ware. The household ware category is further
subdivided by articles of bone chinaware and other than bone
chinaware, and further subdivided by those available in
specified sets and those that are not.
SD contends that the rental chinaware falls within the
class of goods principally used in the household and is
therefore classifiable under the tariff provisions covering
tableware "other" than hotel or restaurant ware.
When an article is classifiable according to the use of the
class or kind of goods to which it belongs, Additional U.S. Rule
of Interpretation 1(a), HTSUS, provides that: in the absence of
special language or context which otherwise requires-- (a) 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
goods of that class or kind to which the imported goods belong,
and the controlling use is the principal use. In other words,
the article's principal use at the time of importation
determines whether it is classifiable within a particular class
or kind. In Lenox Collections v. United States, 20 CIT ,
Slip Op. 96-30 (Feb. 2, 1996), the Court in its analysis
referred to Additional U.S. Rule of Interpretation 1(a) and the
need to focus on the principal use of the class or kind of goods
to which an import belonged, not the principal use of a specific
import, citing Group Italglass U.S.A., Inc. v. United States, 17
CIT 1177, 1178, 839 F. Supp. 866, 867 (1993).
Headings 6911, 6912 and 6913, HTSUS, have been held to be
"use" provisions both by the courts and Customs. See Lenox
Collections v. United States, 19 CIT 345 (1995); HQ 084122; HQ
958999. Because both subheadings 6911.11.10 and 6911.11.52,
HTSUS, are use provisions, Additional U.S. Rule of
Interpretation 1(a), HTSUS, applies. "Principal use," for
purposes of Additional U.S. Rule of Interpretation 1(a), means
the use "which exceeds any other single use of the article."
See U.S. International Trade Commission, Conversion of the
Tariff Schedules of the United States Annotated Into the
Nomenclature Structure of the Harmonized System: Submitting
Report at 34-35 (USITC Pub. No. 1400)(June 1983).
On a case-by-case basis, decisions under the Tariff
Schedules of the United States (TSUS) - the HTSUS predecessor
tariff - are deemed instructive in interpreting HTSUS
provisions, provided the nomenclature remains unchanged and no
dissimilar interpretation is required by the text of the HTSUS.
See H. Rep. No. 100-576, 100th Cong., 2d Sess. 548, 550 (1988),
a conference report to the Omnibus Trade & Competitiveness Act
of 1988, Pub. L. No. 100-418. The nomenclature of the TSUS and
the HTSUS are identical. Both provisions distinguish between
"hotel or restaurant ware and other ware not household ware" and
"household" ware. As the language of the two nomenclatures is
identical, and the issue is essentially the same, we must
consider HQ 082780, dated December 18, 1989, which was based on
the TSUS. The only difference between the TSUS and the HTSUS in
heading 6911 is the standard of use. "Principal use" replaced
the prior standard of "chief use."
While Additional U.S. Rule of Interpretation 1(a) provides
general criteria for discerning the principal use of an article,
it does not provide specific criteria for individual tariff
provisions. However, the U.S. Court of International Trade
(CIT) has provided factors, which are indicative but not
conclusive, to apply when determining whether particular
merchandise falls within a class or kind. They include: general
physical characteristics, the expectation of the ultimate
purchaser, channels of trade, environment of sale (accompanying
accessories, manner of advertisement and display), use in the
same manner as merchandise which defines the class, economic
practicality of so using the import, and recognition in the
trade of this use. See, Kraft, Inc, v. U.S., USITR, 16 CIT 483,
(June 24, 1992)(hereinafter Kraft); G. Heilman Brewing Co. v.
U.S., USITR, 14 CIT 614 (Sept. 6, 1990); and U.S. v. Carborundum
Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert.
denied, 429 U.S. 979; Lenox Collections v. United States, 20 CIT
, Slip Op. 96-30 (Feb. 2, 1996).
Generally speaking, commercial porcelain tableware (other
than household) consists of two basic groups. The first is the
traditionally thick and very heavy tableware used in
institutional food services and the second is the thinner, not
as heavy tableware used for finer or fancier dining. The "fine
chinaware" is used by restaurants, hotels and caterers who want
to offer their patrons fancier tableware.
The American Hotel China is made in three grades based on
wall thickness: Grade (1), Thick china,' 5/16 to 3/8 inch
walls, is used for the more severely handled service, typically
at lunch counters and military messes; Grade (2), Hotel (rolled
edge) China,' 5/32 to 1/4 inch walls, is the normal type for
hotel and restaurant service; and Grade (3), Medium-weight
china,' less than 1/4 inch walls, is furnished for higher-class
eating places where the service is handled with reasonable care,
home usage, and also for numerous jars, trays, etc. in
hospitals. See Felix Singer & Sonja S. Singer, Industrial
Ceramics, Chemical Publishing Co., Inc., New York (1963) at p.
1096; see Rexford Newcomb, Jr., Ceramic Whitewares, Pitman
Publishing Corp., New York (1947) at pp. 227-230; see Arthur E.
Dodd & David Murfin, Dictionary of Ceramics, The Institute of
Materials (3rd ed., 1994) at p. 11.
As set forth in Industrial Ceramics (pps. 1089, 1096),
commercial chinaware is made from the highest grade of raw
materials (predominantly a mixture of kaolin, flint, feldspar
and ball clay), selected to give the inside body as white a
color as possible. It is very high in mechanical strength. The
ware is not translucent in the normal hotel-china thickness, but
it would be translucent if made as thin as other types of
tableware. It is fired to complete vitrification (very low
water absorption--under 0 - 3%), then covered with a fairly
hard, resistant glaze. It has a high alumina content which
gives its characteristic high strength.
From the chapter on "Ceramics in the Home" in Industrial
Ceramics (pps. 1089, 1096), there is also a class of dinnerware
termed American Household China, which is a fine ware of very
high strength (mechanical shock resistance) and translucency,
but tending to cream instead of white. The body type is soft
porcelain and it is used as high-grade domestic tableware. It
uses the same raw materials (32% kaolin) as American Hotel China
except for whiting and dolomite, and like the American Hotel
China, has a low water absorption under 0 - 1%. Another class
of dinnerware, Semi-Vitreous China, is the commonest type of
lower priced tableware in the U.S. which is used for general
household use and contains 19% kaolin, and which has little to
no translucency, medium to high mechanical shock resistance, and
a higher water absorption of 4 - 10%. Id. at pp. 1089, 1095.
You have presented Federal Specification M-C-301L (June 21,
1976) used by the military which sets forth the requirements for
chinaware specifically purchased for mess facilities. The GSA
standard, Commercial Item Description No. A-A-2585A (GSA June 1,
1993), covers "white, restaurant-grade, china dinnerware" and
establishes purchase requirements for performance, design, and
construction requirements for restaurant-grade chinaware. It
requires the article to pass several tests to be considered
hotel grade. These include impact strength, chipping resistance
and thermal shock as well as other requirements. Three samples
each of a dinner plate, dessert dish, cup, and saucer were
submitted to an independent laboratory for testing. The
chinaware failed the impact strength requirement. On the basis
of the lab report, you conclude that since the chinaware failed
the impact strength criteria used by GSA, it must not be
classified as hotel-grade but should be considered household
ware. We note that information on the other GSA requirements
listed on the GSA standard was not provided.
The test results show that the chinaware in issue does not
satisfy the impact and chipping resistance requirements
(Paragraphs 4.5.1 and 4.5.2) of the GSA standard. However, it
does not fall within the class of the traditional thick and
heavy institutional ware to which M-C-301L is applicable.
With regard to using a GSA standard to distinguish
hotel/restaurant ware from household ware, the GSA standard
applies to only chinaware of specific size and dimensions. The
GSA standard dimension is for a dinner plate, 9 inches plus 1/4
inch or minus 1/16 inch, in outside diameter, which is
considerably smaller than the 11 and 11/16 inches dinner plate
at issue; the GSA rim width is 1/2 inch minimum to 3/4 inch
maximum, which is much narrower than the 1 and 11/16 inch rim
width of the prototype; the GSA height is 1 inch, plus 1/8 inch
or minus 3/16 inch, while the prototype's height is less than 1
inch; the GSA bottom thickness is 1/8 inch minimum and the
prototype is lower at 1/16 inch. The GSA standard is not useful
because it requires specific dimensions for hotel grade ware,
i.e., if the ware does not meet the dimensional requirements it
will not be classified as hotel-grade. The GSA standards are
also limited in usefulness because they are specifications for a
narrow line of merchandise, to wit, china tableware for mess
facilities.
It is the use of the chinaware and not the physical
composition that is critical for classification purposes. For
example, in HQ 082780, Customs held that if a plate was
emblazoned with a logo or crest of the hotel or restaurant, it
was found to be hotelware regardless of the fact that without
the logo, crest or symbol the chinaware would be classified as
household chinaware.
In HQ 082780, the Carborundum factors were applied to
determine whether chinaware containing a variety of patterns was
classifiable as hotel or restaurant ware (item 533.52, TSUS) or
household ware (item 533.64, TSUS). That ruling involved
imported fine household china intended for use by restaurants
and hotels in their "finer dining areas." In addition, some of
the household chinaware was modified (e.g., hotel/restaurant
logos/names added to plate designs or patterns removed from the
center of the plate) for sale to restaurants. Customs held that
with the exception of the china containing hotel/restaurant
logos or names, which are properly classified in the class of
china used for hotels and restaurants, the patterned chinaware
sold to and used by restaurants and hotels fell within the class
of china "chiefly used" as household ware since the percentage
of sales and amount of use of household china by restaurants and
hotels did not exceed all other uses. On the facts presented,
HQ 082780 is correct but is distinguishable from the chinaware
at issue.
A review of the literature and pictures of the chinaware in
HQ 082780 reveals that of the 32 patterns, 12 were bone china
(clearly within the household class) and the 20 other patterns
of the "fine dining" chinaware were fully vitrified porcelain
and would be considered either "hotel china" or "medium-weight"
grade commercial china. The importer, Villeroy & Boch
(hereinafter V&B), was both a hotel/restaurant and household
supplier. V&B "fine dining" chinaware was stated to have more
sophisticated decoration, color varieties and body shapes than
typical institutional tableware and was oriented more towards
specialty dining than coffee-shop or banquet type operations.
The fine dining range of V&B's fully-vitrified porcelain
chinaware was also suitable for hotel and restaurant use due to
its use of body design and its "hotel" glaze (a durable, ivory-colored glaze which is exceptionally hard and both scratch and
abrasion resistant). V&B stated in its "Hotel and Restaurant
Division" brochure that the main difference between its "fine
dining" tableware and its hotel ware was the fact that the cups
do not contain the alumina additive. In its line of hotel
pattern, banquet-weight tableware, the facts presented by V&B
were that the plates and cups are reinforced with fully 38.5%
alumina, which reduces chipping and breakage and improves the
heat-retaining qualities and, that the plates have reinforced,
rolled edges, glazed and polished feet to prevent abrasion and
minimize wear when stacking. The weight comparison between the
hotel patterns and the retail patterns given for two plate
patters was 1 lb. and 11 oz. (hotel) and 1 lb. and 1.5 to 5 oz.
(retail) and for cups was 7 to 8.5 oz. (hotel) and 5.5 oz. to 6
oz. (retail).
The chinaware at issue in this case differs from and is
distinguished from the tableware in HQ 082780 on principal use
and on the Carborundum factors. This chinaware belongs to the
"medium-weight" hotel china used for elegant dining. Due to
technological advances, commercial ceramic dinnerware need not
be bulky and lacking in style. Arguably, the differences may be
in appearance but not in use. Thus, we are of the opinion that
if the thickness of the chinaware is more than 1/4 inch, it is
hotel-grade provided that the other characteristics are
satisfied. If the thickness is less than 1/4 inch, it may be
hotel ware or household ware depending on its use.
As a general rule, an article's physical form will indicate
its principal use and thus to what class or kind it belongs.
Should, however, an exception arise so that an article's
physical form does not indicate to what class or kind it belongs
or its physical form indicates it belongs to more than one class
or kind, Customs considers the other enumerated principal use
criteria to determine to which class or kind the article
belongs, as household chinaware or institutional chinaware.
I. General Physical Characteristics
You contend that the subject chinaware falls within the
class of goods that is principally used in the household as that
in HQ 082780, contending that the following physical
characteristics support the position that the rental chinaware
is household chinaware and not institutional. However, we note
that "medium-weight" hotel china has also found an increasing
market for home use; for this purpose it is usually given more
elaborate decoration than is normal in restaurant use. See
Ceramics Whitewares at 228.
First, the chinaware in issue is lighter in weight than
traditional institutional chinaware. The white institutional
plate sample, "Atlantic," weighs 1 lb., 8 oz. (686 grams) and is
9 and 5/8 inches in diameter. It is the "classic" institutional
plate found in a typical cafeteria or mess hall setting. To
demonstrate that some household chinaware is heavier than the
instant prototype, you presented two samples of household
chinaware with very similar design features (e.g., plain white
design with profile) obtained at a retail outlet and a wholesale
company that supplies household articles to retail outlets which
were heavier than the prototype: the "retail" plates were 741
grams (25.94 oz. or 1 lb. and 9.93 oz.) and 607 grams (21.24 oz.
or 1 lb. and 5.24 oz.) in weight, respectively. You conclude
that the differences between the two types of dinnerware warrant
that the less bulkier goods are essentially for household use.
The two examples of heavier "household" plates submitted,
however, demonstrate that the line between household and
hotel/restaurant ware is not as distinct as in the past; there
is much overlap regarding physical characteristics. Also, the
physical characteristics of household china vary widely. The
two samples of the "heavier" retail dinnerware were packed in
cartons (i.e., 20-piece set, containing four 5-piece place
settings) ready for sale at retail. The fine dining chinaware
used in hotels in HQ 082780 is indistinguishable from most
household china in physical characteristics and design. Based
on the weight comparison in HQ 082780, the prototype plate falls
within the household class at 1 lb. and 2.59 oz.
Second, the subject chinaware is far too fragile to
withstand the repetitive use of institutions largely due to its
ornate shapes, curled edges and thin rims. Based upon the
"hotel/restaurant" information in HQ 082780, the "fine dining"
china for hotels has a variety of design shapes (e.g.,
Octavi/Mohn; Audun; Louis XIV; Castello; Facette) that could be
characterized as ornate, but not necessarily too fragile or
delicate for hotel use. The importer in HQ 082780 stated in its
"Hotel and Restaurant Division" brochure that the main
difference between its "fine dining" tableware and its hotel
ware was the fact that the cups do not contain the alumina
additive. We interpret that statement to mean that the cups may
not be as durable is attributable to its composition, but not
necessarily to its style/design. This argument does not take
into account the "medium-weight" hotel china's characteristics.
Third, due to the fragile and delicate nature of the rental
chinaware, the importer will not offer its "Non-chipping
Guarantee" that is standard for its institutional chinaware (in
which it agrees to replace institutional chinaware that is
broken or chipped within one year of purchase). This factor
merely demonstrates that the prototype plate is not as heavy as
traditional institutional chinaware and does not have the
typical (i.e., curled edge) plate design of traditional
institutional ware.
Fourth, rental chinaware is more costly than institutional
ware due to design costs and expenses relating to higher quality
control standards. Rental companies can accept high breakage
and chipping rates for the rental chinaware because they can
recover the cost of the rental chinaware after very few uses.
The price of the china is not a conclusive factor because the
medium-weight hotel china is more expensive than the typical
institutional "thick china."
Fifth, only a limited number of sizes are available in the
rental chinaware, that is, only 3 to 4 plate sizes are available
whereas generally 8 to 9 plate sizes are available with
traditional institutional chinaware. In HQ 082780 there were
typically 6 to 7 plate sizes for "hotel china" and 3 to 4 plate
sizes for "medium-weight" hotel china. The number of plate
sizes does not conclusively establish whether the chinaware
falls in household or in the "medium-weight" commercial china
group.
You assert that brighter metals will be used to create
center and outer band designs on the rental chinaware, and that
"shinier" gold bands are less durable than the burnished gold
used on standard institutional ware where durability is more
important than appearance. Again, this factor is not
dispositive because it goes to the use of the chinaware where
the expectation of the ultimate purchaser (e.g., caterer) is
that the service will be handled with reasonable care versus the
severely handled chinaware of army messes and the like. From
the V&B "Hotel and Restaurant Division" brochure on "hotel-weight" china (p. 3) in HQ 082780, there was an option to have
some semi-custom patterns decorated with gold lines on the rims
which would not be underglazed. This practice demonstrates the
market's aim of having hotel-weight and medium-weight china look
more elegant for the gourmet dining rooms.
Since the plate's physical form does not conclusively
indicate to which class it principally belongs, we will consider
the other court-enumerated Carborundum factors.
II. Expectation of the ultimate purchaser
You contend that the rental companies purchasing this
chinaware expect it to be of "household" quality because they in
turn will market it to individuals (e.g., homeowners) for at-home parties. It is clear that the ultimate purchaser is either
a rental company or a caterer, both commercial entities.
Contrary to your assertions, the end-users of this chinaware
(i.e., the customers of the caterer) are not the ultimate
purchasers of the china because they are buying a service and
not the chinaware.
With a traditional institutional ware purchaser, the
expectation is that the restaurant china will provide a
significant measure of durability which will enable continuous
use without purchasing replacements. You suggest that the
rental companies can recoup the cost of purchasing rental
chinaware, which is more expensive than "institutional" ware,
with only three rentals. This statement supports the contention
that the ultimate purchaser is a commercial entity which is
willing to pay more money for finer looking chinaware than the
traditional mess-hall institutional ware. In other words, it is
a necessary cost of doing business in the rental industry.
Also, we understand that the expectation of the caterer or
rental company will be that the chinaware will be handled in a
reasonable manner, as in "high-class" eating places utilizing
"medium-weight" china, and that the durability is not as great a
concern as is the eye-appealing quality of the chinaware with
its more elaborate shapes, thinner rims and patterns/styles.
The expectation of the caterer or rental company is to replicate
or take the place of the fine bone chinaware typically found in
the home, but with the durability of hotel china to attract the
consumer's business.
III. Channels of Trade
The rental industry has trade shows, trade publications
and catalogues directed to commercial end users and not to the
household trade. SD notes that the suppliers of rental
chinaware will market the chinaware at rental industry trade
shows and that the only attendees at such trade shows are rental
companies and caterers. SD was an exhibitor at the 41st Annual
American Rental Association Convention & Rental Trade Show in
1997.
SD notes that the institutional food service companies do
not participate in the rental industry's trade shows, as they
have separate trade shows. It is well-known that institutional
chinaware is offered for sale by independent sales
representatives to wholesale commercial food service firms who
neither offer nor sell chinaware to retailers.
Since the rental chinaware is not sold through the retail
environment but is marketed and sold at the rental industry
trade shows, this factor tends to suggest that the channel of
trade is commerical and not retail in nature. The fact that
well-known household chinaware retailers are exhibitors at the
rental industry trade shows does not convert the channel of
trade to retail. It is mere evidence of companies trying to
expand their market share by creating a niche.
IV. Environment of Sale (accompanying accessories, manner of
advertisement and display)
SD states that the rental chinaware will be priced and sold
based upon individual 5-piece place settings, and not by
individual pieces or by the dozen, which is the standard method
that institutional chinaware is priced and sold.
This practice of pricing and selling based on place
settings is very similar to household chinaware, which
traditionally offers a dinner plate, salad/bread & butter plate,
soup/cereal bowl, cup and saucer as the 5-piece place settings.
In addition, SD asserts that rental companies will make
available other home party accessory items with the chinaware,
such as tents, tables, chairs, expensive linens and high-end
flatware.
The "medium-weight" hotel china is indistinguishable from
the household china in terms of selling practices regarding
place settings. In HQ 082780, there typically was a choice of 3
to 4 flat plate sizes (ranging in size from 6 1/4 inch or 6 3/4
inch to 10 1/4 inch to 10 1/2 inch) in each of the fine
porcelain chinaware and bone chinaware that was used in hotels
and restaurants, which was found to be household chinaware.
Likewise, accompanying accessory items to many of the patterned
place settings for the fine dining chinaware in HQ 082780 were
extensive, including many of the following in each pattern line:
egg cups, cream soup cup and saucer, coffeepot (48 oz. [6
persons] and 28 oz. [2 persons]), teapot (38 oz. [6 persons]),
covered sugar, creamer, salt/pepper set, covered butter dish,
covered gravy boat, pickle dish and/or candlestick. Serving
pieces of a variety of sizes were also available. These
accessories are tailored to household use, and not table
service.
In contrast, the chinaware grouped in the "hotel-weight"
range in HQ 082780 had a narrower range of accessories tailored
to suit the individual. The specific pieces of "hotel china"
are designed to serve the individual rather than the family.
For example, the "Cortina 2000 series," a Grade 2 "hotel china,"
encompasses accessories which have a smaller volume capacity
such as an 11 oz. coffeepot, a 10 and 1/2 oz. teapot, a 3 and
1/2 oz. creamer. The plates are available in 6 or 7 different
sizes (from 6 3/4 inch to 12 1/4 inch).
Although the pricing and selling of rental chinaware by
place setting arguably falls within the class of household
china, the manner of advertisement and display are
representative of commercial chinaware sales. The manner of
advertisement in both the institutional and rental industry is
geared to the industry and not to the general public. The trade
publications and catalogues in the institutional chinaware are
directed to wholesale commercial food service firms and
commercial end users. The chinaware is displayed via brochures
and at trade shows in place settings. Orders are made directly
through the suppliers to the manufacturers. The instant
chinaware is not in the retail market and it cannot be obtained
in a department store or other retail establishment whereby the
consumer could register for it. Thus, it falls outside the
class or kind principally used as household ware.
V. Usage in the same manner as merchandise which defines the
class
SD contends that since the chinaware is used at home
parties, it is within the class of household ware. We disagree.
As noted in the discussion of the "expectation of the ultimate
purchaser," the commercial end-users expect to use the
chinaware, which attempts to replicate the look of the expensive
fine household bone china, with reasonable care, either at the
home or the banquet hall. The intended use will be the same as
that accorded the "medium-weight" hotel china used in the fancy
eating establishments which is manufactured to withstand the
rigors associated with commercial use. The rental chinaware
will be presumedly transported from location to location, and
the soiled chinaware set in crates for insertion into commercial
dishwashers. This usage will be commercial in nature, unlike
the delicate use accorded to household china.
VI. Economic practicality of so using the import
See discussion in II. above.
VII. Recognition in the trade of this use
SD contends that household chinaware suppliers are selling
their wares through the rental trade shows to take advantage of
this growing market. If household chinaware dealers who
typically market their chinaware directly to consumers or to the
household trade are also now marketing their chinaware to the
rental industry, this factor would suggest that commercial end
users are willing to purchase retail chinaware. However, the
general public is not invited to these industry trade shows.
Based upon the chinaware in HQ 082780, the evidence
presented showed that the sales of the chinaware to
hotels/restaurants did not exceed 51%, and as such, "chief use"
was not met and the chinaware was thus classified as household
china. In this case, the relevant standard is "principal use,"
a different standard than the prior tariff's "chief use" as
defined earlier. From the evidence presented in the "channels
of trade" discussion above, sales apparently are targeted to
commercial entities, i.e., rental companies and caterers. As
such, we find that there is a recognition in the trade that this
class or kind of merchandise is principally used commercially,
for other than household use.
Upon weighing all the Carborundum factors, we must conclude
that the majority of the factors support principal use in the
class of commercial chinaware. There exists an overlap between
"medium-weight" hotel china for both household and commercial
use on the current market. The distinction between the
household and non-household ware is based upon the usage of the
tableware rather than the actual physical composition. Although
there is no tariff definition for hotel china and other non-household ware, it is the use that is controlling irrespective
of the various physical properties. The chinaware at issue is
of the class or kind principally used for other than household
use. According, the chinaware is properly described by
subheading 6911.10.10, HTSUS.
HOLDING:
Tableware used in the rental industry is properly
classified as tableware for hotel or restaurant and other non-household ware under subheading 6911.10.10, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division