CLA-2 RR:TC:MM 959831 HMC
Mr. Joel K. Simon and
Arlen T. Epstein
Serko & Simon
One World Trade Center
Ste. 3371
New York, NY 10048
RE: Wax castings of rings with diamonds or precious stones; GRI
1; GRI 2(a); Heading 7116; Subheading 7116.20.15; Subheading
7116.20.50; EN 71.16; articles of jewelry; articles of personal
adornment and other decorated articles, EN 7116 (A); General EN
3, Section XIV; Heading 7117; HQ 959687.
Dear Mr. Simon and Mr. Epstein:
This is in response to your letter to the Area Director of
Customs, New York, dated September 30, 1996, on behalf of M.
Fabrikant & Sons, Inc., regarding the tariff classification of
wax castings of rings set with diamonds or other precious stones
under the Harmonized Tariff Schedule of the United States. Your
letter was forwarded to this office for a reply. Please note
that HQ 959687 involving the same merchandise was also issued on
this date.
FACTS:
The merchandise under consideration is a wax casting of a
ring with a diamond or other precious stone set in the wax
casting. The merchandise is an intermediate product in the
process known as the Lost Wax Casting Technique which is used to
produce a gold ring set with stone.
Before the product is imported a rubber mold is produced
with a negative impression in the shape of a ring and from this
rubber mold a wax casting is made. Precious stones are then set
in place on this wax casting. It is this product, the wax
casting with the precious stones mounted that will be shipped to
the United States.
In the United States, the wax castings and precious stones
are encased in a plaster of paris which is allowed to harden.
After hardening the wax castings are baked so that the wax
evaporates, leaving a hollowed out negative mold with the
diamonds or precious stones held in place. Molten gold is then
injected into the empty mold previously filled with wax and
allowed to cool down. Once the gold is hard, the plaster is
dissolved leaving the gold ring set with diamonds or other
precious stones. The gold ring is then finished and polished.
The provisions under consideration are as follows:
7116 Articles of natural or cultured pearls, precious
or semiprecious stones (natural, synthetic or
reconstructed):
7116.20 Of precious or semiprecious stones (natural,
synthetic or reconstructed):
Articles of jewelry:
7116.20.05 Valued at not over $40 per
piece...4.6%
7116.20.15 Other...6.5%
Other
7116.20.50 Other...2.7%
* * * * *
7117 Imitation jewelry:
ISSUE:
What is the tariff classification of wax castings set with
diamonds or other precious stones.
LAW AND ANALYSIS:
You contend that the merchandise is appropriately classified
under subheading 7116.20.50 of the Harmonized Tariff Schedule of
the United States, (HTSUS) and not under heading 7117.
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.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized system. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes
the notes should always be consulted. See T.D. 89-80, 54 Fed.
Reg. 35127, 35128 (Aug. 23, 1989).
General EN 3 to Section XIV, HTSUS, states that Chapter 71
includes "in general, articles made wholly or partly of natural
or cultured pearls, diamonds or other precious or semi-precious
stones (natural, synthetic or reconstructed), precious metals or
metal clad with precious metal (headings 71.13 to 71.16)...." EN
71.16 at page 963 states that
This heading covers all articles (other than those excluded
by Notes 2(b) and 3 to this Chapter), wholly of natural or
cultured pearls, precious or semi-precious stones, but not
containing precious metals or metals clad with precious
metal (except as minor constituents)(see Note 2(b) to this
Chapter).
EN 71.16 thus includes:
(A) Articles of personal adornment and other decorated
articles (e.g. clasps and frames for handbags, etc; combs,
brushes; ear-rings; cuff-links, dress-studs and the like)
containing natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed), set
or mounted on base metal (whether or not plated with
precious metal), ivory, wood, plastics, etc.
It includes pearls or stones graded according to size,
quality, shade, etc, and constituting an article ready for
use as jewelry. But the heading excludes ungraded or graded
pearls and ungraded stones merely temporarily strung for
facility of transport without any setting or fitting of
metal or other material; these fall in heading 71.01, 71.03
or 71.04 (see Explanatory Notes to headings 71.01 to 71.03).
We believe that parts (A) and (B) to EN 71.16, at page 964,
help in determining whether an article falls under heading 7116.
They state that heading 7116 includes articles of personal
adornment, stones graded according to size and constituting an
article ready for use as jewelry, and other articles consisting
wholly or partly of precious or semi-precious stones which may
also contain other materials. Accordingly, we must determine if
the wax castings with diamonds or precious stones fall under any
of these two parts.
EN 71.16 (A) gives various examples of articles of personal
adornment and other decorated articles such as clasps and frames
for handbags, etc; combs, brushes; ear-rings; cuff-links, dress-studs. Articles identified in Part (A) are similar to those
articles defined as "articles of jewelry" of note 9 to Chapter
71. Note 9 is provided for purposes of headings 7113 and it is
also used by heading 7117. We believe that the definition of
note 9 to Chapter 71 for the expression "articles of jewelry" is
relevant in this instance. It is instructive in ascertaining the
meaning of "articles of jewelry" of subheading 7116.20 and
"articles of personal adornment and other decorated articles" of
EN 71.16(A). Article of jewelry is defined in note 9 to Chapter
71 as "(a) any small objects of personal adornment (gem-set or
not)...; and (b) articles of personal use of a kind normally
carried in the pocket, in the handbag or on the person...."
It is well settled that imported merchandise must be
classified with reference to its condition when imported. As
imported, diamonds or precious stones are set in place on a wax
casting molded as a ring. The product is an intermediate product
which is used to produce a gold ring set with precious stones.
This article is not going to be given a personal use or carried
in the pocket, in a handbag or on the person. It is not a ring
intended to be worn or used as an article of personal adornment
or for any other personal use. If worn, the wax casting would
break and diamonds or precious stones fall. The wax casting is a
convenient way to transport and store the diamonds or precious
stones until they become part of a ring in the United States. It
is not permanent and lasting. Thus, the wax casting with
diamonds and precious stone cannot be considered an article of
jewelry or personal adornment under heading 7116.
However, pearls or stones graded according to size, quality,
shade, etc. and constituting an article ready for use as jewelry
are included in this heading. Based on the information
presented, we conclude that the diamonds or precious stones are
sorted and graded before they are attached to the wax castings.
No further manufacturing process is done to the diamonds or
precious stones. Similarly, in their condition as imported, the
wax castings will not be further processed. The wax castings
provide an inexpensive way for shipping the diamonds or precious
stones to the United States. Once in the United States the
precious stones are temporarily stored before they are used in
the manufacture of rings. Therefore, inasmuch as the wax
castings are set with graded diamonds or precious stones, they
are described in heading 7116; and, since articles made of wax
castings set with graded diamonds or precious stones are not
articles of jewelry, they are classifiable under subheading
7116.20.50., as articles of precious stones: other: other:.
As to classification under heading 7117, imitation jewelry,
note 11 to Chapter 71, HTSUS, states that "for purposes of
heading 7117, the expression imitation jewelry' means articles
of jewelry within the meaning of paragraph (a) of note 9...not
incorporating natural or cultured pearls, precious or
semiprecious stones..." We agree with your assertion that the
wax castings with diamonds or precious stones are excluded from
classification in heading 7117 by virtue of chapter note 11,
since they contain precious stones.
HOLDING:
Under the authority of GRI 1, wax castings set with graded
diamonds or other precious stones are properly classified under
subheading 7116.20.50, HTSUS, as "Articles of natural or cultured
pearls, precious or semiprecious stones (natural, synthetic or
reconstructed):... Of precious or semiprecious stones (natural,
synthetic or reconstructed):... Other:... Other." The rate of
duty is 2.7% ad valorem.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division