CLA-2 RR:TC:MM 959844 JRS
Mr. Carlos A. Ospina
All World Inc.
P.O. Box 52-2176
Miami, FL 33126
RE: Ornamental or decorative "electric" flag; composite good;
heading 6307, HTSUS, as other made up articles, and heading
9405, HTSUS, as lamps and lighting fittings; GRI 3(b);
essential character; EN VIII GRI 3(b); HQ 959769
Dear Mr. Ospina:
This is in response to your letter dated September 11, 1996,
on behalf of your client, IPI (U.S.A.) Inc., concerning the
country of origin marking and classification under the Harmonized
Tariff Schedule of the United States (HTSUS) of several
ornamental flags including an "Electric Halloween Flag." A
sample was submitted for our examination on October 9, 1996, with
an attached letter from Ms. Diane Kwatcher of IPI (U.S.A.) Inc.,
listing the breakdown of cost in U.S. dollars and percentages.
In HQ 959769 issued to you on October 11, 1996, a country of
origin determination was provided for the flags. The instant
ruling relates to the tariff classification of the "Electric
Halloween Flag."
FACTS:
The merchandise is described as an electric flag, consisting
of two flags, sewn together (double-sided), with solid brass
grommets and PVC inserts, into which electric lights may be
placed. The flag and a separately-boxed electric light set are
packaged within a plastic zipper bag. A cardboard paper strip
label is stapled onto the plastic zipper bag which contains a
description of the contents and two metal ring inserts, for the
purpose of hanging on a retail rod. The flag itself measures
28" x 60" and is constructed of 210 Denier nylon. The nylon
fabric is made in Taiwan although it is sewn in China. The
package is labeled "Made in China."
There are 25 brass grommet and PVC light openings per flag
side for a total of 50 light openings which are arranged in a
random fashion over the design of a witch on a broomstick in
front of a full moon. The electric light set contains 50 bulbs
in addition to 2 extra steady-burn bulbs and is described on its
country of origin label (made in China) as "Christmas light set
for indoor use and outdoor use" and has a separate U.L. approved
label for 115 - 125 volts.
The breakdown of the total cost of the electric flag is
listed on the October 9, 1996, letter as follows: fabric is
32.46% of the total cost; labor is 36.72%; zipper bag is 3.20%;
light set, including prices for brass grommets and PVC inserts is
17.42%; carton is 9.01%; and inland transportation is 1.19%.
ISSUE:
Whether the electric decorative flag is classified under
heading 6307, HTSUS, as other made up [textile] articles,
including dress patterns, or under heading 9405, HTSUS, as lamp
and lighting fittings including searchlights and spotlights and
parts thereof, not elsewhere specified or included.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's). GRI
1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
In the event that a good cannot be classified solely on the basis
of GRI 1, and if the headings and legal notes do not otherwise
require, the remaining GRI's may then be applied. The headings
under consideration are 6307 and 9405.
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN's) to the HTSUS, although not dispositive,
provides guidance in understanding the scope of the headings and
GRIs in the proper interpretation of the HTSUS. See T.D. 89-90,
54 FR 35127, 35128 (August 23, 1989).
The EN to heading 6307 indicates that the heading covers
made up articles of any textile material which are not included
more specifically in other headings of Section XI or elsewhere in
the Nomenclature. EN (4) to heading 6307 (p. 867) states that
the heading includes, in particular: "Flags, pennants and
banners, including bunting for entertainments, galas or other
purposes." The EN to heading 9405 states that lamps and lighting
fittings of this group can be constituted of any material
(excluding those materials described in Note 1 to Chapter 71) and
use any source of light (candles, oil, petrol, paraffin (or
kerosene), gas, acetylene, electricity, etc.). EN 94.05 (pg.
1580-1582) states, in pertinent part, that heading 9405, HTSUS,
covers, in particular: "[Specialised lamps, e.g.: darkroom lamps;
machine lamps (presented separately); photographic studio lamps;
inspection lamps (other than those of heading 85.12);
non-flashing beacons for aerodromes; shop window lamps; electric
garlands (including those fitted with fancy lamps for carnival or
entertainment purposes or for decorating Christmas trees).
Heading 6307, HTSUS, covers other made up textile articles,
including dress patterns.
Heading 9405, HTSUS, covers, lamps and lighting fittings
including searchlights and spotlights and parts thereof, not
elsewhere specified or included. Since no HTSUS provision
provides for the article, as a whole, that is, a flag containing
an illuminating electric light set, it is not classifiable at the
GRI 1 level. Thus, we go to GRI 2 which states that the
classification of goods consisting of more than one material or
substance shall be according to the principles of GRI 3.
GRI 3 provides that when, by application of rule 2(b) or for
any other reason, goods are, prima facie, classifiable under two
or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific
description shall be preferred to headings providing a
more general description. However, when two or more
headings each refer to part only of the materials or
substances contained in mixed or composite goods or to
part only of the items in a set put up for retail sale,
those headings are to be regarded as equally specific
in relation to those goods, even if one of them gives a
more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different
materials or made up of different components, and goods
put up in sets for retail sale, which cannot be
classified by reference to 3(a), shall be classified as
if they consisted of the material or component which
gives them their essential character, insofar as this
criterion is applicable.
In this case, both headings 6307 and 9405 refer to only part
of the article, and are equally specific. Since the article is a
composite good consisting of different components, classification
is determined by application of GRI 3(b), HTSUS. We note that we
do not consider the flag and lights packaged within the plastic
zipper bag to be a "set" for classification purposes, but rather
that the components of this composite good are merely put up in a
common packing.
We must determine what is the essential character of the
electric flag. EN VIII to GRI 3(b) (p. 4) explains that the
essential character may be determined by "the nature of the
material or component, its bulk, quantity, weight or value, or by
the role of the constituent material in relation to the use of
the goods." It is our opinion that the flag imparts the
essential character to the article, and not the presence of the
electric lights. The flag can be used regardless of the
separate light set included in the package. The flag functions
as a decorative flag with or without the lights working. If the
lights are used, the flag can be said to be visually enhanced by
the little dots of light, but the flag is nevertheless decorative
with its brightly colored pieces of fabric used for the witch
even without the lights. If used in the dark, the witch on the
broomstick would not be seen because the lights are arranged in a
random pattern (as stars in the sky) and do not outline the
figure of the witch riding her broomstick. The price of the
fabric is the most expensive material cost (32.46%); however, the
cost of the light set and parts (17.42%) is almost half less than
the fabric's cost. We, therefore, find that the ornamental
"electric" flag is properly classified in subheading 6307.90.99,
HTSUS, the provision for "Other made up articles, including dress
patterns: Other: Other: Other, Other: Other."
The country of origin determination for this ornamental flag
is the same as that in HQ 959769 (October 11, 1996) -- Taiwan.
Therefore, the sample is incorrectly marked because the cardboard
strip label stapled onto the plastic zippered bag in which the
flag and the separately-boxed lights are packaged merely contains
the origin statement "Made in China." Section 134.24(d)(2),
Customs Regulations (19 CFR 134.24(d)(2)), states that containers
of imported merchandise which are sold without normally being
opened by the ultimate purchaser, shall be marked to indicate the
country of origin of their contents. Thus, the container must be
marked to separately indicate that the origin of the flag is
Taiwan and the origin of the lights is China.
HOLDING:
The ornamental "electric" flag is properly classified in
subheading 6307.90.99, HTSUS. Articles classified under this
tariff provision are dutiable at the rate of 7% ad valorem.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division