CLA-2 RR:CR:GC 962475 JGB
Port Director
Port of New York
c/o Chief, Residual Liquidation and Protest Branch
6 World Trade Center, Room 761
New York, NY 10048-0945
RE: Protest 1001 98 104697; Artificial Foliage
Dear Director:
This is a decision on Protest 1001 98 104697, against your decision in the classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS). The entries, made in 1997, were liquidated August 21, 1998, and the protest timely filed on November 4, 1998. Our decision follows:
FACTS:
The merchandise consists of assorted artificial flowers and foliage claimed to be Christmas holiday articles. Protest 1001 98 104697 includes merchandise liquidated as articles of artificial foliage of plastics under subheading 6702.10.20, HTSUS, and merchandise liquidated as articles of artificial foliage of man-made fibers under subheading 6702.90.35, HTSUS. The styles include, among other things, gold painted grape leaves, a spray of roses with both gold leaves and gold trimmed flowers, and a spray of flowers with both green leaves and gold trimmed flowers.
The protestant claims that the merchandise is classified in heading 9505, HTSUS, specifically in subheading 9505.10.25, 9505.10.4020, and 9505.10.5020, HTSUS, the provision for “Festive, carnival or other entertainment articles . . . parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof. . . .”
ISSUE:
Whether the gold leaves, gold trimmed flowers and floral sprays with gold decoration are classified in heading 9505, HTSUS, as festive articles, or as artificial flowers and foliage in heading 6702, HTSUS, as liquidated.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined 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 GRI may then be applied. The Explanatory Notes (EN) 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 GRI.
In Midwest of Cannon Falls, Inc. v. United States, Slip Op. 96-19 (Ct. Int’l Trade, 1996), aff’d in part, rev’d in part, 122 F.3d 1423, Appeal Nos. 96-1271, 96-1279 (Fed. Cir. 1997) (hereinafter Midwest), the Court addressed the scope of heading 9505, HTSUS, specifically the class or kind of merchandise termed “festive articles,” and provided new guidelines for classification of such goods in the heading. In general, merchandise is classifiable as a festive article in heading 9505, HTSUS, when the article, as a whole:
1. Is not predominately of precious or semiprecious stones, precious metal or metal clad with precious metal;
2. Functions primarily as a decoration or functional item used in celebration of, and for entertainment on, a holiday; and
3. Is associated with or used on a particular holiday.
Based upon a review of the articles subject to the Midwest decision, Customs is of the opinion that the Court has included within the scope of the class “festive articles,” decorative household articles which are representations of an accepted symbol for a recognized holiday, and utilitarian/functional articles that are three-dimensional representations of an accepted symbol for a recognized holiday. See the Informed Compliance Publication on the Classification of Festive Articles published in the Customs Bulletin, Volume 32, Numbers 2/3, dated January 21, 1998.
In addition to the criteria listed above, the Court considered the general criteria for classification set forth in United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979 (hereinafter Carborundum). Therefore, with respect to decorative and utilitarian articles related to holidays and symbols not specifically recognized in Midwest or in the Customs Bulletin dated January 21, 1998, Customs will also consider the general criteria set forth in Carborundum to determine whether a particular good belongs to the class or kind “festive articles.” Those criteria include the general physical characteristics of the article, the expectation of the ultimate purchaser, the channels of trade, the environment of sale (accompanying accessories, manner of advertisement and display), the 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.
In considering the Midwest standards, none of the articles subject to the protest is predominately of precious or semiprecious stones, precious metal or metal clad with precious metal. With respect to the second criterion, the articles are principally decorative; however, they do not appear to have a holiday association.
With respect to the third criterion, they are not associated with a particular holiday in the sense that they would not immediately suggest the Christmas season. The importer has provided evidence through invoice notations that that articles are destined to be offered for sale during the Christmas season with payment arrangements that postpone the due date until after the holiday. We would not dispute that more of these articles may be stocked and sold around Christmas than at other times of the year. However, the purchasing of the articles at a particular time does not mean that they fall into the class of seasonal festive merchandise. The articles also fail to meet several of the Carborundum standards:
As to physical characteristics, the general physical characteristics of the foliage or flowers do not dedicate them to use on a specific holiday. The fact that the article is gold colored does not provide any practical limitations to use in and around Christmas. Like red and green items, gold and silver metallic items are bought and sold for use year round. Other than the gold color, there is nothing about roses and grape leaves which dedicate them to use at Christmas time. This one element of the Carborundum test appears to be most relevant in our determination of the instant case.
The expectation of the ultimate purchaser would be to buy these flowers or foliage to decorate the home in the same way that festive articles would decorate the home. However, there is nothing about these flowers and foliage that precludes them from being used as a year round decoration. While the gold additions to the floral sprays and foliage might be considered highly decorative, therefore not for everyday use, these articles would work equally well in decoration for wedding receptions, golden anniversary celebrations or at any time that natural flowers might be unavailable or require augmentation.
The channels of trade in which this merchandise moves appears to be the channels of trade of artificial flowers. This importer does not appear to be principally an importer of Christmas ornaments, unlike the plaintiff in the Midwest case. In Midwest, the fact that the importer appeared to deal extensively with Christmas goods appears to have carried some weight in the final decision.
The environment of the sale is to floral designers and independent florist shops from a large panel walk-in van. This merchandise may be advertised or shown with other merchandise at Christmas time, but this merchandise is not unique to this holiday. It is noted that photographs of the interior of the van show hanging Christmas ornaments and Christmas wreaths along with a substantial amounts of merchandise that is unrelated to Christmas. However, the association of Christmas goods with goods merely claimed to be festive will not convert the latter into to the former.
As to the use in the same manner as merchandise that defines the class, these articles are not used in the same manner of merchandise that defines the class, because there is nothing that would hinder their staying out all year. We do not dispute that they are principally decorative. However, they or similar articles are plausibly sold and used all year around, not just during a particular holiday celebration, distinguishing them from true articles belonging in the class of festive goods.
The economic practicality of using the import in a manner consistent with the class does not seem to be a relevant consideration in this case. Customs disagrees that the product is so designed and used as to be suitable for sale only in connection with the Christmas holiday. Many articles have their best sales at the Christmas season, e.g., Teddy Bears, toy drums, fruitcakes, and some have claimed, even personal computers. This does not mean that they are "seasonal items" or "festive articles" in the tariff sense. There is no doubt that so-called Christmas toys, fruitcakes, and personal computers are marked down after the passing of Christmas, but that fact alone does not confirm their identity as festive articles.
As to recognition in the trade of this use [as a festive article], although the importer may claim that this particular items will be sold in anticipation of Christmas and even that the bulk of the sales may occur at that time; sale at one time of year does not preclude sale or use at another time of year, or indiscriminately throughout the year. In addition, decorative artificial foliage is a class of merchandise established by the HTSUS, one in which the instant merchandise belongs.
Because the artificial flowers and foliage are not part of the class of festive articles, they are ineligible for classification in heading 9505, HTSUS, and are properly classified as artificial flowers and foliage of plastics or of man-made fibers under subheadings 6702.10.20 and 6702.90.35, HTSUS, respectively.
HOLDING:
The protest should be DENIED.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division