CLA-2 RR:CR:TE 963539 jsj
Port Director
U.S. Customs Service
Second and Chestnut Streets
Philadelphia, Pennsylvania
19106
Attention: Team 172
Re: Application for Further Review of Protest No.: 1101-99-100235
Lunch Box Style Metal Containers; Round Metal Containers; Dog Bone Shaped
Metal Containers; Tinplated Iron or Steel; Subheading 7326.90.1000, HTSUS.
Dear Port Director:
The purpose of this correspondence is to address the Application for Further Review of Protest Number: 1101-99-100235, dated September 9, 1999. The Importer of Record and Protesting Party is American Specialty Confections, Inc.
The Customs Service issued a Notice of Action (Customs Form 29) to American Specialty Confections, Inc. (American Specialty Confections). The Notice of Action is dated May 21, 1999. It indicated that a rate advance had been taken based on the conclusion of the Customs Service Import Specialist that the Importer had not properly classified “lunch boxes.”
The Importer, subsequent to receipt of the Notice of Action and liquidation, filed a Protest challenging Customs classification. American Specialty Confections’ Protest accompanied an Application for Further Review that was approved. The Importer’s application for further review was based on 19 C.F.R. 174.24(a), which provides for further review when the decision of the port is alleged to be inconsistent with a Headquarters ruling or a decision made at any port concerning the same or substantially similar merchandise.
A review of the Protest (Customs Form 19) and the Customs Protest and Summons Information Report (Customs Form 6445) indicates that the protest was timely filed pursuant to 19 U.S.C. 1514 (c) (3) (West 1999) and 19 C.F.R. 174.12 (e) (1). The Protest was filed on September 9, 1999, within ninety days of the liquidation of the entries.
This protest decision is being issued subsequent to the following: (1) A review of the Protest; (2) A review of the Customs Protest and Summons Information Report; (3) A review of the submission of counsel for the Importer dated August 29, 2000; (4) A review of the facsimile submission received from the Customs broker for the Importer on January 29, 2002; (5) A review of the samples; and (6) A review of the American Specialty Confections sales and marketing literature, particularly its 1999 catalogue.
FACTS
The articles in issue are threefold: (1) Metal containers with handles and latches in the shape of traditional school lunch boxes, only smaller; (2) Metal containers with handles and latches that are round with flat bottoms; and (3) Metal containers in the shape of dog bones that do not have handles or latches.
Traditional School Lunch Box Shaped Containers:
The metal containers in the shape of traditional school lunch boxes measure seven and five-eighths (7 5/8) inches in width, six (6) inches in height and two and seven-eighths (2 7/8) inches in depth. They have flat plastic handles that are attached to the top of the container and swivel from side to side. One of the sides of the containers opens outward by means of two loop-style hinges on the bottom. The opening secures closed through the use of a metal clasp on the top.
The containers are made of tinplated steel, however, they are not constructed for long-term or rigorous use. The handle hinges and the metal clasp are not designed or constructed for significant wear.
The containers will be painted with various motifs. The traditional school lunch box styles in issue in this Protest, as identified by the Protestant, include: (1) Bazooka Lunch Box, Item Number: 88097T; (2) Candyland Lunch Box, Item Number: 88075T; (3) GI Joe Ast. Lunch Box, Item Number: 88187T; (4) GI Joe Frogman Lunch Box, Item Number: 88186T; (5) Howdy Doody Lunch Box, Item Number: 88189T; (6) Curious George Bicycle, Item Number: 88076T; (7) GI Joe, Item Number: 88072T; (8) Tootsie Roll, Item Number: 88077T; (9) Pat the Bunny Lunch Box, Item Number: 88245T; and (10) Dick Tracy Lunch Box, Item Number: 88250T.
Round Containers With Flat Bottoms:
The round metal containers with flat bottoms measure six and one-fourth (6¼) inches in width, five and three-fourths (5 ¾) inches in height and three (3) inches in depth. They have round plastic handles that are attached to the top of the container and swivel from front to back. One of the sides of the containers opens outward by means of a single loop-style hinge on the bottom. The opening secures closed through the use of a metal clasp on the top.
The containers are made of tinplated steel, however, they are not constructed for long-term or rigorous use. The handle hinges and the metal clasp are not designed or constructed for significant wear.
The containers will be painted with various motifs. The round containers with flat bottoms in issue in this Protest, as identified by the Protestant, include: (1) Betty Boop Round Lunch Box, Item Number: 88188T; and (2) Oreo Round Lunch Box, Item Number: 88067T.
Dog Bone Shaped Containers:
The dog bone shaped metal containers come in two styles: (1) Milk Bone Shaped Tin, Item Number: 44401T (also identified in the 1999 American Specialty Confections catalogue as Item Number: 290021); and (2) Snoopy Bone Shaped Tin, Item Number: 88209T (also identified in the 1999 American Specialty Confections catalogue as Item Number: 882097).
The Milk Bone container measures six and one-fourth (6 ¼) inches in width, three and one-half (3 ½) inches in height and two and one-fourth (2 ¼) inches in depth. The Snoopy Bone container measures nine and one-fourth (9 ¼) inches in width, three (3) inches in height and five (5) inches in depth.
These containers do not have handles or latches. The top of each container, with the words “Milk Bone” or “Snoopy,” lifts off.
The containers are made of tinplated steel, however, they are not constructed for long-term or rigorous use.
Customs is advised that the containers will be imported empty. The traditional school lunch box style and the round style will be filled with candy or cookies subsequent to importation. The dog bone shaped containers will be filled with dog treats.
The Customs Service is advised that China is the country of origin of all of the containers addressed in this Protest decision.
ISSUE
Did Customs properly liquidate the entries in subheading 4202.19.0000, Harmonized Tariff Schedule of the United States Annotated, based on the conclusion of the Customs Service Import Specialist that the Importer of Record had incorrectly entered the above-described metal containers in subheading 7310.29.0050, HTSUSA, and subheading 7326.90.1000, HTSUSA ?
LAW AND ANALYSIS
The federal agency responsible for initially interpreting and applying the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is the U.S. Customs Service. The Customs Service, in accordance with its legislative mandate, classifies imported merchandise pursuant to the General Rules of Interpretation (GRI) and the Additional U.S. Rules of Interpretation.
General Rule of Interpretation 1 provides, in part, that classification decisions are to be “determined according to the terms of the headings and any relative section or chapter notes.” General Rule of Interpretation 1. General Rule of Interpretation 1 further states that merchandise which cannot be classified in accordance with the dictates of GRI 1 should be classified pursuant to the other General Rules of Interpretation, provided the HTSUSA chapter headings or notes do not require otherwise. According to the Explanatory Notes (EN), the phrase in GRI 1, “provided such headings or notes do not otherwise require,” is intended to “make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount.” General Rules for the Interpretation of the Harmonized System, Rule 1, Explanatory Note (V).
The Explanatory Notes constitute the official interpretation of the Harmonized System at the international level. See Joint Explanatory Statement supra note 1, at 549. The Explanatory Notes, although neither legally binding nor dispositive of classification issues, do provide commentary on the scope of each heading of the HTSUS. The EN’s are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989); Lonza, Inc. v. United States, 46 F. 3rd 1098, 1109 (Fed. Cir. 1995).
Commencing classification of the traditional school lunch box shaped containers, the round containers with flat bottoms and the dog bone shaped containers in accordance with the dictates of GRI 1, the Customs Service examined the headings of Chapter 73, Articles of Iron or Steel, of the HTSUSA. Customs concludes that all of the containers subject to this protest are properly classified in heading 7326, HTSUSA, pursuant to GRI 1. Heading 7326, HTSUSA, more specifically than any other heading in the tariff schedule, describes the containers.
Customs notes that heading 7326, HTSUSA, is a residual or basket provision into which merchandise of iron or steel not described by any other heading of Chapter 73 is classified. Although the classification decision arrived at by this office relies on General Rule of Interpretation 1, this determination was made by a process of elimination, only subsequent to considering all of the headings of Chapter 73, particularly headings 7310, HTSUSA, and 7323, HTSUSA.
Heading 7310, HTSUSA, provides for “Tanks, casks, drums, cans, boxes and similar containers, for any material (other than compressed or liquefied gas), of iron or steel, of a capacity not exceeding 300 liters, whether or not lined or heat insulated, but not fitted with mechanical or thermal equipment.” The EN to heading 7310, HTSUSA, Explanatory Note 73.10, provides an illustrative list of “larger containers,” as well as “smaller containers” that are properly classified in heading 7310, HTSUSA. Explanatory Note 73.10. The smaller containers, relevant to this protest, “include boxes, cans, tins, etc.” and are “mainly used as sales packings for butter, milk, beer, preserves, fruit or fruit juices, biscuits, tea, confectionery, tobacco, cigarettes, shoe cream, medicaments, etc.” Explanatory Note 73.10.
Although the containers subject to this protest fall within the EN description of “boxes, cans, tins, etc.,” they are not “mainly used as sales packings.” Explanatory Note 73.10. The containers in issue, although intended to be used by the importer as packing for candy or other edibles for people or animals, have uses beyond sales packing. The Importer’s submission that accompanied its Protest refers to the containers as collectibles and an examination of its catalogue suggests that the containers have intended uses beyond packing. Customs will not suggest the numerous uses to which these containers may be put, but is of the conclusion that these containers are significantly more that sales packing. See generally HQ 963670 (April 12, 2002) (discussing merchandise classified in heading 7310, HTSUSA, and providing a list of precedential Customs Service ruling letters).
Heading 7323, HTSUSA, provides, in pertinent part, for the classification of “Table, kitchen or other household articles and parts thereof, of iron or steel.” The Explanatory Notes to heading 7323, HTSUSA, state that this heading “comprises a wide range of iron or steel articles…used for table, kitchen or other household purposes.” Explanatory Note 73.23. The EN further provides an extensive list of articles considered being for kitchen, table and other household uses. See Explanatory Note 73.23. Kitchen articles include items “such as saucepans, steamers…; frying pans…; kettles; colanders; …jelly and pastry moulds;…kitchen storage tins and canisters…funnels.” Explanatory Note 73.23(A)(1). Articles for table use include “trays, dishes, plates…sugar basins, butter dishes…coffee pots…tea pots; cups, mugs…cruets; knife rests;…serviette rings, table cloth clips.” Explanatory Note 73.23(A)(2). Items enumerated as “other household articles” encompass articles such as “wash coppers and boilers; dustbins, buckets…watering cans; ash-trays;…baskets for laundry, fruit vegetables, etc.; letter-boxes…luncheon boxes.” Explanatory Note 73.23(A)(1).
It is the conclusion of the Customs Service, subsequent to a review of this list, that the containers subject to this protest are not analogous. Merchandise properly classified in heading 7323, HTSUSA, is limited in scope to table, kitchen or other household articles made of iron or steel. The containers under review in this protest may not reasonably be described as table, kitchen or household articles. See generally HQ 956218 (Aug. 23, 1994), NY C88472 (June 24, 1998), NY 813291 (Aug. 23, 1995) and NY 808180 (Mar. 24, 1995).
The containers subject to classification consideration in this protest may be used in the kitchen or around the home, but they are not designed nor specifically intended for kitchen or household use. Customs also concludes that they are not table articles.
It is Customs determination that the heading that is most descriptive of the lunch box style container, the round container and the dog bone style container is heading 7326, HTSUSA. Heading 7326, HTSUSA, provides very simply for “Other articles of iron or steel.” Heading 7326, HTSUSA, as previously stated is a residual provision and encompasses the classification of “all articles of iron or steel…other than articles included in the preceding headings of this Chapter or …more specifically covered elsewhere in the Nomenclature.” Explanatory Note 73.26.
Understanding that heading 7326, HTSUSA, is a residual or basket provision into which all merchandise properly classified in Chapter 73, HTSUSA, falls by default when a more descriptive heading in the chapter does not exist, the variety of iron or steel merchandise that is properly classified in heading 7326, HTSUSA, is broad. This is confirmed by a further reading of the Explanatory Notes. The Explanatory Note that correspond to heading 7326, HTSUSA, Explanatory Note 73.26, offers an extensive listing of merchandise that is classified in heading 7326, HTSUSA.
Explanatory Note 73.26 (3) provides that heading 7326, HTSUSA, covers “Certain boxes and cases, e.g., tool boxes or cases, not specially shaped or internally fitted to contain particular tools with or without their accessories (see the Explanatory Note to heading 42.02); botanists’, etc., collection or specimen cases, trinket boxes; cosmetic or powder boxes and cases; cigarette cases, tobacco boxes, cachou boxes, etc. but not including containers of heading 73.10, household containers (heading 73.23), nor ornaments (heading 83.06). (Emphasis added). The containers subject to this protest are not easily analogous to the “boxes and cases” specifically identified in the EN, but this is not necessary. The drafters of the EN’s, by employing the phrases “e.g.” and “etc.” in EN 73.26, exhibited an intent that the identified articles were only intended to be representative or illustrative.
It is the conclusion of the Customs Service that the containers in issue and the articles identified by example in EN 73.26 share enough common features to warrant the classification of the containers in heading 7326, HTSUSA. The containers in issue are essentially steel boxes, the sizes of which according to a reading of EN 73.26 may vary significantly. The containers are larger than trinket and cachou boxes, smaller than tool boxes, but are about the size of powder or tobacco boxes. They are not specially shaped nor are they internally fitted. The possible uses of the containers are similar to the anticipated uses of the containers referenced in the EN. They may carry a variety of items, none of which fall into any particular category that might preclude classification of the containers in heading 7326, HTSUSA. As should be appreciated, there is no single example provided for in EN 73.26 to which Customs may point as the perfect example of a container similar to those subject to this protest. Customs has, however, demonstrated that there are a significant number of common characteristics between the containers in issue and the “boxes and cases” illustrated in Explanatory Note 73.26 to warrant classification in heading 7326, HTSUSA.
Although Customs has discussed the similarities between the relevant merchandise and the items identified in the Explanatory Notes to heading 7326, HTSUSA, it is important to remember that since heading 7326, HTSUSA, is a basket or residual provision it is only necessary to determine that American Specialty Confections’ merchandise is not excluded from heading 7326, HTSUSA, nor specifically provided for elsewhere in the tariff schedule. Customs concludes that the merchandise is not precluded from classification in heading 7326, HTSUSA, nor is it specifically provided for in another tariff schedule heading.
Continuing the classification of the traditional school lunch box shaped containers, the round containers with flat bottoms and the dog bone shaped containers at the subheading level, the containers are classified in subheading 7326.90.1000, HTSUSA. See generally NY H81764 (June 19, 2001), NY F81395 (Jan. 13, 2000) and NY B80840 (Jan. 10, 1997). Subheading 7326.90.1000, HTSUSA, provides for the classification of
7326 Other articles of iron or steel:
Other:
Of tinplate.
The Customs Service specifically notes for the attention of the importer and the Customs broker that Customs has not undertaken a laboratory analysis to confirm that the containers in issue are tinplated. Customs has relied on the express statements of the Customs broker in the Protest and the express statements of counsel for the importer in the submission dated August 29, 2000. Should the containers not prove to be tinplated, this would significantly impact the classification and rate of duty of this merchandise and, additionally, bear negatively on the importer’s obligation to use reasonable care in the classification, value and entry of its merchandise.
Although not raised as an issue in this protest, substantially similar merchandise is frequently imported with edibles. Headquarters Ruling Letter 963670 addressed the classification of the containers and the edibles when imported together. Supra.
It is noted that Customs liquidated the entries in subheading 4202.19.0000, HTSUSA. Heading 4202, HTSUSA, provides for the classification of:
Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly of mainly covered with such materials or with paper.
Customs, during the course of this administrative review, determined that the merchandise in issue was not similar to the items designated by name in the first part of heading 4202, HTSUSA, that aspect which precedes the semi-colon. It was also determined that consideration of the items listed in the second part of the heading was unnecessary because those articles must be made of specific materials and iron and steel, of which the containers are composed, are not enumerated materials. Since Customs determined that the metal containers being imported by American Specialty Confections were not similar to the containers designated eo nomine in heading 4202, HTSUSA, Customs re-examined the headings of the HTSUSA and has concluded that American Specialty Confections’ merchandise is properly classified in heading 7326, HTSUSA.
The Customs Service is aware of HQ 964234 (April 23, 2001), HQ 961707 (Mar. 19, 1999) and PD C85024 (Mar. 31, 1998) classifying similar metal containers in Chapter 42, HTSUSA. Customs is re-examining the classification of this merchandise and considering whether this merchandise should be classified in heading 7326, HTSUSA, of Chapter 73. If a decision is made to re-classify the merchandise addressed in the identified ruling letters, the Customs Service will proceed in accordance with 19 U.S.C. 1625 (c).
HOLDING
The Protest is ALLOWED.
The traditional school lunch box shaped containers, the round containers with flat bottoms and the dog bone shaped containers are classified in subheading 7326.90.1000, Harmonized Tariff Schedule of the United States Annotated.
The General Column 1 Rate of Duty is FREE.
In accordance with Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, section 3 A. (11) (b), you are to mail this decision and the Protest (Customs Form 19) to the Protesant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with this decision must be accomplished prior to mailing the decision.
The Office of Regulations & Rulings will make this decision available to Customs personnel and to the public on the Customs Service Home Page on the World Wide Web, www.customs.gov, by means of the Freedom of Information Act
and by other methods of public distribution sixty days from the date of this decision.
Sincerely,
John Durant, Director
Commercial Rulings Division