CLA-2 RR:CR:GC 963636 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 103751; Artificial Foliage
Dear Director:
This is a decision on Protest 1001 98 103751, 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 June 26, 1998, and the protest timely filed on September 4, 1998. Our decision follows:
FACTS:
The merchandise consists of assorted artificial fruit and foliage claimed to be Christmas holiday articles. Protest 1001 98 103751 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:
W2943-003, a small apple pick consisting of three artificial crabapple-sized apples painted bright red, attached to three green artificial leaves;
P3331-003,a "bubble berry" spray, about 13 inches in length, consisting of clusters of bright red berries about 1/8th inch in diameter;
P1214-077, a gold leaf (simulated) pear pick about 9½ inches in length, including the pick;
P1202-077, a pick of gold-colored berries about 12 inches in length on a gold stem;
W8043-077, a small (about 8½ inches in length) grape cluster with gold berries with one green leaf and a portion of grapevine foliage;
P3331-008, a "bubble berry" spray similar to #2, but with cranberry colored berries;
P 4409-077, a tea leaf spray about 11 inches in length with tiny gold leaves;
P1204-593, a red berry spray about 29 inches in length;
P3331-077, a "bubble berry" spray, similar to #2, about 26 inches in length, but with gold berries;
P333-025,a "bubble berry" spray, similar to #2, about 26 inches in length, but with plum colored berries;
P2061-077, a gold beech spray about 27 inches in length, consisting of a branch with broad beech-style leaves in gold color;
W7904-077, a 30 inch gold brushed twig;
P3299-077, a "poly-magnolia leaf spray", consisting of gold-colored magnolia leaves on a stem, measuring about 21 inches in length, including the pick;
W4979-003, a 7½ inch "grape cluster" of cherry-red berries with green grape leaves and vine parts;
P2092-077, a gold and gilded grape cluster, about 11 inches in length;
P4455-077, a 6 piece tray of gold mesh pears on a pick, measuring 9½ inches from the end of the pick to the tip of the stem;
P4442-077, a 6 piece tray of gold mesh grape clusters, measuring about 6 inches at the longest portion and consisting of gold mesh grapes and golden fabric leaves; and
Npegs004PE, a set boxed of gold mesh fruit with two of each style, i.e., grape clusters, apples, and pears, each with a golden string or loop for hanging on a Christmas tree or, in the case of the grape cluster, a twist of wire for the same purpose.
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 berries, red apples, pear picks and hanging fruits 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.
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, in their condition as imported, that is, as picks and parts of wreaths and flower arrangements, most do not appear to have a holiday association.
With respect to the third criterion, most 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 holiday catalogs indicating that articles are offered for sale in anticipation of the Christmas season and that catalogs for other seasons of the year do not contain the articles under consideration in this protest. We would not dispute that some of these articles will appear as components in goods made up for Christmas sale, that they are principally decorative, and that the completed articles are designed to be used in the celebration of a particular holiday. However, the disqualifying factor here is that these articles under consideration in this protest, with one exception mentioned infra, are not in and of themselves festive articles. Rather, they are used in floral bouquets and arrangements, swags, wreaths, table centerpieces, and the like, which when assembled may include distinctly holiday elements, qualifying the whole article for classification as a festive article. In examining the whole range of samples provided, which we assume correspond to the general descriptions in the commercial invoices and the Customs Form #19, only the gold mesh fruits with hanging strings or wires for attachment, identified as # 18, supra, would qualify as festive articles. Even though similar goods are identified as part of a centerpiece, for example, see item 10780, "Victorian Plum Centerpiece" shown on page 36-37 in the Holiday 1999 Catalog, they are also identified and marketed as ornaments for Christmas trees in item 10847 on the same page. Customs is willing to give the benefit of the doubt to apparently conflicting evidence and accept the claim that the gold mesh fruits are principally used as Christmas ornaments. With this exception, the rest of the articles also fail to meet several of the Carborundum standards:
As to physical characteristics, the general physical characteristics of the foliage or fruits do not dedicate them to use on a specific holiday. The fact that articles are gold colored does not provide any practical limitations to use in and around Christmas. Like red and green items, gold colored items are bought and sold for use year round. Other than the gold color, there is nothing about berries, apples 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 for the bulk of the merchandise in the instant case.
The expectation of the ultimate purchaser element is difficult to apply in this case, because the protestant is the ultimate purchaser and the protestant buys to goods that are the subject of this protest to combine with other articles to create decorative articles many of which are offered for sale during the Christmas holiday. There is nothing about these artificial fruits and foliage that precludes them from being used as a year round decoration. While the gold additions to the 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. In fact, the Victorian Plum Centerpiece that includes some of the gold mesh grapes clusters and pears that are the subject of this protest, described in the Holiday 1999 catalogue, supra, is coupled with the following text, "Adorn your table with a centerpiece you can enjoy long after the holidays are past." From this statement, it is obvious that some of the articles claimed to be festive are expected by the ultimate purchaser to be used in ways other than in celebration of a holiday.
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. This importer appears to sell to the public through catalogs, retail stores, and by telephone and internet mail order. Other catalogs indicate that the importer is engaged in a general higher quality gift and home decoration business which ranges from upholstered furniture to artificial flowers to textile home furnishings to ceramic giftware.
The environment of the sale is not a relevant consideration here, inasmuch as the sale by the importer is not the merchandise alone, but the merchandise manipulated and combined with other merchandise into a floral or foliage display as indicated supra. However, the association of Christmas goods with goods merely claimed to be festive will not convert the latter into 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 as merchandise that defines the class, because there is nothing that would hinder their being used 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. Customs does not see the individual imported articles as dedicated to use in the decoration or celebration of Christmas. Customs does acknowledge that when some of the imported goods are combined with Christmas-related goods and marketed and sold as decorative Christmas articles, the finished articles might qualify for classification as festive articles. However, the economic practicality element to be satisfied would indicate that the goods would lose their value following the holiday. The protestant's own catalog indicates that some of the centerpieces are not limited to Christmas but are suitable for use "long after the holidays are past."
As to recognition in the trade of this use [as a festive article], although the importer may claim that this particular item 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 most of the instant merchandise belongs.
Only item 18 listed supra qualifies for classification in subheading 9505.10.25, HTSUS. Because the rest of the artificial fruit 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, except to the extent that classification as indicated above results in a partial allowance.
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