CLA-2 RR:CR:TE 963670 jsj
1704.10.0000
Ms. Cindy Hazlett, CHB
Assistant Manager, Customs
International Trade and Logistics
Applause, Inc.
6101 Variel Avenue
Woodland Hills, California 91367
Re: “Candy Carry All”; Metal Container; Subheading 7326.90.1000, HTSUSA; HQ 963539 (April 12, 2002) Incorporated by Reference; Chewing Gum; Subheading 1704.10.0000, HTSUSA.
Dear Ms. Hazlett:
The purpose of this correspondence is to respond to your request dated October 18, 1999, and received by the U.S. Customs Service, Customs Information Exchange on October 20, 1999. The correspondence in issue requested a binding classification ruling of the merchandise described as a “Candy Carry All” consisting of a metal container and chewing gum which will be packed in and imported with the container.
This ruling is being issued subsequent to the following: (1) A review of your submission dated October 18, 1999; (2) A review of the sample “Candy Carry All;” and (3) A review of the “composition certificate” of the chewing gum.
FACTS
The article in issue, identified as a “Candy Carry All,” is a metal container in the shape of a traditional school lunch box, but smaller. The container measures four and one-eight (4 1/8) inches in height, five and one-half (5 ½) inches in width and two and one-fourth (2 ¼) inches in depth. It has a plastic handle that is attached to the top of the container and swivels from side to side.
One of the sides of the container 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 container will be painted depicting a cartoon rabbit named “Lord Rabbitwell” and a goose named “Lady Goosedown.” The rabbit and goose will be dressed in formal attire. It is the understanding of the Customs Service that the exterior will be painted to indicate in writing that candy is enclosed.
The article is made of sheet steel, however, it is not constructed for long-term or rigorous use. The handle hinges and the metal clasp are not designed or constructed for significant wear.
A label on the container indicates that it is a product of China.
The container will be imported filled with chewing gum. The chewing gum is made of the following ingredients: sugar, gum base, corn syrup, dextrose, tapioca dextrin, corn starch, confectioners glaze, carnauba wax, as well as other ingredients to add color, flavor and maintain freshness. Customs is advised that the chewing gum is a product of Canada.
ISSUE
What is the classification, pursuant to the Harmonized Tariff Schedule of the United States Annotated, of the above-described “Candy Carry All” and chewing gum ?
LAW AND ANALYSIS
The Customs Service in Headquarters Ruling Letter 963539 (April 12, 2002) classified containers substantially similar to the “Candy Carry All” container in subheading 7326.90.1000, HTSUSA. Subheading 7326.90.1000, HTSUSA, provides for:
7326 Other articles of iron or steel:
Other:
Of tinplate.
The legal reasoning and analysis employed in HQ 963539 in classifying those containers is adopted by reference in the classification of the “Candy Carry All” container. Headquarters Ruling Letter 963539 is attached to and made a part of this ruling letter.
The chewing gum is classified pursuant to GRI 1 in subheading 1704.10.0000, HTSUSA. Subheading 1704.10.0000, HTSUSA, provides for:
Sugar confectionery (including white chocolate), not containing cocoa:
1704.10.0000 Chewing gum, whether or not sugar-coated.
The Customs Service elected not to provide extensive legal analysis on the classification of the chewing gum. The classification issue of concern for Customs in this ruling letter is the container. The classification of merchandise substantially similar to the chewing gum in this ruling letter may be found in: NY A85048 (July 3, 1996), NY A84164 (June 25, 1996) and NY 806794 (Feb. 15, 1995).
The Customs Service has been advised that the chewing gum is a product of Canada. Customs has not been provided any additional information nor undertaken any legal analysis to determine whether the chewing gum qualifies as a good “originating in the territory of a NAFTA party” pursuant to General Note 12 (b), HTSUSA.
The Customs Service, when called on to classify the “Candy Carry All” container and the chewing gum, contemplated whether the HTSUSA dictates that the container and the gum be classified together. Customs, in examining this question, considered whether the container and the gum were a “set” pursuant to GRI 3 or whether the principles of GRI 5 relating to packing containers entered with goods applied. It is Customs determination, as will be addressed in the succeeding paragraphs, that neither GRI 3 nor GRI 5 apply to the container and the gum in issue. The “Candy Carry All” container and the chewing gum should be classified separately.
An examination of GRI 3 becomes appropriate when goods are prima facie classifiable under two or more headings. The container is classified in heading 7326, HTSUSA, and the chewing gum is classified in heading 1704, HTSUSA. Continuing with the application of General Rule of Interpretation 3, GRI 3(a) provides that the articles should be classified according to the heading which affords the most specific description, unless the multiple headings under consideration refer to only part of the materials or substances contained in goods that are mixed or composite, or to only part of “items in a set put up for retail sale.” The container and the chewing gum are not mixed or composite goods, warranting inquiry into the issue of whether they cumulatively constitute “items in a set put up for retail sale.” General Rule of Interpretation 3.
The General Rules of Interpretation do not define the phrase “items in a set put up for retail sale.” The Explanatory Notes do, however, offer guidance. The precise phrase in GRI 3(a) “items in a set put up for retail sale” is not addressed in the EN’s. The EN’s do, however, address a similar phrase employed in GRI 3(b). The phrase employed in GRI 3(b) and discussed in the EN’s is “goods put up in sets for retail sale.” General Rules for the Interpretation of the Harmonized System, Rule 3 (b), Explanatory Note (X). It is the conclusion of the Customs Service that the two phrases address the same issue.
Explanatory Note (X) of GRI 3(b) provides three factors to be considered when determining whether goods have been put up in sets for retail sale. The factors are:
The goods consist of at least two different articles that are, prima
facie, classifiable in different headings;
The goods consist of articles put up together to “meet a particular
need or carry out a specific activity;” and
The goods are “put up in a manner suitable for sale directly to
users without repacking.” General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X) (a) – (c).
A review of the HTSUSA and an examination of the container and the gum establish that they are prima facie classifiable in different headings and are packaged in a manner suitable for sale directly to users. The issue that remains, the second of the three factors, is whether the articles as put up together “meet a particular need or carry out a specific activity.” General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(b).
The Explanatory Notes do not define the phrase “meet a particular need or carry out a specific activity.” Id. The EN’s do, however, offer examples of items put up together for sale directly to the user which constitute sets. The initial example consists of “a sandwich made of beef, with or without cheese, in a bun…,packaged with potato chips (French Fries).” General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(1)(a). The second example consists of items to be used together to prepare a spaghetti meal. The components include: (1) A packet of uncooked spaghetti; (2) A sachet of grated cheese, and (3) A small tin of tomato sauce, put up in a carton. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(b). The third example is a hairdressing set. The items in this set include: (1) A pair of electric hair clippers; (2) A comb; (3) A pair of scissors; (4) A brush; (5) A towel of textile material; and (6) a leather case to store and carry the items. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(2). The final example of a set is a drawing kit. The drawing kit includes five items put up together in a case of plastic sheeting. The items are: (1) A ruler; (2) A disc calculator; (3) A drawing compass; (4) A pencil; and (5) A pencil-sharpener, put up in a case of plastic sheeting. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(3).
A review of each of the examples of sets in EN (X) indicates that components of sets share at lease one common trait. See HQ 953472 (Mar. 21, 1994). The fact that the drafters of EN (X) did not explain when goods put up together “meet a particular need or carry out a specific purpose” suggests that resolution of the issue must be determined by analogy on a case-by-case basis.
The items that comprise each example of a set in EN (X) are related to one another in such a fashion that they interact together to serve a distinct purpose or function to enable a singular result to be achieved. The items in examples one and two are used in conjunction with one another to complete a sandwich meal and prepare a spaghetti meal. The articles in example three are used together for the purpose of hair grooming and the items in example four function with one another to enable the user to draw.
The Explanatory Notes, in addition to offering examples of items that constitute sets, also provides examples of collections of articles which do not function with one another to the degree necessary to establish a set. The initial accumulation of items in EN (X) consists of a can of shrimp, a can of pate de foie, a can of cheese, a can of sliced bacon and a can of cocktail sausages. See General Rules for the Interpretation of the Harmonized System, Rule 3(b), Explanatory Note (X)(1). The second example includes a bottle of spirits and a bottle of wine. See id. The items in the first example, although related to one another and usable together, do not “interact with one another so as to comprise a single dish.” HQ 953472 supra. It was concluded in HQ 953472 that the wine and spirits example did not constitute a set because they would not be used together for the mixing of a single drink nor suitable for serving together on a particular occasion. See HQ 953472 Id.
The issue in the instant ruling is whether the container has a nexus with the chewing gum such that both are intended to be used together or in conjunction with one another to meet a particular need or carry out a specific activity. It is the conclusion of the Customs Service that the metal container and the chewing gum will not be used together or in conjunction with one another to meet a particular need or carry out a specific activity. The container provides a means of packing and transporting the gum, but will not be used when the gum is being enjoyed. The container and the chewing gum do not meet a particular need or carry out a specific activity and are not a “set” pursuant to General Rule of Interpretation 3(b). See Generally HQ 088134 (Sept. 22, 1989), HQ 959305 (Sept. 20, 1996).
General Rule of Interpretation 5(a) addresses the classification of specifically shaped or fitted containers entered with their contents when the containers are suitable for long-term use and are of a kind of container normally sold with the merchandise contained therein. See Generally HQ 957577 (May 31, 1995), HQ 081862 (Feb. 21, 1990). General Rule of Interpretation 5(b) concerns the classification of packing materials and packing containers that are entered with the goods they are transporting and are of a kind normally used for the packing of the merchandise. See Generally HQ 956347 (Aug. 30, 1994).
It is the determination of the Custom Service that neither GRI 5(a) or GRI 5(b) are applicable. The container subject to this ruling is not specifically shaped or fitted to carry the gum, is not suitable for long-term use and is not the kind of container normally used in the sale of gum as required for classification pursuant to GRI 5(a). See generally HQ 958523 (December 6, 1995), HQ 958236 (Nov. 28, 1995), HQ 954879 (Oct. 29, 1993) and HQ 084257 (July 18, 1989). Although the container in this instance is premium packing and is used to pack the chewing gum for sale, the “Candy Carry All” container is not the kind of packing normally used to sell chewing gum precluding the classification of the container and the gum pursuant to GRI 5(b). See Generally HQ 957960 (Feb. 5, 1996) and HQ 081862 Supra.
The Customs Service is aware of HQ 964234 (April 23, 2001), HQ 961707 (Mar. 19, 1999) and PD C85024 (Mar. 31, 1998) classifying similar, but larger 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 “Candy Carry All” container is classified in subheading 7326.90.1000, Harmonized Tariff Schedule of the United States Annotated.
The General Column 1 Rate of Duty is FREE.
The legal reasoning and analysis of Headquarters Ruling Letter 963539 (April 12, 2002) is adopted by reference. Headquarters Ruling Letter 963539 is attached to and made a part of this ruling letter.
The chewing gum is classified in subheading 1704.10.0000, Harmonized Tariff Schedule of the United States Annotated.
The General Column 1 Rate of Duty is four (4) percent, ad valorum.
Sincerely,
John Durant, Director
Commercial Rulings Division