CLA-2 RR:CR:GC 967008 NSH
Port Director
101 East Main Street
Norfolk, VA 23510
RE: Protest 1401-03-100172; Christmas light sets
Dear Port Director:
This is our decision on Protest 1401-03-100172, filed on behalf of Ace Hardware Corporation, against your classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of Christmas light sets. The entries under protest were liquidated on May 2, 2003, under subheading 9405.30.00, HTSUS, and this protest was timely filed on July 29, 2003.
FACTS:
The merchandise at issue consists of four similar varieties of electric light sets. Each set consists of a wire harness incorporating 100 equally spaced sockets for miniature bulbs. The light sets are all UL-rated for both indoor and outdoor use on account of the strings being made with waterproof sockets.
Style No. 9826009 is approximately 32 feet in length and consists of 100 clear miniature light bulbs.
Style No. 9827007 is approximately 32 feet in length and consists of 100 multicolored miniature light bulbs.
Style No. 9830035 is approximately 46 feet in length and consists of 100 clear miniature light bulbs.
Model No. 9830027 is approximately 46 feet in length and consists of 100 multicolored miniature light bulbs.
Protestant claims classification of these light sets under subheading 9405.40.80, HTSUS, which provides for “Other electric lamps and lighting fittings: Other.”
ISSUE:
Whether the subject electric string lights are classified as lighting sets of a kind used for Christmas trees under subheading 9405.30.00, HTSUS, or as other electric lamps and lighting fittings under heading 9405.40.80, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the remaining GRIs.
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. The ENs, although neither dispositive or legally binding, facilitate classification by providing a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-90.
The HTSUS provisions under consideration are as follows:
Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:
Lighting sets of a kind used for Christmas trees
* * * * * *
Other electric lamps and lighting fittings:
9405.40.80 Other
We note initially that festive, carnival or other entertainment articles, are provided for under heading 9505, HTSUS. However, chapter 95, Note 1(t), HTSUS, specifically excludes “electric garlands of all kinds” and directs that they be classified under heading 9405, HTSUS.
In examining the competing subheadings within heading 9405, HTSUS, we note that subheading 9405.30.00, HTSUS, is a “principal use” provision within the meaning ascribed in Primal Lite v. United States, 15 F. Supp. 2d 915 (CIT 1998); aff’d 182 F. 3d 1362 (CAFC 1999). In Primal Lite, the court concluded that because subheading 9405.30.00, HTSUS, is a principal use provision, it is therefore subject to Additional U.S. Rule of Interpretation 1(a), HTSUS, which states as follows:
a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use;
Additionally, the Primal Lite court, in discussing principal use, held that “it is the use of the class or kind of goods being imported that is controlling, rather than the specific use to which the importation itself is put,” i.e. goods need not be actually used in the same manner as the entire class or kind in order to recognized as part of that class or kind. CBP has repeatedly upheld this analysis by defining principal use as the use of the class or kind of the merchandise at issue that exceeds any other use. See HQ 964954, dated, April 18, 2002, HQ 963264, dated May 4, 2001, HQ 963032, dated July 24, 2000 and HQ 083885, dated July 18, 1989. Therefore, to classify the subject merchandise, it is necessary to determine whether it belongs to the class or kind of goods that are recognized as being principally used for the decoration of Christmas trees or for other purposes not necessarily relating to Christmas trees.
The issue of class or kind was discussed 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). In Carborundum, the court, in determining whether an iron-silicon alloy was in fact used for the manufacture of ferrous metals, noted that “[t]he importer must establish that the imported merchandise belongs to a class or kind of merchandise which is commonly used as raw materials in the manufacture of ferrous metals.” [Emphasis added]. Consequently, even if the merchandise was not found to be used specifically for the manufacture of ferrous metals, it could still be considered a part of that class or kind of merchandise if it satisfied certain criteria.
To establish class or kind, the Carborundum court articulated, and CBP has repeatedly applied, a variety of factors, including: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchaser; (3) the channels of trade in which the merchandise moves; (4) the environment of sale (accompanying accessories, manner of advertisement and display); and (5) the usage of the merchandise. Although application of these factors is often essential to determine class or kind, it is additionally significant to note that not every factor can or should be applied in each instance and that applicability is dependent upon the particular merchandise at issue, as well as the available information.
There is no argument that the lights at issue are intended for use during the Christmas holiday season. The physical characteristics of these lights make it apparent that they have been designed for this purpose. Each of the four styles consists of an electric garland that measures either thirty-two feet or forty-six feet in length and contains one-hundred clear or multicolored miniature light bulbs that can be set either to glow steadily or else flash. The packaging for these lights identifies them as “Christmas lights” for both indoor and outdoor use and pictures dozens of miniature evergreen trees.
The Protestant states that the light sets at issue are specifically designed for either indoor or outdoor use as evidenced by the fact that the strings are made with waterproof sockets, and that they are not intended solely for indoor use on Christmas trees. Because of this dual indoor and outdoor use, as well as the statements regarding the potential for varied indoor use, it is asserted they are not limited to decorating only Christmas trees. As a result, they could be used, for example, to decorate a range of indoor and outdoor objects, including windows, mantels, patios, roofs, banisters, shrubs and archways during the Christmas season. To support this contention the Protestant notes several rulings wherein CBP classified lighting sets capable of both indoor and outdoor use under subheading 9405.40.80, HTSUS. See NY I87552, dated November 14, 2002, NY I86005, dated September 20, 2002, NY I83134, dated July 10, 2002 and NY I83484, dated August 5, 2002.
Regarding this dual indoor and outdoor use, CBP does not believe that this factor by itself is determinative for finding the lights at issue are part of a class or kind of light that is principally used for decorative purposes other than Christmas trees. CBP also does not believe that this factor was determinative in the rulings cited by the Protestant for the classification of the merchandise therein under subheading 9405.40.80, HTSUS. Although the lights at issue can be used outdoors, we note that not only can these lights be used to decorate outdoor Christmas trees, but that waterproof sockets can be of benefit to indoor Christmas trees, especially those which are placed in water, or else to protect against potential electrical accidents. CBP has repeatedly classified electric string lights capable of both indoor and outdoor use under subheading 9405.30.00, HTSUS, when it was determined that they were of the class or kind of merchandise that was principally used for decorating Christmas trees. See HQ 966882, dated March 10, 2004, NY I83154, dated July 17, 2002, NY I83156, dated July 17, 2002, NY J89048, dated November 7, 2003, NY I83157, dated July 10, 2002, NY I82127, dated July 1, 2002 and NY I82362, dated July 1, 2002.
In contrast, light sets classified under subheading 9405.40.80, HTSUS, because of certain physical characteristics, are recognized as not being of the class or kind of merchandise that is principally used for decorating Christmas trees. See NY J84195, dated June 19, 2003 (poinsettia light sets), NY I83486, dated August 5, 2002 (net light sets), NY I81176, dated May 20, 2002 (lighting set item 70305-100 consisting of electric lights in the shape of icicles) and HQ 962901, dated September 28, 2001 (electric garland with plastic covered light covers in the form of dreidels, a recognized symbol of Chanukah),
Finally, because of the aforementioned packaging of the merchandise and the likelihood that it will be sold in the Christmas section of stores during the holiday season, CBP believes that the expectation of the ultimate purchaser is that these lights are intended for use on Christmas trees. Although CBP concedes consumers may also purchase these lights with the intent to use them on objects other than Christmas trees, CBP believes that the principal use of light sets of this type is for Christmas trees and notes that substantially similar merchandise has repeatedly been classified under subheading 9405.30.00, HTSUS. See HQ 966882, dated March 10, 2004, NY J89048, dated November 7, 2003, NY J83867, dated May 7, 2003, NY I85459, dated September 12, 2002, NY I83664, dated July 17, 2002, NY I82126, dated July 1, 2002 and NY I83133, dated July 10, 2002.
In considering the foregoing, CBP believes that, despite the fact these lights may be designed in part for use both inside and outside a house, and for decorating objects other than Christmas trees, they are nevertheless representative in every respect of the class or kind of light that is recognized as being principally used for Christmas trees. As such, they are classified under subheading 9405.30.00, HTSUS, as “Lighting sets of a kind used for Christmas trees.”
It should be noted, however, that CBP recognizes the extensive and broadening use of these types of electric lights during the Christmas holiday season for purposes other than decorating a Christmas tree. Although in many instances there are factors that clearly differentiate between lights designed for use on Christmas trees and lights designed for use on, for example, mantles, banisters, window frames and the façade of houses, we equally noted instances when there is little or no discernable difference between these lighting sets, despite any intention by the manufacturer that they be designed or advertised for a different use. However, because the decoration of Christmas trees still constitutes the principal use for this type merchandise, and the HTSUS does not detail varying provisions to account for this expanded use, lighting sets not designed or used specifically for Christmas trees, if determined to be part of the class or kind of lighting set principally used for decoration of a Christmas tree, are still classified under subheading 9405.30.00, HTSUS.
HOLDING:
The electric string light sets are classified under subheading 9405.30.00, HTSUS, as “Lighting sets of a kind used for Christmas trees.” The 2003 column one rate of duty is 8.0 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
You are instructed to DENY the protest.
In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home
Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division