CLA-2 OT:RR:CTF:TCM H023622 ASM
Ms. Antoinette McKnight
Import Manager
American Shipping Company Inc. 250 Moonachie Rd., 5th Floor
Moonachie, NJ 07074
RE: Request for Reconsideration of NY N021655; Tariff Classification of “Nail Art Diva”™ Kit
Dear Ms. McKnight:
This is in response to your letter, dated February 19, 2008, requesting the reconsideration of New York Ruling Letter (NY) N021655, dated January 18, 2008, which classified the “Nail Art Diva”™ kit under the Harmonized Tariff Schedule of the United States (HTSUS). A sample has been submitted to this office for examination.
FACTS:
The subject merchandise is identified as the “Nail Art Diva”™ kit. The kit consists of a manually operated plastic device which has been specially designed for imparting designs to the fingernails by way of a stainless steel template. The kit contains five stainless steel templates in which 29 intricate designs have been etched into each of the five plates. Six bottles of nail polish in assorted colors and one bottle of clear top coat have also been included. In order to transfer the design to each nail, the user must insert a metal plate into the special compartment of the manually operated plastic device (hereinafter, “plastic applicator”), select a single design from the metal template, brush nail polish over the selected design, and manually move the plastic applicator so that it transfers the design directly to each nail. An instruction booklet, an instructional DVD, and a round plastic holder to contain the nail polish bottles are included with the kit. The instruction booklet provides information on how to transfer a design to the fingernails and how to clean the plastic applicator and templates. The items in the “Nail Art Diva”™ kit are packaged together in a cardboard display box ready for retail sale.
ISSUE:
What is the proper classification for the merchandise?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) 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 heading and legal notes do not otherwise require, the remaining GRI may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide 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. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
3304 Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or sun tan preparations; manicure or pedicure preparations:
* * *
3924 Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics:
* * *
7326 Other articles of iron or steel:
The plastic applicator and round plastic nail polish holder may be classified in heading 3924, HTSUS, which provides for “Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics”. The nail polish and top coat would be classifiable in heading 3304, HTSUS, which provides for “Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or sun tan preparations; manicure or pedicure preparations”. The steel templates are properly classified in subheading 7326, HTSUSA, which provides for “Other articles of iron or steel”.
This case is governed by GRI 3, which states, in pertinent part, as follows:
When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable in two or more headings, classification shall be effected as follows:
The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
* * *
In this case, each of the headings refers to only the individual items contained in the set. Pursuant to GRI 3(a), we must consider the headings equally specific in relation to the goods. Further, each of the components has been packaged together in a box for retail sale directly to the consumer and qualifies as a “set”. Accordingly, the goods are classifiable as a “set” pursuant to GRI 3(b) as if they consisted of the material or component that gives them their essential character. The EN to GRI 3(b) states:
In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
The factor which determines the essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
(Emphasis in original).
The “Nail Art Diva Kit”™ satisfies the aforementioned criteria for a retail set. The kit consists of components which are prima facie classifiable under different HTSUS headings. Moreover, all of the articles serve to meet the specific activity of imparting color and detailed design to the nails. The subject kit is retailed packaged for sale directly to the ultimate consumers without repackaging. Therefore, under GRI 3(b), the kit is a retail set and shall be classified according to the component which gives the kit its essential character. See Estee Lauder, Inc. v. United States, 46 Cust. B. & Dec. 4, 13-28 (Ct. Int’l Trade 2012). EN (VIII) to GRI 3(b) states that “essential character will vary as between different kinds of goods . . . it may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of these goods”.
There have been several court decisions on "essential character" for purposes of classification under GRI 3(b). See Conair Corp. v. United States, 29 C.I.T. 888 (2005); Structural Industries v. United States, 360 F. Supp. 2d 1330, 1337-1338 (Ct. Int’l Trade 2005); and Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278, 1295-1356 (Ct. Int’l Trade 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007). "[E]ssential character is that which is indispensable to the structure, core or condition of the article, i.e., what it is." Home Depot USA, Inc. v. United States, 427 F. Supp. 2d at 1293 quoting A.N. Deringer, Inc. v. United States, 66 Cust. Ct. 378, 383 (1971). In particular in Home Depot USA, Inc. v. United States, the court stated "[a]n essential character inquiry requires a fact intensive analysis." 427 F. Supp. 2d 1278, 1284 (Ct. Int’l Trade 2006).
We have carefully reviewed each component in the “Nail Art Diva”™ kit and it is our determination that no single component imparts the essential character. The components are similar with respect to their individual cost, bulk, and weight. Although the six bottles of nail polish and five etched metal plates are the costliest components, the similarity of their role with respect to the use of the goods overrides the slight cost differential between the components. Moreover, each component is equally necessary to achieve the intended purpose of the kit, i.e., the application of nail polish and detailed designs to enhance the fingernails. Since the components are designed to work together, there is not one single component that would be indispensable to the structure, core or condition of the article as a nail kit. When goods cannot be classified by reference to GRI 3 (a) or 3 (b), they are to be classified in the heading which occurs last in numerical order among those which equally merit consideration in determining their classification. For purposes of a GRI 3(c) analysis, we consider the plastic applicator, templates, and the polish to be components that equally merit consideration. However, we do not consider the instructional booklet or instructional DVD to be components that equally merit consideration.
In view of the foregoing, CBP finds that the subject kit was properly classified as a “set” pursuant to GRI 3(c) as “Other articles of iron or steel” in heading 7326, HTSUS, which is the heading that occurs last in numerical order.
HOLDING:
Under the 2008 HTSUSA, the subject “Nail Art Diva”™ kit is properly classified in subheading 7326.90.8587, HTSUSA, which provides for “Other articles of iron or steel: Forged or stamped, but not further worked: Other: Other: Other, Other”. The 2008 column one, general rate of duty for the subject article was 4.1 percent ad valorem.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements. Duty rates 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.
EFFECT ON OTHER RULINGS: NY N021655, dated January 18, 2008, is hereby affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division