CLA-2 OT:RR:CTF:TCM H031458 HvB
Mr. Juan Dominguez
Import and Customs Compliance
Wal-Mart Stores, Inc.
702 SW 8th St.
Bentonville, AR 72716-0410
RE: Revocation of HQ 964937, HQ 965021, HQ 950678, HQ 951092, HQ 951943, HQ 084074, NY D87008, NY I81218, NY N008721, NY E80250, NY E81728, NY J86419, and NY N080536; Classification of Roadside Emergency Kits
Dear Mr. Dominguez:
This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered Headquarter Ruling Letter (HQ) HQ 964937, issued to you on March 19, 2002, on the classification of the “99 Piece Emergency Roadside Kit”. In that ruling, CBP classified each item of the 99-piece kit separately under the Harmonized Tariff Schedule of the United States (HTSUS). For example, the hose clamps were classified in heading 7326, HTSUS, as an article of steel, while the gas siphon was classified in heading 3917, HTSUS, which provides for “Tubes, pipes and hoses and fittings therefor (for example, joints, elbows, flanges), of plastics.” The items were stored in soft-sided plastic reinforced zippered bag with straps.
In addition, this ruling letter concerns the following rulings in which CBP classified substantially similar merchandise: HQ 084074, dated July 3, 1989, HQ 965021, dated March 19, 2002, HQ 950678, dated December 30, 1991, HQ 951092, dated February 11, 1992, HQ 951943, dated June 26, 1992, New York Ruling Letter (NY) D87008, dated February 3, 1999, NY E80250, dated April 19, 1999, NY E81728, dated May 17, 1999, NY I81218, dated May 17, 2002, NY J86419, dated July 1, 2003, NY N008721, dated April 9, 2007, and NY N080536, dated November 13, 2009. In these rulings, like the merchandise at issue in HQ 964937, the items of each kit were packed in either a carrying case or bag meant to be stored in the trunk of an automobile. We have reviewed these rulings and found them to be in error. Therefore, this ruling revokes these rulings pursuant to 19 USC §1625(c)(1).
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice of the proposed action was published in the Customs Bulletin, Vol. 49, No. 37, on September 16, 2015. No comments were received in response to the notice.
FACTS:
The products at issue were described as follows in HQ 964937:
The “99 piece Emergency Roadside Kit” (Stock # SDA178) consists of a 10’ battery booster cable, accident information guide, emergency thermal blanket, radiator water bag, 2 light sticks, 2 hose clamps, gas siphon, vinyl glove, a paper flag that reads “Emergency Help Call Police,” red shop towel, multi-function knife, flashlight, 2 D-size batteries, poncho, roll of radiator repair tape, 6 blade fuses, 27 cable nylon ties, flammable tire sealer and first aid kit, all packed inside a soft-sided plastic, reinforced, zippered bag with straps. The bagged is monogrammed with the words “Emergency Roadside Kit” and the triangular yellow symbol for emergencies. The kit is intended to be stored in a vehicle.
ISSUE:
Whether the emergency roadside kits are classifiable as retail sets pursuant to GRI 3?
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs.
We note that we are presented with an assortment of items that are packaged and sold in a carrying case. The goods are potentially classifiable under more than one heading because they consist of separate components and no one heading in the tariff provides for the goods as entered. The kit consists of 99 items and includes a 10’ battery booster cable, accident information guide, emergency thermal blanket, radiator water bag, 2 light sticks, 2 hose clamps, gas siphon, vinyl glove, a paper flag that reads “Emergency Help Call Police,” and the remaining items of the set. Since no heading of the HTSUS completely describes the goods, and they are prima facie classifiable in two or more headings, the kits may not be classified solely on the basis of GRI 1. Thus, classification must fall to GRI 3.
GRI 3 provides, in pertinent part, as follows:
When, by application of rule 2(b) [not applicable in this case] or any other reason, goods are, prima facie, classifiable under two or more heading, classification shall be effected as follows:
The heading which provides the most specific description shall be preferred to headings providing a more general description […]
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.
…
The relevant ENs for GRI 3 provide:
(VIII) The factor which determines 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.
…
(X) For the purposes of this Rule, the term “goods put in sets for retail sale” shall be taken to mean goods which:
(a) consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and
(c) are put up in a manner suitable for sale directly to users without repackaging (e.g., in boxes or cases or on boards).
GRI 3(b) provides for the classification of goods put up in retail sets. Applying the definition of the phrase “goods put up as sets for retail sale” provided in EN (X) to GRI 3(b), the subject merchandise meets the first requirement because the product consists of two or more goods, which are prima facie classifiable in two or more headings of the HTSUS. In addition, the subject merchandise meets the second requirement because the items are put up together to assist the particular needs of motorists who experience a roadside emergency. The goods are put up in a manner suitable for sale because the goods are packaged in a carrying bag suitable for retail sale. Therefore, the subject 99 Piece Emergency Roadside Kit qualifies as a set for purposes of GRI 3(b).
CBP has addressed the particular need or specific activity requirement of EN(X)(b) to GRI 3 as requiring a relationship between the articles contained in a group, and such relationship must establish that the articles are clearly intended for use together for a single purpose or activity to comprise a set under GRI 3(b). See, e.g., Headquarters Ruling Letter (HQ) 953472, dated March 21, 1994. Consistent with CBP’s analysis of GRI 3(b), the United States Court of International Trade (CIT) agreed that “for goods put up together to meet the ‘particular need’ or ‘specific activity’ requirement and thereby be deemed a set, they must be so related as to be clearly intended for use together or in conjunction with one another for a single purpose or activity.” The bag facilitates the storage and transportation of the items and is directly related to the activity of managing roadside emergencies. See Estee Lauder, Inc. v. United States, 815 F. Supp. 2d 1287, 1295 (Ct. Int’l. Trade 2012); see also Dell Products LP v. United States, 714 F. Supp 2d. 1252 (Ct. Int’l Trade 2010) (Dell Products I) (stating that GRI 3(b) “only requires that the component satisfies a ‘particular’ need”), aff’d Dell Products LP v. United States, 642 F.3d 1055 (Fed. Cir. 2011) (Dell Products II). In Estee Lauder, the CIT considered the classification of cosmetic items put up together for the activity of applying makeup, and concluded that because each item by itself was specifically related to makeup and had an identifiable, individual use that was intended for use together or in conjunction with one another for the single activity of putting on makeup, the cosmetic items met a particular need and were therefore “retail sets” pursuant to GRI 3(b). Estee Lauder, 815 F. Supp. 2d at 1295-1296. See also HQ H190656, dated July 21, 2014, in which we classified certain medical supplies as retail sets.
The Explanatory Notes (ENs) to GRI 3(b) provide that, if this rule applies, goods shall be classified as if they consisted of the material or component which gives them their essential character. EN Rule 3(b)(VIII) lists as factors to help determine the essential character of such goods: the nature of the materials or components, their bulk, quantity, weight or value, and the role of a constituent material in relation to the use of the goods.
As stated by the CIT in Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (citations omitted) (Ct. Int’l Trade 2005), "the essential character of an article is that which is indispensable to the structure, core or condition of the article, i.e., what it is." See also Conair Corporation v. United States, 29 Ct. Int’l Trade, 888, 895 (citations omitted) (2005) (discussing "the concept of ‘essential character’ found in GRI 3(b)").
The emergency kits are being imported to provide motorists with the supplies necessary to address roadside emergencies. Each kit in the aforementioned rulings varies in its contents and thus, the essential character will vary according to each kit’s contents. Without such information, we therefore conclude that the emergency kits are classified as “retail sets” pursuant to GRI 3(b) in the heading that provides the kits with their essential character.
HOLDING:
By application of GRI 3(b), the emergency kits are classified in the heading for the item which provides the emergency kit its essential character. Accordingly, HQ 964937 is revoked.
Should you require further clarification on your specific merchandise, please contact NCSD for a ruling request. Requests for a binding ruling may be made electronically via CBP’s website, https://apps.cbp.gov/erulings/index.asp, or by writing to NCSD at the following address:
Director, National Commodity Specialist Division,
U.S. Customs and Border Protection Regulations and Rulings, Office of Trade
1100 Raymond Boulevard
Newark, New Jersey 07102 USA
EFFECT ON OTHER RULINGS:
HQ 084074, dated July 3, 1989, HQ 965021, dated March 19, 2002, HQ 950678, dated December 30, 1991, HQ 951092, dated February 11,1992, HQ 951943, dated June 26, 1992, NY D87008, dated February 3, 1999, NY E80250, dated April 19, 1999, NY E81728, dated May 17, 1999, NY I81218, dated May 17, 2002, NY J86419, dated July 1, 2003, NY N008721, dated April 9, 2007, and NY N080536, dated November 13, 2009, are hereby REVOKED in accordance with the above analysis.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial & Trade Facilitation Division