CLA-2 OT:RR:CTF:TCM H236028 EGJ
Dennis A. Morse
BDP International
2929 Walker NW
Grand Rapids, MI 49544
RE: Revocation of HQ W968020, HQ H050118, NY N091640, NY R03958 and NY L88572: Classification of Aquadoodle Products
Dear Mr. Morse:
This is in reference to Headquarters Ruling Letter (HQ) W968020, dated May 31, 2006, issued to you concerning the tariff classification of the Aquadoodle Draw and Doodle Mat, Item number 70678. In HQ W968020, U.S. Customs and Border Protection (CBP) classified the subject merchandise in heading 6307, HTSUS, which provides for “Other made up articles, including dress patterns …” We have reviewed HQ W968020 and find it to be in error. For the reasons set forth below, we hereby revoke HQ W968020 and four other rulings with substantially similar Aquadoodle products: HQ H050118, dated July 13, 2010, New York Ruling Letter (NY) N091640, dated January 26, 2010, NY R03958, dated June 15, 2006, and NY L88572, dated November 15, 2005.
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 revocation was published on July 3, 2013, in the Customs Bulletin, Volume 47, No. 28. CBP received no comments in response to this notice.
FACTS:
The subject merchandise is the Aquadoodle Draw and Doodle Mat. It is a textile fabric mat packaged with two pens that are intended to be filled with water. The mat is intended for use by children. The mat measures 32 inches by 32 inches with a four inch red border. The center of the mat consists of a surface washable material incorporating a hydrochromatic ink. When the water-filled pens touch the mat, the water causes the mat to change color so that a child can write or draw on the mat. When the water dries, the marks on the mat disappear and the child can draw on a clean mat again.
All Aquadoodle products include either a mat or a different material with hydrochromatic ink. They are all sold with at least one plastic water pen. Aquadoodle products are sold in toy stores or in the toy department of stores. Aquadoodle products have also won many toy industry awards.
ISSUE:
Is the Aquadoodle Draw and Doodle Mat classified as a toy of heading 9503, HTSUS, or as a made-up textile article of heading 6307, HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 GRIs 2 through 6 may then be applied in order.
The HTSUS headings under consideration are the following:
6307 Other made up articles, including dress patterns …
* * *
9503 Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof…
* * *
Note 1(t) to Section XI, which includes Chapter 63, states that:
1. This section does not cover:
(t) Articles of chapter 95 (for example, furniture, bedding, lamps and lighting fittings) …
* * *
Note 3 to Chapter 95 states that:
3. Subject to note 1 above, parts and accessories which are suitable for use solely or principally with articles of this chapter are to be classified with those articles …
* * *
Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that:
1. In the absence of special language or context which otherwise requires:
(a) 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.
* * *
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff 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 at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 95.03(D) states, in pertinent part:
Other toys.
This group covers toys intended essentially for the amusement of persons (children or adults)….
* * *
Note 1(t) to Section XI excludes articles of Chapter 95 from classification in Section XI. Section XI includes Chapter 63. If the Aquadoodle Mat is classifiable in Chapter 95, it cannot be classified in Chapter 63. Furthermore, under Note 3 to Chapter 95, if the water pens are parts or accessories of the Aquadoodle Mat, the entire good is classified as a toy of heading 9503, HTSUS. As such, we will first determine whether the mat can be classified in heading 9503, HTSUS, as a toy.
Heading 9503 provides, in pertinent part, for “other toys.” In Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (Ct. Int’l Trade 2000) (Minnetonka), the U.S. Court of International Trade (CIT) determined that a toy must be designed and used principally for amusement and should not serve a utilitarian purpose. Thus, the CIT concluded that heading 9503, HTSUS, is a “principal use” provision within the meaning of Additional U.S. Rule of Interpretation 1(a) (AUSR 1(a)), HTSUS. Id.
Applying AUSR 1(a), the Aquadoodle Mat must belong to the same class or kind of goods which have amusement as a principal use, i.e. toys. In United States v. Carborundum Co., 536 F.2d 373, 377 (1976), the U.S. Court of Customs and Patent Appeals stated that in order to determine whether an article is included in a particular class or kind of merchandise, the court must consider a variety of factors, including: (1) the general physical characteristics of the merchandise; (2) the channels, class or kind of trade in which the merchandise moves (where the merchandise is sold); (3) the expectation of the ultimate purchasers; (4) the environment of the sale (i.e., accompanying accessories and marketing); (5) usage, if any, in the same manner as merchandise which defines the class; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use. Id. While these factors were developed under the Tariff Schedule of the United States (predecessor to the HTSUS), the courts have also applied them under the HTSUS. See, e.g. Minnetonka, 110 F. Supp. 2d 1020, 1027; see also Aromont USA, Inc. v. United States, 671 F.3d 1310 (Fed. Cir. 2012), Essex Manufacturing, Inc. v. United States, 30 C.I.T. 1 (2006). Accordingly, CBP has applied these factors to determine the class or kind of goods for principal use provisions under the HTSUS. See, e.g., HQ H220856, dated January 30, 2013, HQ H155796, dated August 15, 2012, and HQ 082780, dated December 18, 1989.
First, we will examine the physical characteristics of the merchandise. We note that the Aquadoodle Mat is a drawing surface that produces disappearing drawings. Next, we note the environment of sale includes the product’s packaging. The Aquadoodle Mat’s packaging explains that any doodles or drawings made with the water pens will evaporate as the water dries. As such, the consumer’s expectations are that doodles or drawings on the mat are temporary. The Aquadoodle Mat does not create lasting drawings, nor does it teach the consumer how to draw. The consumer will most likely purchase the Aquadoodle Mat for its amusement value because it creates disappearing drawings.
CBP has issued rulings on products similar to the Aquadoodle Mat. In HQ 956778, dated September 29, 1994, CBP classified the “Magic Drawing Board” under heading 9503, HTSUS, as a toy. The Magic Drawing Board consisted of a plastic drawing board with a luminous surface, and a specially-shaped, plastic stylus. The stylus left an impression when it was pressed and moved upon the surface of the board. When the luminous surface flap was lifted, any writing or drawing would disappear, rendering the surface clear for repeat usage. In NY N056979, dated April 27, 2009, CBP classified the “Glow Station on the Go” as a toy under heading 9503, HTSUS. It consisted of a Glow Station tablet, light wand, stencil sheet, six stencil tracer shapes and a texture sheet. In a darkened room, children could create luminous freehand drawings or else use the stencils by pressing the battery-operated light wand on the surface of the Glow Station tablet. The drawings would eventually disappear from the tablet to allow repetitive use of the item. See also NY N177438, dated August 12, 2011, NY N108366, dated June 18, 2010, NY L89724, dated January 17, 2006, and NY A86068, dated August 20, 1996.
Additionally, Aquadoodle products are sold by toy stores and in the toy department of stores. They have won several toy industry awards, which indicates that the toy industry recognizes Aquadoodle products as toys. After applying the Carborundum factors, we find that the Aquadoodle Mat is in the same class or kind of goods as other toys. 536 F.2d at 377. As such, the Aquadoodle Mat is classified as a toy under heading 9503, HTSUS.
Next, we must determine the tariff classification of the two water pens. Note 3 to Chapter 95 states that parts and accessories which are suitable for use solely or principally with a toy of heading 9503, HTSUS, are to be classified together with the toy. Therefore, we will first look to whether the water pens are “parts” of the Aquadoodle Mat.
The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Techs. Ltd. P’ship. v. United States (Bauerhin), 110 F. 3d 774 (Fed. Cir. 1997). The first, articulated in United States v. Willoughby Camera Stores, Inc. (Willoughby), 21 C.C.P.A. 322, 324 (1933), requires a determination of whether the imported item is an “integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article.” Bauerhin, 110 F.3d at 778 (quoting Willoughby, 21 C.C.P.A. 322 at 324). The second, set forth in United States v. Pompeo (Pompeo), 43 C.C.P.A. 9, 14 (1955), states that an “imported item dedicated solely for use with another article is a ‘part’ of that article within the meaning of the HTSUS.” Id. at 779 (citing Pompeo, 43 C.C.P.A. 9 at 13). Under either line of cases, an imported item is not a part if it is “a separate and distinct commercial entity.” Bauherin, 110 F. 3d at 779.
More recently, the Court of International Trade applied the Willoughby and Pompeo tests when it addressed the issue of whether two vase-shaped glass structures were classifiable as glassware in heading 7013, HTSUS, or as parts of lamps in heading 9405, HTSUS. Pomeroy Collection, Ltd., v. United States, 783 F. Supp. 2d 1257, No. 11-78 (Ct. Int’l Trade 2011). In applying Willoughby to the first article, the court ruled that “[w]hen imported, the claimed article is dedicated solely for use in such article, and, when applied to that use, the claimed part meets the Willoughby test.” Ibid, at 1261-1262. In Pomeroy, the court found that first article satisfied the Willoughby test because the hurricane lamp “clearly could not function without the first article in question” since the lamp relied upon the glass structure to hang upon. Id. at 1262. The court found that the second glass structure satisfied Pompeo because the evidence showed that the glass structure contained the flame and enabled the candles to remain lit and to prevent open flames. Thus, the court also found that the second article at issue also satisfied the Willoughby precedent because “when applied to that use” the lamp could not function without the glass structures. Id. In other words, to satisfy the Pompeo test, two prongs must be satisfied: (1) the article must be solely dedicated for use with the product it claimed to be a part of and, (2) when applied to that use, the article cannot function without the article at issue.
The Aquadoodle Mat is marketed as a doodling toy. The purpose of the Aquadoodle Mat is amusement, which is achieved by drawing pictures with the water pens and watching the pictures vanish as the water evaporates. Like the stylus for the Magic Drawing Board and the glow wand for the Glow Tablet, the water pens have no use other than drawing on the Aquadoodle Mat. Moreover, the Aquadoodle Mat cannot function without the water pens; the water pens are the only instruments which can create vanishing drawings. As such, the water pens are parts dedicated solely for use with the Aquadoodle Mat. Under Note 3 to Chapter 95, the water pens are classified under heading 9503, HTSUS, together with the Aquadoodle Mat.
As the Aquadoodle Mat and water pens are classified under heading 9503, HTSUS, as toys, Note 1(t) to Section XI precludes them from classification in Chapter 63. For all of these reasons, we find that the Aquadoodle Mat and water pens are properly classified together as a toy of heading 9503, HTSUS.
HOLDING:
By operation of GRI 1 (Note 1(t) to Section XI and Note 3 to Chapter 95) and AUSR 1(a), the Aquadoodle Mat and its water pens are classified in subheading 9503.00.00, HTSUS, which provides for “Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof…” The 2013 column one, general rate of duty is free.
Duty rates are provided for your convenience and 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:
HQ W968020, dated May 31, 2006, HQ H050118, dated July 13, 2010, NY N091640, dated January 26, 2010, NY R03958, dated June 15, 2006, and NY L88572, dated November 15, 2005 are hereby revoked.
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 and Trade Facilitation Division