CLA-2 OT:RR:CTF:TCM H240196 EGJ
Ruby Chan
Customs Compliance Analyst
Williams-Sonoma, Inc.
151 Union Street
San Francisco, CA 94111
RE: Revocation of NY N218739, NY N117616, NY N087304, NY N084602 and NY N063740: Classification of Wooden Shelving Units with Storage Baskets
Dear Ms. Chan:
This is in reference to New York Ruling Letter (NY) N218739, dated June 20, 2012, issued to you concerning the tariff classification of the Benchwright Ladder (SKU 8633315). In NY N218739, U.S. Customs and Border Protection (CBP) classified the subject merchandise in subheading 9403.50, HTSUS, which provides for “Other furniture and parts thereof: wooden furniture of a kind used in the bedroom …” We have reviewed NY N218739 and find it to be in error. For the reasons set forth below, we hereby revoke NY N218739 and four other rulings on similar wooden shelving units with storage baskets: NY N117616, dated August 23, 2010, NY N087304, dated December 21, 2009, NY N084602, dated December 8, 2009, and NY N063740, dated June 12, 2009.
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 April 30, 2014, in the Customs Bulletin, Volume 48, No. 17. CBP received no comments in response to this notice.
FACTS:
The Benchwright Ladder is a floor standing, wooden shelving unit used for storage. It resembles a stepladder and has four shelves of different sizes. Each shelf resembles a rung on the ladder, with the smallest shelf at the top and the largest at the bottom. Unlike ladder rungs, however, each shelf covers the entire gap between the ladder’s four legs. Each shelf is a flat piece of wood with no lip or raised outer edge. The shelving unit measures 17.75 inches long by 18 inches wide by 58 inches high.
On each of the four shelves there is a steel wire storage basket with a cotton/polyester liner. The size of each basket matches the size of each shelf, and is not permanently affixed to the wood. According to your submission, each component contributes the following percentage to the total cost of the unit: the wooden shelving is 70%, the steel wire baskets are 15% and the basket liners are 15%. All of the components are packaged together for retail sale. A picture of the subject merchandise is provided below.
According to your ruling request, the subject merchandise will be sold through the Pottery Barn retail stores, the catalog and the website. According to the Pottery Barn website, the Benchwright Ladder is part of the Benchwright collection. Other items in the Benchwright collection include a single sink console, a double sink console, two medicine cabinets and a floor-standing mirror. All of the items have the same rustic wood appearance as the Benchwright Ladder. Pictures of the Benchwright Ladder show it filled with items such as towels, soaps and sponges. All of the pictures show the subject merchandise located in or near a bathroom.
ISSUE:
What is the tariff classification of the Benchwright Ladder?
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. Under GRI 6, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
GRI 3(b) provides as follows:
When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
…
(b) 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 HTSUS headings and subheadings under consideration are the following:
4421 Other articles of wood:
4421.90 Other:
* * *
6307 Other made up articles, including dress patterns:
6307.90 Other:
* * *
7323 Table, kitchen or other household articles and parts thereof, of iron or steel …:
Other:
7323.99 Other:
* * *
9403 Other furniture and parts thereof:
9403.30 Wooden furniture of a kind used in offices:
9403.40 Wooden furniture of a kind used in the kitchen:
9403.50 Wooden furniture of a kind used in the bedroom:
9403.60 Other wooden furniture:
* * *
Note 1(o) to Chapter 44 provides as follows:
1. This chapter does not cover:
…
(o) Articles of chapter 94 (for example, furniture, lamps and lighting fittings, prefabricated buildings)…
* * *
Note 2 to Chapter 94 provides as follows:
2. The articles (other than parts) referred to in headings 9401 to 9403 are to be classified in those headings only if they are designed for placing on the floor or ground.
The following are, however, to be classified in the above-mentioned headings even if they are designed to be hung, to be fixed to the wall or to stand one on the other.
(a) Cupboards, bookcases, other shelved furniture (including single shelves presented with supports for fixing them to the wall) and unit furniture;
(b) Seats and beds.
* * *
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 to GRI 3(b) states, in pertinent part:
RULE 3 (b)
(VI) This second method relates only to:
(i) Mixtures.
(ii) Composite goods consisting of different materials.
(iii) Composite goods consisting of different components.
(iv) Goods put up in sets for retail sales.
It applies only if Rule 3 (a) fails.
(VII) 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.
(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.
(IX) For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.
Examples of the latter category of goods are:
(1) Ashtrays consisting of a stand incorporating a removable ash bowl.
(2) Household spice racks consisting of a specially designed frame (usually of wood) and an appropriate number of empty spice jars of suitable shape and size.
As a general rule, the components of these composite goods are put up in a common packing.
* * *
EN 94.03 provides, in pertinent part, as follows:
This heading covers furniture and parts thereof, not covered by the previous headings. It includes furniture for general use (e.g., cupboards, show cases, tables, telephone stands, writing desks, escritoires, book cases, and other shelved furniture (including single shelves presented with supports for fixing them to the wall), etc.), and also furniture for special uses …
The heading does not include:
…
(b) Ladders and steps, trestles, carpenters’ benches and the like not having the character of furniture; these are classified according to their constituent material (headings 44.21, 73.26, etc.) …
* * *
The Benchwright Ladder is comprised of three components: the wooden ladder, the steel baskets and the textile basket liners. Each of these components is comprised of a different material. The steel baskets are classified in heading 7323, HTSUS, as household articles of steel. See NY N199238, dated January 13, 2012, NY N093425, dated February 18, 2010, and NY N021024, dated December 20, 2007 (all classifying metal baskets in heading 7323, HTSUS). The textile basket liners are classified in heading 6307, HTSUS, as other made up articles. NY J86047, dated July 21, 2003, NY E80041, dated June 18, 1999, and NY D81472, dated August 26, 1998 (all classifying textile basket liners in heading 6307, HTSUS).
CBP has issued rulings which classify wooden ladders in heading 4421, HTSUS, as other articles of wood. See, e.g. NY N195648, dated January 4, 2012, and NY N056136, dated April 24, 2009. However, Note 1(o) to Chapter 44 excludes furniture of Chapter 94. If the wooden ladder is classifiable as furniture of heading 9403, HTSUS, it cannot be classified as other articles of wood in heading 4421, HTSUS.
Headings 9401 to 9403, HTSUS, provide for furniture. Note 2 to Chapter 94 describes the merchandise covered by the term “furniture.” Note 2 states that “the articles … referred to in headings 9401 to 9403 are to be classified in those headings only if they are designed for placing on the floor or ground.” Further, Note 2 states that “cupboards, bookcases, other shelved furniture…seats and beds” are classifiable as furniture even if they are “designed to be hung, to be fixed to the wall or to stand one on the other.”
In addition to Note 2 to Chapter 94, the U.S. Court of Customs Appeals (predecessor to the U.S. Court of Appeals for the Federal Circuit) defined furniture in Morimura Bros. v. United States, 2 Ct. Cust. Appls. 181, 182, T.D. 31941 (1911) (Morimura Bros.), wherein the court stated:
The term 'furniture' as ordinarily used may mean that with which anything is furnished, supplied, or equipped. House furniture has a restricted signification, however, which does not cover everything with which a house may be furnished, supplied, or equipped. House furniture, in these modern times, has come to denote those articles of household utility which were formerly made of wood and which are designed for the personal use, convenience and comfort of the dweller. Id. cited with approval by Furniture Import Corp. v. United States, 56 Cust. Ct. 125, 131-132 (1966); see also The Pomeroy Collection, Ltd. v. United States, 893 F.Supp. 2d 1269, 1284-1285 (Ct. Int’l Trade 2013).
EN 94.03(b) states that ladders which do not have the character of furniture are not classifiable as furniture. However, the instant wooden ladder matches the description set forth in Note 2 to Chapter 94 because it is designed for placing on the floor or the ground. Moreover, it is similar to cupboards, bookcases and other shelved furniture because it includes four shelves rather than ladder rungs. Also, the wooden ladder satisfies the definition of furniture set forth in Morimura Bros. because it is an article of household utility, designed for the personal use, convenience and comfort of the dweller. 2 Ct. Cust. Appls. at 182. Namely, the wooden ladder is a shelved storage unit for towels, toiletries and other bathroom articles. For these reasons, the wooden ladder is an article of furniture classifiable in heading 9403, HTSUS. As such, Note 1(o) precludes the wooden ladder from classification in Chapter 44.
The three components of the Benchwright Ladder are the ladder, the metal baskets and the textile liners. These are packaged and sold together as a storage unit at retail sale. Each component is comprised of a different constituent material and is classified under a different heading. No single heading describes the complete unit. As such, we look to GRI 3 for the classification of the Benchwright Ladder.
EN(IX) to GRI 3(b) states that “composite goods” means goods made up of different components that are adapted one to the other and are mutually complementary. Together, they form a whole which would not normally be offered for sale in separate parts. EN(IX)(2) to GRI 3(b) provides a spice rack as an example of a composite good. The spice rack consists of a frame and spice jars of suitable shape and size. Similarly, the Benchwright Ladder consists of a frame which holds metal baskets of suitable shape and size. The components of the Benchwright Ladder are adapted to each other and are mutually complementary. Each component contributes to the Benchwright Ladder’s storage function. As such, the Benchwright Ladder is a composite good which must be classified using GRI 3(b).
GRI 3(b) states that mixtures, composite goods and retail sets shall be classified as if they consisted of the component which gives them their essential character. In order to identify a composite good’s essential character, the U.S. Court of International Trade (CIT) has applied the factors listed in the ENs to GRI 3(b), which are “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.” The Home Depot v. United States, 427 F. Supp. 2d 1278, 1293 (Ct. Int’l Trade 2006). With regard to the role of the component which imparts the essential character, the court has stated it is “that which is indispensable to the structure, core or condition [of the retail set].” Id. citing A.N. Deringer, Inc. v. United States, 66 Cust. Ct. 378, 383 (1971).
Applying the aforementioned factors, the wooden ladder has the greatest bulk and weight of the three components. The wooden ladder also has the greatest value as it comprises 70% of the Benchwright Ladder’s total value. However, the merchandise consists of four metal baskets and four textile liners but only one wooden ladder. Looking to the role of the Benchwright Ladder, it is marketed for both storage and organization. All three of the components contribute to these two functions. The wooden ladder provides the shelving, and the baskets and liners form storage containers. Taking all of the factors into account, the wooden ladder imparts the essential character to the Benchwright Ladder because it has the greatest bulk, weight and value while also contributing to the overall function.
According to GRI 6, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings. The wooden ladder is classified in heading 9403, HTSUS, as furniture. Under heading 9403, HTSUS, there are four separate subheadings for wooden furniture. Subheadings 9403.30, HTSUS, 9403.40, HTSUS, and 9403.50, HTSUS, each provide for wooden furniture of a kind used in offices, kitchens and bedrooms, respectively. Subheading 9403.60, HTSUS, is a residual provision for other wooden furniture. If the ladder is not classifiable in subheadings 9403.30 through 9403.50, HTSUS, it will be classified in subheading 9403.60, HTUS.
In The Pomeroy Collection, Ltd. v. United States, 559 F.Supp. 2d 1374, 1394 n. 23 (Ct. Int’l trade 2008), the CIT described different types of HTSUS provisions as follows:
A “use” provision is “a provision describing articles by the manner in which they are used as opposed to by name,” while an eo nomine provision is one “in which an item is identified by name.” Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1308 (Fed. Cir. 2003). And there are two types of "use" provisions -- "actual use" and "principal (formerly known as "chief") use." An "actual use" provision is satisfied only if "such use is intended at the time of importation, the goods are so used and proof thereof is furnished within 3 years after the date the, goods are entered." See Additional U.S Rule of Interpretation ("ARI") 1(b) (quoted in Clarendon Mktg., Inc. v. United States, 144 F.3d 1464, 1467 (Fed, Cir. 1998)). In contrast, a "principal use" provision functions essentially "as a controlling legal label, in the sense, that even if a particular import is proven to be actually used inconsistently with its principal use, the import is nevertheless classified according to its principal use." Clarendon Mktg., 144 F.3d at 1467.
In Primal Lite, Inc. v. United States, 22 C.I.T. 697, 700 (1998), the CIT described one method to identify principal use provisions as follows:
The use of the term "of a kind" is nothing more than a statement of the traditional standard for classifying importation[s] by their use, namely, that it need not necessarily be the actual use of the importation but is the use of the kind of merchandise to which the importation belongs.
Subheadings 9403.30, HTSUS, 9403.40, HTSUS, and 9403.50, HTSUS, each use the term “of a kind.” As such, these subheadings are principal use provisions. Under Additional U.S. Rule of Interpretation 1(a) (AUSR 1(a)), tariff classification under a principal use provision must be determined in accordance with the use in the United States of that class or kind to which the imported goods belong.
Thus, in order to be classified as wooden furniture of a kind used in offices, kitchens or bedrooms, the wooden ladder must belong to the same kind or class of goods as such furniture. In United States v. Carborundum Co., 536 F.2d 373, 377 (CCPA 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).
In NY N218739, we classified the Benchwright Ladder as wooden furniture of a kind used in the bedroom under subheading 9403.50, HTSUS. To support this classification, we must apply the Carborundum factors and determine that the Benchwright Ladder is of the same class or kind of goods as bedroom furniture. First, we will examine the physical characteristics of the merchandise. We note that the wooden ladder is a shelving unit designed to look like a rustic ladder. It is designed to accommodate wire baskets of suitable shapes and sizes. Unlike bedroom dresser drawers, the baskets are completely open across the top. As such, the contents of the baskets are in plain view. Standard bedroom furniture typically features closed drawers to hide contents from view. Additionally, the Benchwright Ladder is too tall for use as a bedside table.
Next, with regard to channels of trade, we note that the Pottery Barn’s website only pictures the Benchwright ladder in or near a bathroom. The Benchwright line of merchandise also includes medicine cabinets, sink consoles, a floor-length mirror, side tables and a storage tower. The advertising on the Pottery Barn’s website depicts the wooden ladder full of towels, soaps and toiletries, though we note that the storage compartments are not limited in what they can hold of a certain size and weight.
With regard to the sales environment, the Pottery Barn store sells furniture which is suitable for many different rooms in the home. The Benchwright line of furniture is pictured in advertising in the bathroom and the living room as general storage furniture. For instance, the Benchwright Tower, a companion piece to the subject ladder, is also a tall shelving unit pictured with baskets on its wooden shelves. In the Pottery Barn website advertisement, the Benchwright Tower is situated next to a home entertainment system in a living room, while the instant ladder is pictured in a bathroom. Hence, the Benchwright Ladder, one amongst several pieces of furniture in the Benchwright line, is suitable for use for general storage and home organization in many rooms of the home.
Regarding economic practicality, the bedroom dressers on the Pottery Barn website cost approximately $700 or higher. Bookcases and other modular storage furniture are listed at prices ranging between $100 and $400. The Benchwright Ladder is marketed for retail sale at $299. As such, the Benchwright Ladder is similar in cost to general storage furniture, as opposed to bedroom storage furniture. Taking all of these factors into account, the evidence simply does not show the Benchwright Ladder to be of the same class or kind of goods used in bedrooms, which is a necessary condition for classification in subheading 9403.50, HTSUS.
As the Benchwright Ladder is sold for general home storage, it is not principally used in kitchens, offices or bedrooms. As such, the ladder is classified in residual subheading 9403.60, HTSUS, which provides for “other” wooden furniture. As the wooden ladder imparts the essential character to the entire storage unit, the subject merchandise is classified in subheading 9403.60, HTSUS. This decision is consistent with other CBP rulings which classify wooden storage units with baskets in subheading 9403.60, HTSUS. See, e.g. NY N064537, dated June 22, 2009, NY R02873, dated November 30, 2005, and NY H89412, dated March 21, 2002.
The merchandise in question may be subject to antidumping duties or countervailing duties. We note that the International Trade Administration is not necessarily bound by a country of origin or classification determination issued by CBP, with regard to the scope of antidumping orders or countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection. You can contact them at http://www.trade.gov/ia/ (click on “Contact Us”). For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using ACE, the system of record for AD/CVD messages, or the AD/CVD Search tool at http://addcvd.cbp.gov/index.asp?ac=home.
HOLDING:
By operation of GRI 1 (Note 1(o) to Chapter 44 and Note 2 to Chapter 94), GRI 3(b), GRI 6 and AUSR 1(a), the Benchwright Ladder is classified in subheading 9403.60.80, HTSUS, which provides for “Other furniture and parts thereof: Other wooden furniture: Other …” The 2014 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:
NY N218739, dated June 20, 2012, NY N117616, dated August 23, 2010, NY N087304, dated December 21, 2009, NY N084602, dated December 8, 2009, and NY N063740, dated June 12, 2009 are hereby revoked.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division