CLA-2 OT: RR: CTF: TCM: H257274 ERB
Ms. Cynthia Gibbs
Gibbs Group
779 Shasta Street
Yuba City, CA 95991
RE: Revocation of NY R04558; Tariff Classification of a LumiKNIFE™
Dear Ms. Gibbs:
U.S. Customs and Border Protection (CBP) issued Gibbs Group New York Ruling Letter (NY) R04558 on August 22, 2006. NY R04558 pertains to the tariff classification under the Harmonized Tariff Schedule of the United States, (HTSUS) of a product called LumiKNIFE™, a professional hobby knife with an attachable Light Emitting Diode (LED). We have since reviewed NY R04558 and find it to be in error with respect to the classification of the knife, which is described in detail herein.
Pursuant to Section 615(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by Section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. l. 103-182, 107 Stat. 2057), this notice advises interested parties that CBP is revoking a ruling concerning the classification of LumiKNIFE™, under the HTSUS. Similarly CBP is revoking any treatment previously accorded by it to substantially identical transactions. Notice of the proposed revocation was published on April 8, 2015, in Volume 49, Number 14, of the Customs Bulletin. No comments were received in response to the proposed notice.
FACTS:
In NY R04558, CBP found the following:
You have described the LumiKNIFE™ as a professional hobby knife with LED light. The knife handle is made of zinc alloy and has a plastic level for releasing the interchangeable xacto razor blade. The blade is a fixed blade.
The applicable subheading for the LumiKNIFE™ will be 8211.92.9060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for knifes with cutting blades, serrated or not (including pruning knives), other than knives of heading 8208, and blades and other base metal parts thereof: other: other knives having fixed blades: other: other: other. The rate of duty will be 0.4¢ each + 6.1%.
The product is packaged together with a small LED light that attaches to the plastic handle to provide precision lighting to the spot the user is cutting. Online advertisement of the product also state that the product features a quick change design to release interchangeable blades.
ISSUE:
What is the proper classification of a hobby knife with interchangeable blades under the HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS 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 headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The HTSUS provisions under consideration in this case are as follows:
8211 Knives with cutting blades, serrated or not (including pruning knives), other than knives of heading 8208, and blades and other base metal parts thereof:
Other:
8211.92 Other knives having fixed blades:
8211.92.90 Other
8211.93 Knives having other than fixed blades
Because the instant classification analysis occurs beyond the four-digit heading level, GRI 6 is implicated. GRI 6 states:
For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes, and mutatis mutandis to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter, and subchapter notes also apply, unless the context otherwise requires.
Additional U.S. Note 3 to Chapter 82, which covers cutlery provides the following:
For the purposes of determining the rate of duty applicable to sets provided for in heading 8205, 8206, 8211 or 8215, a specific rate of duty or a compound rate of duty for any article in the set shall be converted to its ad valorem equivalent rate, i.e., the ad valorem rate which, when applied to the full value of the article determined in accordance with section 402 of the Tariff act of 1930, as amended, would provide the same amount of duties as the specific or compound rate.
Statistical Note 1 to Chapter 82 provides the following:
For the purposes of statistical reporting of sets in heading 8205, 8206, 8211 or 8215, the number of pieces reported shall be the total number of separate pieces in the set(s).
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. The ENs, although not dispositive or legally binding, provides a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN (4) to heading 8211, states the following:
This heading covers:
***
(4) Knives with several interchangeable blades, whether or not these are contained in the handles.
The EN (X) to GRI 3(b) provides that the term “goods put up in sets for retail sale” refer to goods that:
Consist of at least two different articles which are prima facie classifiable in different headings;
Consist of products or articles put together to meet a particular need or carry out a specific activity; and
Are put up in a manner suitable for sale directly to users without repacking (e.g. in boxes or cases or on boards).
Initially, we note the subject merchandise is imported in its condition ready for retail sale. In each package is included the plastic handle, blades, and the LED light. Considered separately, the subject merchandise consists of multiple components which are prima facie classifiable in different headings. They are packaged, marketed, and meant to be used together to meet a specific need; that is, precision cutting in crafting or hobbying. Lastly, the merchandise does not require repacking or additional components upon importation. As such, the subject merchandise satisfies the above requirements in the EN (X) to GRI 3(b) for “goods put up in sets for retail sale.”
GRI 3(b) continues, in relevant part, “…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.” Although the GRI’s do not provide a definition of “essential character,” the EN (VIII) of GRI 3(b) provides guidance. Essential character may “…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.” This is known as the “essential character test,” see Home Depot USA, Inc., v. United States, 491 F.3d 1334, 1337 (Fed. Cir. 2007) quoting Better Homes Plastics Corp. v. United States, 119 F.3d 969, 971 (Fed. Cir. 1997), and the application of this test requires a fact-intensive analysis. See Rollerblade, Inc. v. United States, 112 F.3d 481 (Fed. Cir. 1997).
Upon examination, the knife itself clearly provides the bulk and weight of the product. The LED is incidental to the product’s overall weight. No breakdown of the individual components’ cost was provided. Lastly, the product is marketed and advertised as a knife set. It is the expectation of the consumer that s/he is purchasing a knife with blades for the specific use of crafting or hobbying. The LED provides extra illumination to the targeted spot. But the knife will work regardless as to whether the LED is attached or not. Accordingly, for tariff classification purposes, the essential character of the set is imparted by the knife.
The term “interchangeable” is not defined in the HTSUS or the ENs. Thus, to assist in ascertaining the common meaning of the tariff term, CBP may consult lexicographic and scientific authorities, dictionaries, and other reliable sources. See Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 789, 6 Fed Cir. 121, 125 (Fed. Cir.) cert. denied, 488 U.S. 943 (1988).
CBP has had previous occasion to consider this term, as well as products substantially similar to the LumiKNIFE™ product. In Headquarters Ruling (HQ) H952988, dated February 4, 1993, CBP cited Webster’s II New Riverside University Dictionary (1988) which defined “interchangeable” as: Capable of mutual exchange, 1. To switch each of (two things) into the place of the other. 2. To give mutually: to exchange…to change places with each other. Webster’s Third New International Dictionary (Unabridged) (1966) defined it as: 1. Capable of being interchanged. 2. Mutual, reciprocal…5. Permitting mutual substitution without loss of function or suitability. [ ] Thus, CBP concluded that based on cited lexicographic authorities that, “the term “interchangeable blades” refers to the subject spare blades, whether they are contained in the handle of the cutters or packed separately in the blister pack.” See HQ 952988, supra.
Similarly, the term “fixed blade” is also not defined in the HTSUS or the ENs. But this term is understood to be a knife, whereby the blade itself does not fold, or slide, and is not one which is interchangeable with another, separate, blade. It is typically stronger due to the tang, the extension of the blade into the handle and lack of moving parts. Thus, by definition, a fixed blade knife cannot also be a knife with an interchangeable blade. Furthermore, this differentiation is evidenced by the subheadings in the Tariff which provide eo nomine for “knives having fixed blades” and “knives other than fixed blades.”
The LumiKNIFE™ has interchangeable blades. When a user releases the blade to exchange it for a replacement blade, and locks the new blade into place, this does not transform the product into a fixed blade product. It remains a knife with interchangeable blades. It is provided for eo nomine in the tariff, and is fully described by subheading 8211.93.00, as “Knives having other than fixed blades.” This is consistent with previous CBP rulings on similar products. See HQ 952988, dated February 4, 1993 (classifying various models of utility knives which contain spare blades either packaged with the knife, or within the handle of the knife in subheading 8211.93.00, HTSUS); HQ 968129, dated May 15, 2006 (classifying a hobby knife set which included 35 blades and 4 scribs in subheading 8211.93.00, HTSUS); NY I86743, dated September 25, 2002 (classifying a hobby knife set with 42 interchangeable blades in subheading 8211.93.00, HTSUS); NY H80238, dated May 1, 2001 (classifying a hobby knife set with 28 fine interchangeable blades suitable for arts and crafts work in subheading 8211.93.00, HTSUS); and see NY F88518, dated June 26, 2000 (classifying a set including 5 retractable-blade knifes in subheading 8211.93.00, HTSUS); N073138, dated September 10, 2009 (classifying a knife blade holder with five metal replacement blades. The knife handle had a retractable slide mechanism that is activated by depressing a button on the top of the handle. When the mechanism is extended, one of the replacement blades can be inserted and locked into the holder. The product was classified in subheading 8211.93.00, HTSUS); N007899, dated March 14, 2007 (classifying a heavy duty utility knife with a retractable blade. One steel blade is installed in the knife ready for use, and it was packaged with five extra blades stored within a compartment in the handle. The product was classified in subheading 8211.93.00, HTSUS).
Articles classified in subheading 8211.93.00 are measured and reported in individual units and assessed a compound rate of duty (currently 3¢ each + 5.4%). As we have previously ruled, where the appropriate provision in Chapter 82, HTSUS, carries a specific or compound rate of duty in addition to the ad valorem rate, as it does here, the specific or compound rate is applied to each of the items in the set. See HQ 967376, HQ 967377, and HQ 966981, all regarding the classification of pumpkin carving knife sets and dated March 7, 2005. See generally, CBP’s Informed Compliance Publication, Classification of Sets Under HTSUS, updated March 2004, page 19 (section titled, “Sets Classified in Specific or Compound Rate of Duty Provisions” provides useful background on this topic).
HOLDING:
By application of GRI 1 and GRI 3(b), the subject LumiKNIFE™ set is provided for in heading 8211, HTSUS. It is specifically provided for under subheading 8211.93.00, HTSUS, which provides for, “Knifes with cutting blades, serrated or not (including pruning knifes), other than knives of heading 8208, and blades and other base metal parts thereof: Other: Knifes having other than fixed blades.” The column one, general rate of duty is 3¢ + 5.4% ad valorem.
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 at www.usitc.gov
EFFECT ON OTHER RULINGS:
NY R04558, dated August 22, 2006, is 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.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division