OT:RR:CTF:CPMM H289250 MMM
Mr. Joseph Stinson OMNI Global Sourcing Solutions, Inc. 4050 S. 26TH St., #200 Philadelphia, PA 19112
RE: Revocation of NY N284187; Revocation of HQ H072441, NY N027262, HQ H070673, HQ H095410, HQ 952513, and HQ 953932 and modification of NY I83133, HQ H066795, HQ H0700671, and HQ 955758 by Operation of Law; Classification of spider web lights
Dear Mr. Stinson,
This is in reference to the New York Ruling Letter (NY) N284187, issued to you by U.S. Customs and Border Protection (CBP) on March 24, 2017, concerning classification of spider web lights from China under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed your ruling, and determined that it is incorrect, and for the reasons set forth below, are revoking your ruling.
We have also reviewed Headquarters Ruling Letter (HQ) H072441, dated September 19, 2011, NY N027262, dated May 20, 2008, HQ H070673, dated September 19, 2011, HQ 095410, dated September 19, 2011, HQ 952513, dated April 26, 1993, HQ 953932, dated April 10, 1993, NY I83133, dated July 10, 2002, and HQ 955758, dated April 15, 1994 HQ H066795, dated March 30, 2010, and HQ H070671, dated September 19, 2011, all issued before the decision in Target Gen. Merch., Inc. v. United States, 392 F. Supp. 3d 1326, 1335 (Ct. Int’l Trade 2019), and to the extent they are inconsistent with the holding there, are revoked or modified by operation of law.
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 (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), a notice of the proposed action was published in the Customs Bulletin, Volume 55, No. 16, on April 28, 2021. No comment was received in response to this notice.
FACTS:
In your ruling NY N284187, CBP stated as follows in reference to the subject merchandise:
The merchandise is identified as the 24” UL Halloween Corner Spider Web Lights, Rite Aid Item #9041392, and Mfg. #ES65-771AST. The product is light strings comprised of two black insulated wire conductors measuring 6 feet, incorporating 20 sockets. Each socket has a miniature incandescent lamp that is available in two different colors; orange and purple. The lamps are equally spaced at approximately 5 inches apart along the triangular spider web light string. The corner web size is 24 inches by 24 inches. The light string is designed for both indoor and outdoor use and may be connected end-to-end with additional light strings.
CBP classified the merchandise in NY N284187 in subheading 9405.30.00, HTSUS.
ISSUE:
Whether the subject spider web light set should be classified under subheading 9405.40, HTSUS, as “other electric lamps,” or under subheading 9405.30, HTSUS, as “lighting sets of a kind used for Christmas trees?”
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. 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 GRIs 2 through 6 may then be applied in order. GRI 2(a) provides, in relevant part, that "[a]ny reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished articles has the essential character of the complete or finished article."
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 2020 HTSUS provisions under consideration are as follows:
9405: Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:
9405.30.00 Lighting sets of a kind used for Christmas trees…
9405.30.0010 Miniature series wired sets…
9405.40 Other electric lamps and lighting fittings:
Of base metal:
Other:
9405.40.82 Light-emitting diode (LED) backlights modules, the foregoing which are lighting sources that consist of one or more LEDs and one or more connectors and are mounted on a printed circuit or other similar substrate, and other passive components, whether or not combined with optical components or protective diodes, and used as backlights illumination for liquid crystal displays(LCDs)
9405.40.84 Other…
In examining the competing subheadings within heading 9405, HTSUS, we note that subheading 9405.30.00, HTSUS, is a “principal use” provision within the meaning ascribed in Target Gen. Merch., Inc. v. United States, 392 F. Supp. 3d 1326, 1335 (Ct. Int’l Trade 2019). In Target Inc., the court concluded that because subheading 9405.30.00, HTSUS, is a principal use provision, it is therefore subject to Additional U.S. Rule of Interpretation 1(a), HTSUS, which states as follows:
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 CIT in Target Inc., in discussing principal use held, that based on the plain language of subheading 9405.30, that the provision applies only to lights used on Christmas trees and the goods must meet the following two requirements:
1) the good is a "lighting set," including those goods that are part of the "general class of lights on strings," and 2) the principal use of the lighting sets is for use on Christmas trees, not "lighting sets used for other purposes," such as a general decoration or source of illumination.
Therefore, to classify the subject merchandise, it is necessary to determine whether it belongs to the class or kind of goods that are recognized as being principally used for the decoration of Christmas trees. Courts have provided several factors to apply when determining whether merchandise falls within a particular class or kind of good. They include: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels of trade in which the merchandise moves; (4) the environment of the sale (e.g. the manner in which the merchandise is advertised and displayed); (5) the usage of the merchandise; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use.
In Target Inc., the CIT found that the merchandise in dispute, a black-corded light set (with green, purple, and orange light bulbs) and a white-corded light set (with red, blue, purple, amber, light blue, and green light bulbs), were not classified in subheading 9405.30 because “…the black-corded light sets are principally used as Halloween decorations and … the white-corded light sets are principally used for general decorative purposes” and neither light set is principally used on Christmas trees and their packaging do no suggest that the goods were designed for such use.
Additionally, The CIT goes on to establish that green-corded light sets are “of a kind used for Christmas trees,” and the black and white-corded light sets are not commercially fungible to goods with green-corded lights sets, as their use, the consumer expectations, and the environment of sale of the black and white-corded lights sets are distinct from the green-corded lights sets.
Furthermore, in Primal Lite, the CIT found that the merchandise at issue did not belong to the class or kind of merchandise used for Christmas trees because “plastic shapes in the form of objects such as fruits, vegetables, hearts, rearing horses, guitars and American flags” were included to be fitted over the lights and “are used for indoor and outdoor lighting decoration and illumination purposes unrelated to Christmas trees or the Christmas holiday.
The triangular spider web shaped corner light set in NY N284187 is likewise distinguishable from Christmas themed light sets. Not only is the cord not green, but the spider web’s triangular shape for use in a corner of a room or doorway prevents it from use on a Christmas tree. Hence, while the merchandise is not identical to the string light sets discussed in Target Inc. or Primal Lite, the analysis applies and the subject merchandise is correctly classified as other lighting fittings, described in subheading 9405.40.84, HTSUS. Furthermore, all prior rulings classifying black and white-corded light sets or containing non-Christmas light covers in subheading 9405.30, HTSUS, are revoked or modified by operation of law.
HOLDING:
By application of GRIs 1 and 6, the spider web lights are classified in subheading 9405.40.84, HTSUS, which provides for: “Lamps and lighting fittings…and parts thereof not elsewhere specified or included: Other electric lamps and lighting fittings: Other: Other.” The 2020 column one general rate of duty for subheading 9405.40.84, HTSUS, is 3.9% ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9405.40.84, HTSUS, unless specifically excluded, are subject to an additional 25% ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 9405.40.84, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS
NY N284187, dated March 24, 2017, is hereby REVOKED.
HQ H072441, dated September 19, 2011, NY N027262, dated May 20, 2008, HQ H070673, dated September 19, 2011, and HQ H095410, dated September 19, 2011, are hereby REVOKED by operation of law in accordance with the holding in Target, Inc.
NY I83133, dated July 10, 2002, HQ H066795 dated March 30, 2010, and HQ H070671, dated September 19, 2011, are hereby MODIFIED by operation of law in accordance with the holding in Target, Inc.
HQ 952513, dated April 26, 1993, and HQ 953932, dated April 10, 1993, are hereby REVOKED by operation of law in accordance with the holding in Primal Lite.
HQ 955758, dated April 15, 1994, is hereby MODIFIED by operation of law in accordance with the holding in Primal Lite.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Allyson Mattanah for
Craig T. Clark, Director
Commercial and Trade Facilitation Division