CLA-2 CO:R:C:F 088323 STB
Mr. Jeremy R. Page
Katten, Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60606-3693
RE: Pencil Boxes and Geometry Kits
Dear Mr. Page:
This is in response to your letter of October 3, 1990, on
behalf of Rolykit Inc., in which you requested a ruling
concerning the tariff classification of merchandise described as
pencil boxes and geometry kits under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA). Pictures of
the merchandise were submitted with your request: an actual
sample of the geometry kit was provided to our office at our
meeting of February 8, 1991.
FACTS:
The subject merchandise consists of a Rolykit Pencil Box
(JS-210), a Rolykit Junior Pencil Box (JS-100) and a Rolykit
Geometry Set (JS-270). The merchandise is imported by Rolykit
from its parent company in the Netherlands, Rolykit Product
Division of Vandermolen bv. The importer states that these items
are based on Rolykit's patented storage system whereby the sturdy
plastic cases "unfold" to reveal a number of compartments. The
case is then "refolded" into a compact case or kit for the
storage or transporting of various items. The items which will
be enclosed in the cases will vary depending on the particular
use for which the entire kit is intended.
The Rolykit Pencil Box contains, and is sold with, eight
fiber tipped pens, nine pencils, one ruler and one pencil
sharpener. The Junior Pencil Box contains six fiber tipped pens,
six pencils, one pencil sharpener and one eraser. The Geometry
Set contains one geometric triangle, one compass, one tube of
compass leads, one eraser, three lead pencils, one propelling
pencil and one fine liner pen.
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ISSUE:
Whether the geometry set should be classified under
subheading 9017.20.8000, HTSUSA, as "other drawing, marking-out
or mathematical calculating instruments" or under subheading
3923.10.0000, HTSUSA, as "articles for the conveyance of packing
of goods, of plastics...boxes...?"
Whether the pencil boxes and accompanying items should be
classified under subheading 9609.10.0000, HTSUSA, as "pencils
and crayons..." or under subheading 3923.10.0000, HTSUSA, as
"articles for the conveyance of packing of goods, of
plastics...boxes...?"
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) set forth the
legal framework in which merchandise is to be classified under
the HTSUSA. GRI 1 requires that classification be determined
first according to the terms of the headings of the tariff and
any relative section or chapter notes and, unless otherwise
required, according to the remaining GRI's taken in order.
In the case of the instant merchandise, one item, the
geometry set, can be classified by reference to GRI 1. Heading
9017, HTSUSA, provides specifically for, among other items,
"drawing sets." According to Explanatory Note 9017(A), this
chapter includes, in pertinent part, the following:
(A) Drawing Instruments.
* * * *
(3) Drawing compasses, dividers, reduction
compasses, spring bows, mathematical drawing
pens, dotting wheels, etc., whether in a case
(e.g., drawing sets) or separately.
* * * *
(5) Protractors, from the ordinary protractors
found in drawing sets to the complex
protractors as used, for example, in
engineering.
* * * *
In New York Ruling Letter (NYRL) 830304, dated June 17,
1988, Customs issued a ruling that is in accordance with Chapter
9017, HTSUSA, and the above Explanatory Notes and classified
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merchandise similar to the geometry set at issue as a "drawing
set." The merchandise that was at issue in NYRL 830304 is
described by Customs as follows:
The drawing set, sample submitted, consists of a
compass, a pencil, a protractor, a six inch ruler, and
two triangles. The last four items are all plastic. It
is packaged in a flimsy clear plastic triangular container
seven inches high with stickers describing the contents as
a free style drawing set.
In your letter of February 13, 1991, you contend that the
above merchandise can be distinguished from the geometry set now
in question because the above merchandise is packaged in a
"flimsy" storage container thus providing no possibility that the
container in that case could provide the essential character of
the set. It is your position that the essential character of the
instant geometry set is provided by the container.
We disagree with this analysis. As noted above, the instant
geometry set can be classified by reference to GRI 1; it is
Customs position that this merchandise is specifically provided
for in the HTSUSA. Therefore, we do not reach the discussion of
essential character in GRI 3(b); essential character is not an
issue in the classification of this merchandise.
The situation is different, however, for the classification
of the pencil box and the junior pencil box. Neither of these
items is classifiable in any one heading by itself under GRI 1.
Therefore, reference to the subsequent GRI's is necessary. GRI 2
is not applicable here. GRI 3, however, is relevant. It
provides, in pertinent part:
3. 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.
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The Explanatory Notes to GRI 3(b) provide guidance for
determining what constitutes a "set." Note X states that the
term "goods put up 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;
(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 repacking (e.g.,
in boxes or cases or on boards).
The merchandise at issue clearly satisfies the above
criteria of a "set." Both pencil boxes contain pencils and a
pencil sharpener, which are classifiable in two different
headings as well as various other items which are also
classifiable in different headings under the HTSUSA. The items
are sold together to carry out the specific activity of writing
and they are put up in a manner suitable for sale directly to
users without repacking.
The next issue to be resolved is which item within the set
provides the essential character. Explanatory Note VIII to GRI
3(b) states that:
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 the constituent
material in relation to the use of the goods.
It is our determination that the plastic, compartmentalized
box provides the essential character of both of the subject
pencil boxes. The boxes involved are of a unique, patented
design. The marketing literature of the importer places more
emphasis on the boxes than on the items that are included in
these boxes. At one point, the literature states as follows:
Millions of people know about the extremely useful
storage box: the Rolykit. A unique storing system,
which is patented in 36 countries and manufactured
in Holland, Japan and the United States of America.
Based on Rolykits unique closing mechanism we have
developed a totally new product range, the
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Rolykit JS-200 series. Aimed at young people
between the ages of 6 and 20. The product range
consists of a Pencil Box, Paint Box and a
Geometry Set.
Thus, the box plays an important role in the use of these kits.
It is very probable that these boxes will remain in use long
after the pens and pencils that initially accompany them have
been used up and need replacement. Additionally, the box
provides a majority of the bulk of the kits and a substantial
amount of the value. The box accounts for approximately 50% of
the cost of the pencil box; all of the other components combined
account for the other 50%. The box provides over 50% of the
value of all of the junior pencil box components.
The determination that the boxes provide the essential
character of these pencil boxes is in accord with the current
Customs position. In at least four recent Headquarters Ruling
Letters (HRLs), the containers/organizers of various items have
been deemed to constitute the essential character of the
merchandise. In all of those cases, as occurs with the instant
pencil boxes, the containers were constructed of sturdy
materials, they were designed specifically and carefully for
their particular use, and they provided a substantial portion of
the bulk and value of the merchandise. These HRLs are HRL
084715, dated August 24, 1989, HRL 084717, dated September 13,
1989, HRL 083262, dated July 26, 1982 and HRL 085872, dated
January 29, 1990.
In contrast are the cases in which Customs has either not
discussed the containers or has held that the containers did not
constitute the essential character of the merchandise. In most
of those cases, the containers were of flimsy construction, such
as the various plastic pouch rulings where school supplies are
packaged in cheap plastic pouches. One such ruling is HRL
085356, dated November 20, 1989. It is significant that even in
that ruling, no items, including the writing instruments, were
found to constitute the essential character of the merchandise.
In the other few rulings in which the containers were not found
to constitute the essential character, the containers involved
provided an insignificant portion of the value, and sometimes of
the bulk, of the merchandise; the containers seemed to be
designed primarily as a cheap packaging item that would be
disposed of once the usefulness of the included items had
expired, if not before. In such situations GRI 5(b) requires
that the packing materials and packing containers be classified
along with the goods they contain.
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HOLDING:
The merchandise identified as a "geometry set" is classified
under subheading 9017.20.80, HTSUSA, the provision for "drawing,
marking-out or mathematical calculating instruments (for
example...drawing sets...other." The applicable duty rate is
5.8% ad valorem.
The merchandise identified as "pencil box" and "junior
pencil box" is classified under subheading 3923.10.0000, HTSUSA,
the provision for "articles for the conveyance or packing of
goods, of plastics...boxes, cases, crates and similar articles."
The applicable duty rate is 3% ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division