CLA-2 RR:TC:SM 559457 DEC
Area Director of Customs
New York Seaport Area
Six World Trade Center - Room 432
New York, New York 10048
RE: Internal Advice 41/95; Applicability of duty-free treatment
under subheading
9811.00.60, HTSUS, for unmarked lipstick testers
Dear Sir:
This is in response to your memorandum of September 25,
1995, forwarding a request for internal advice from Siegel,
Mandell & Davidson, P.C. on behalf of Christian Dior perfumes,
Incorporated (Christian Dior), concerning the eligibility of
lipstick testers for duty-free treatment pursuant to subheading
9811.00.60, Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
Christian Dior imported seventeen hundred items that were
invoiced as lipstick testers. The lipstick testers in question
have a permanently affixed color ball attached to the top of the
lipstick tester lid that resembles a knob. The color of the top
mimics the shade of lipstick contained in the tester. The color
code is printed on the ledge of the lipstick case. The lipstick
testers are arranged in a specially constructed display panel
that prominently features each of the lipstick testers' color
ball. The imported lipstick tester contains the lipstick, some
numerical references, and the French and English name of the
shade. The lipstick tester case bears the name "Christian Dior,"
but does not indicate the fact that it is a tester or sample of
any kind. Unlike the lipstick testers, the actual retail
lipstick that Christian Dior markets is packaged in a hexagonal
lipstick case. Furthermore, counsel for the importer states that
the retail cases are printed with Christian Dior's name and the
label contains all legally required information. The retail
cartons are also packaged with a dark blue corrugated liner.
ISSUE:
Whether the lipstick testers as described above are
sufficiently altered to render them unsuitable for sale or for
use otherwise than as a sample used to solicit orders for
foreign-produced products pursuant to subheading 9811.00.60,
HTSUS.
LAW AND ANALYSIS:
Subheading 9811.00.60, HTSUS, provides for the duty-free
treatment of any sample either valued at less than $1 each or
marked, torn, perforated, or otherwise treated so that it is
unsuitable for use otherwise than as a sample to be used in the
U.S. only for soliciting orders for products of foreign
countries. The controlling factor is whether the importer uses
the samples for the purpose of soliciting purchase orders for
foreign merchandise and the creation of demand for future orders.
If the items at issue are valued at more than $1 each, they may
not be entered free of duty under this tariff provision unless
they are marked as samples or treated in some way to render them
unsuitable for commercial sale or any use other than as samples
for obtaining orders for similar articles.
Counsel for the importer contends that the lipstick testers
which incorporate a permanently attached and prominently visible
color ball have been appropriately treated so as to be unsuitable
for sale for use other than a tester. In addition, counsel
argues that a retail customer would not expect to receive a
lipstick with a color ball attached. The lipstick testers are
also uniquely designed from the normal retail lipstick container
which enables it to fit into the specially constructed Christian
Dior cosmetic display housing.
Counsel correctly states that there is no statutory
requirement that articles entered under subheading 9811.00.60,
HTSUS, must literally be marked with the words "sample - not for
sale". The tariff provision clearly states that either the
article is valued at less than $1 each or marked, torn,
perforated, or otherwise treated so that it is unsuitable for use
otherwise than as a sample to be used in the U.S. only for
soliciting orders for products of foreign countries.
In Headquarters Ruling Letter (HRL) 554868, dated April 10,
1989, Customs determined that two rectangular pieces of carpeting
material that measured 13 by 18 inches and 26 by 18 inches with
hemmed edges and a hole in the smaller piece so that a chain
could be inserted to fasten a number of pieces together did not
qualify for duty-free treatment as a sample. Customs found that
the larger piece of carpeting was suitable as a floor covering
such as a runner or door mat. We stated that in order for the
pieces of carpet to be eligible for free entry under subheading
9811.00.60, HTSUS, they must be treated to render them
commercially unsuitable for any use other than as samples for
taking orders for foreign-made carpeting and the treatment should
conform to the guidelines set forth in the telex dated February
11, 1987. Those guidelines require that either a hole or section
must be cut from the main body of the article or an indelible ink
stamping shall be made on the outer surface of the article in a
location which is visible when it is in use and the stamping
should be in a contrasting color. The cutting or stamping
prescribed should be near the center of the sample so it cannot
be removed by cutting along an edge. The samples submitted did
not conform to the guidelines with respect to either cutting or
stamping.
The articles in this case, however, are not textiles.
Consequently, the lipstick testers are not subject to the
specific rules concerning textile samples. Applying the terms of
subheading 9811.00.60, HTSUS, to the facts presented in this
case, we agree with counsel that retail lipstick products are not
ordinarily packaged and sold in lipstick cases with a large color
ball as part of the lid and then inserted into a specially
designed display case. We therefore find that the merchandise
that is the subject of this ruling is "otherwise treated" so as
to render it unsuitable for use other than as a sample to solicit
orders. Also, since the display of the numerous colors presented
in the lipstick testers can assist potential customers in
selecting the desired color, we are satisfied that the lipstick
testers will be used as samples for the solicitation of purchase
orders for the lipstick contents, consistent with the purposes of
subheading 9811.00.60, HTSUS.
HOLDING:
Based upon the information presented, we find that the
lipstick testers as described above are entitled to duty-free
treatment as samples under subheading 9811.00.60, HTSUS.
This decision should be mailed by your office to the
internal advice requester no later than 60 days from the date of
this letter. On that date the Office of Regulations and Rulings
will take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Freedom of Information Act
and other public access channels.
Sincerely,
John Durant
Director
Tariff Classification Appeals
Division