CLA-02 RR:CR:SM 562628 EAC
Mr. Steve Homokay
Senior Consultant, Trade & Regulatory Services
PBB Global Logistics
670 Young Street
Tonawanda, New York 14150
RE: Subheading 9801.00.10, HTSUS; Hummer Tool Kit; emergency roadside kits; GRI 3(b); GRI 5(a)
Dear Mr. Homokay:
This is in response to your letter, dated December 10, 2002, requesting a ruling on behalf of Micris One, Inc., pertaining to the proper classification of the Hummer Tool Kit in accordance with the Harmonized Tariff Schedule of the United States, (HTSUS). A sample Hummer Tool Kit has been submitted with this ruling request.
FACTS:
The merchandise at issue is a “Hummer Tool Kit.” The Hummer Tool Kit consists of a Mag-Lite® flashlight, Leatherman® multi-purpose tool with Velcro case and carrying strap, tire pressure gauge, and a zippered nylon case that stores the three items. You state that the flashlight, multi-purpose tool, and tire pressure gauge are products of the United States and that the zippered nylon case is a product of China. The Chinese case contains sponge foam that has been glued to the inner shell of the item. The sponge foam has been cut and formed to a specific shape in order to accommodate specific accessories within individualized locations inside the case.
The four items mentioned above are imported into Canada by Micris One. In Canada, the U.S. accessories are packed into the Chinese cases and prepared for shipment to various purchasers. The Hummer Tool Kits intended for consumers within the United States will be imported primarily through the Port of Buffalo, New York.
ISSUES:
Is the Hummer Tool Kit considered to be a set for classification purposes under General Rule of Interpretation 3(b), HTSUS?
What is the dutiable status of the Chinese case when imported with the U.S. items inside?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States, HTSUS, is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that articles are to be classified by the terms of the headings and relative Section and Chapter Notes. For an article to be classified in a particular heading, the heading must describe the article, and not be excluded therefrom by any legal note. In the event that 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.
There are several items of merchandise at issue, classifiable in various headings. GRI 3 must be considered in the classification of merchandise put up in sets for retail sale. GRI 3(b) provides that:
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.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN (X) to GRI 3(b) sets forth the following criteria for classification as goods put up in sets for retail sale. The merchandise must:
consist of at least two different articles which are,
prima facie, classifiable in different headings.
Therefore, for example, six fondue forks cannot be
regarded as a set within the meaning of this Rule;
consist of products or articles put up 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).
The Hummer Tool Kit “consist[s] of at least two different articles which are, prima facie, classifiable in different headings,” and the kit is “put up in a manner suitable for sale directly to users without repacking.” However, the Hummer Kit does not “consist of products or articles put up together to meet a particular need or carry out a specific activity.” Therefore we are of the opinion that the Hummer Tool Kit is not a set for purposes of classification under the HTSUS.
As an illustration of our analysis, the product at issue may be compared with the exemplar for sets in EN (X). The exemplar for sets in EN (X) falls within the meaning of GRI 3(b) because the items within the sets are related to one another in such a fashion that they interact together to serve a distinct purpose or function to enable a singular result to be achieved. For example, in EN (X)(2) hairdressing sets consisting of a pair of electric hair clippers, a pair of scissors, a brush and a towel, put up in a leather case, are sets within the meaning of 3(b) because all of the items are used in concert to achieve groomed hair. In contrast, the Hummer Tool Kit’s flashlight and multi-purpose tool may be used virtually anywhere and for a multitude of purposes not related to the automobile. However, the tire pressure gauge will be utilized for one purpose: to check the air pressure on the Hummer’s tires. The items do not act in concert to “meet a particular need or carry out a specific activity.”
Furthermore, Customs has consistently held that roadside emergency kits, similar to the product in the instant case, do not fulfill a particular need or specific activity. See HRL 083828, dated June 9, 1989; HRL 950678, dated December 30, 1991; HRL 950332, dated December 30, 1991; HRL 951092, dated February 11, 1992; HRL 951943, dated June 26, 1992; and HRL 964937, dated March 19, 2002.
However, based upon the circumstances of this case, the products at issue may be entitled to duty-free treatment under subheading 9801.00.10, HTSUS, when returned to the United States. Subheading 9801.00.10, HTSUS, provides for the duty-free entry of products of the United States which are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. Articles satisfying the above statutory conditions are entitled to duty-free treatment, assuming compliance with the documentation requirements of section 10.1, Customs Regulations (19 CFR 10.1). While some change in the condition of the product while it is abroad is permissible, operations which either advance the value or improve the condition of the exported product render it ineligible for duty-free entry upon return to the United States. See, Border Brokerage Co. v. United States, 65 Cust.Ct. 50, C.D. 4052, 314 F.Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970).
In the instant case, the operation performed in Canada consists of merely packing the U.S. accessories into the Chinese cases. As the mere packaging of U.S. products into the foreign case does not advance in value or improve in condition the U.S. products, the domestically produced components will be eligible for the duty exemption available under subheading 9801.00.10, HTSUS.
The remaining issue in this case, therefore, concerns the proper classification of the foreign case that holds the U.S. products. Pursuant to GRI 5(a), HTSUS, certain containers may be classified with the articles they are designed to hold. Specifically, GRI 5(a), HTSUS, states:
Camera cases, musical instrument cases, gun cases, drawing
instrument cases, necklace cases and similar containers,
specifically shaped or fitted to contain a specific article or
set of articles, suitable for long-term use and entered with
the articles for which they are intended, shall be classified
with such articles when of a kind normally sold therewith.
This rule does not, however, apply to containers which
give the whole its essential character.
In HRL 963598, dated July 30, 2002, issued to your firm on behalf of Micris One, we held that a nylon bag designed to hold the contents of the Ultimate Auto Safety Kit was not classified pursuant to GRI 5(a), HTSUS, because the bag contained “one main compartment which is not specifically shaped or fitted to hold its contents.” Therefore, the nylon bag was classified separately from its contents pursuant to GRI 1. Similarly, in HRL 964862, dated May 14, 2002, also issued to your firm on behalf of Micris One, we held that a nylon bag which had several internal compartments in which to store various components of an automobile safety kit was not classified pursuant to GRI 5(a). In HRL 964862, we stated:
Although the nylon bag contains multiple compartments
and textile netting on one side of the interior, its compartments
and pockets are not specially shaped or fitted to hold all of its
contents. Thus, the instant bag does not satisfy the requirements
of GRI 5(a). Therefore, it is separately classified from its contents
pursuant to GRI 1.
However, the case under consideration can be distinguished based upon the characteristics of sponge foam which lines the inner shell of the zippered case. The sponge foam material has been specifically shaped and fitted to hold the flashlight, multi-purpose tool, and tire pressure gauge. Because it is fitted for the tools contained therein, it is of a kind that would typically be used for such tools. Further, it is an appropriate size, style and durable material that is typical of portable tool sets kept in an automobile. Thus, the requirements of GRI 5(a) are satisfied and the Hummer Tool Kit, including foreign case, is classified in subheading 9801.00.10, HTSUS.
HOLDING:
Based upon the information and sample submitted, we find that the U.S. origin flashlight, multi-purpose tool, and tire pressure gauge will not be advanced in value or improved in condition by the operations performed abroad. Furthermore pursuant to GRI 5(a), HTSUS, the foreign case may be classified with the products which it was designed to hold. Therefore, the Hummer Tool Kit components and case will be entitled to duty-free treatment under subheading 9801.00.10, HTSUS, when returned to the United States, assuming the documentation requirements of 19 CFR 10.1 are met.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling this transaction.
Sincerely,
Myles B. Harmon
Director,
Commercial Rulings Division