CLA-2 CO:R:C:T 951408 HP
Mr. David M. Murphy
Grunfeld, Desiderio, Lebowitz & Silverman
12 East 49TH Street
New York, NY 10017
RE: NYRL 870787 modified. Packing; shipping; cases; boxes;
crates; decorative; furniture; furnishing; principal; use;
fugitive; marketing; cassette
Dear Mr. Murphy:
This is in reply to your letter of March 24, 1992. That
letter concerned the tariff classification, under the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA), of
wooden cassette toys, produced in numerous countries. Please
note your reference 92-3088-5(1)I, Great American Audio
Corporation (GAAC).
FACTS:
The merchandise at issue is described by you as follows:
... four cassette tapes containing recordings
for the amusement of a baby or young child
and a wood figure [(in various shapes)] which
acts as a holder for the tapes. The wood
figures resemble a rocking horse, reindeer,
elephant, toy cars and trucks, sleighs,
cradles, and Noah's Ark. The cassette tapes
are secured to the wooden holder via a paper
band. The tapes and holder are packaged for
retail sale in a cardboard display container.
[The wooden holders measure approximately 7«"
long x 3¬" wide. The wooden holders have a
2 " x 4¬" opening at the top where the
cassettes are inserted.]
Presently, GAAC sells the following
versions: Jingle Bells, Traveling Fun,
Jungle Book, Lullaby Cradle, Truckload
of Fun, Sweet Dreams, Noah's Ark, Sing-
A-Long Train, Lullaby and Good Night,
Rock-A-Bye Baby, Merry Christmas Sled,
and The Little Yellow Learning Bus. A
sample of the Rock-A-Bye Baby wood cassette
toy accompanies this submission for your
reference.
The wooden cassette holder will be
produced in the Philippines, Thailand, China,
Hong Kong or Malaysia from materials from
those countries. The cassettes will be
produced in the United States, China or Hong
Kong. The final retail package will be
assembled in the United States, China or Hong
Kong.
On February 26, 1992, [sic.] the New
York Region issued [NYRL 870787, classifying]
the wood cassette holders under HTS heading
4415.10.9000, which provides for other cases,
boxes, crates, drums and similar packings of
wood. * * * Customs separately classified
the tapes under HTS heading 8524.21.3040,
which provides for magnetic tapes of a width
not exceeding 4 millimeters[,] other
recordings.
You disagree with NYRL 870787's classification of the wooden
cassette holder, believing it should be placed under subheading
4420.90.8000, HTSUSA, as other wooden articles of furniture.
ISSUE:
Whether the wooden cassette holder is considered a
decorative article or a packing box under the HTSUSA?
LAW AND ANALYSIS:
Heading 4415, HTSUSA, provides for, inter alia, packing
cases, boxes, crates, drums and similar packings of wood. The
Explanatory Notes (EN) to the HTSUSA constitute the official
interpretation of the tariff at the international level. While
not legally binding, they do represent the considered views of
classification experts of the Harmonized System Committee. It
has therefore been the practice of the Customs Service to follow,
whenever possible, the terms of the Explanatory Notes when
interpreting the HTSUSA. The EN to this heading states:
This part of the heading includes:
(1) Packing cases and boxes with solid
sides, lids and bottoms, used for
general packing and transport purposes.
(2) Crates, fruit or vegetable boxes, egg
trays and other containers with slatted
sides and open tops (including those of
a kind used for the transport of
glassware, ceramic products, machinery,
etc.).
(3) Boxes made of sliced or peeled wood (but
not those of plaited wood) of a kind
used for packing cheese, pharmaceutical
products, etc.; match-boxes (including
those with a striking surface) and
conical open containers for marketing
butter, fruit, etc.
(4) Drums and barrel-shaped containers, not
of the kind made by coppers, such as are
used for the transport of dry colours,
chemicals, etc.
These containers may be presented without a
lid ( open containers such as cases, crates,
etc.). They may be unassembled or partly
assembled....
You have argued that the items enumerated in this heading
are commercial packings such as fruit or vegetable boxes of a
type used for general packing and transport purposes ...[and]
designed to be the outermost shipping containers for other
merchandise. Your merchandise, while it does hold cassettes,
is primarily intended as a decorative holder
to appeal to consumers and amuse children.
The cassette holders themselves must be
packed in cardboard containers prior to
retail sale and are clearly not designed to
function as shipping crates.
NYRL 870787 based its conclusion upon the premise that while
some packing cases of heading 4415, HTSUSA, may be manufactured
with decorative shapes and designs intended to attract consumer
attention for marketing purposes, the examples enumerated in the
Explanatory Notes are all used to pack and often market
merchandise. This is correct. Extending this analysis to the
merchandise at issue, however, improperly broadens the intended
scope of this heading. As evidenced by the language general
packing and transport, packing cases, boxes and crates of this
heading are industrial or commercial packing crates and
containers designed to be principally shipping and marketing
containers for other merchandise. The cassette holders,
themselves packed in cardboard holders prior to retail sale, are
neither intended to be nor are principally used as packing and
marketing crates. The cassette holders are also used throughout
the life of the cassettes as decorative storage containers.
While the decorative function is clearly secondary, it is not
fugitive. NYRL 870787's classification of these multi-purpose
containers as general packing and transport, packing cases,
boxes and crates was therefore incorrect.
As an alternative to heading 4415, HTSUSA, you have
suggested that classification as small wooden articles of
furniture, under heading 4420, would be appropriate. See, e.g.,
NYRL 863185 of May 21, 1991 (classifying cassette, video and
compact disc storage racks, also presented to consumers wrapped
in cardboard, as other articles of wooden furniture). We agree.
The instant merchandise is clearly intended to be displayed on
other furniture. Neither the article's design nor its retail
sale accompanied by the cassettes to be stored distinguishes it's
cassette storage function from that of the above-cited racks.
Therefore, classification in heading 4420, HTSUSA, is correct.
HOLDING:
As a result of the foregoing, the instant merchandise is
classified under subheading 4420.90.8000, HTSUSA, as wood
marquetry and inlaid wood; caskets and cases for jewelry or
cutlery and similar articles, of wood; statuettes and other
ornaments, of wood; wooden articles of furniture not falling
within chapter 94, other, other. Pursuant to 502(a)(3) of the
Trade Act of 1974 (19 U.S.C. 2462(a)(3)) and General Note
3(c)(ii)(A), HTSUSA, one or more of the countries you cited above
has been designated a beneficiary developing country for the
purposes of the Generalized System of Preferences (GSP), provided
for in Title V of the Trade Act of 1974, as amended (19 U.S.C.
2461 et seq.). Provided all applicable requirements are met
under the GSP program, this merchandise may be entered free of
duty. Otherwise, the applicable rate of duty is 5.1 percent ad
valorem.
In order to insure uniformity in Customs classification of
this merchandise and eliminate uncertainty, we are modifying NYRL
870787 of February 20, 1992, pursuant to 19 C.F.R. 177.9(d)(1)
(1989), to reflect the above classification effective with the
date of this letter. This letter is not to be applied
retroactively to NYRL 870787 (19 C.F.R. 177.9(d)(2) (1989)) and
will not, therefore, affect the transaction for the importation
of your merchandise under that ruling. However, for the purposes
of future transactions in merchandise of this type, including
that for which the present classification is requested, NYRL
870787 will not be valid precedent. We recognize that pending
transactions may be adversely affected by this modification, in
that current contracts for importations arriving at a port
subsequent to the release of HRL 951408 will be classified under
the new ruling. If such a situation arises, you may, at your
discretion, notify this office and apply for relief from the
binding effects of the new ruling as may be dictated by the
circumstances. However, please be advised that in some instances
involving import restraints, such relief may require separate
approvals from other government agencies.
Sincerely,
John Durant, Director
Commercial Rulings Division