CLA-2 CO:R:C:M 956347 KCC
David M. Murphy, Esq.
Grunfeld, Desiderio, Lebowitz & Silverman
245 Park Avenue
New York, New York 10167-0002
RE: Decorative crystal candle holders; candle; gift box; EN
94.05; candlestick; candleholder; candlestick holder; HRL
953016, 088742 and 089054; GRI 3(b); set; essential
character; EN Rule 3(b); 3406.00.00; GRI 5(b); packing
material; GSP; 19 U.S. C. 2463(b); BDC; eligible article;
product of; T.D. 91-7; Madison Galleries, LTD. v. United
States
Dear Mr. Murphy:
This is in regards to your letter dated April 29, 1994, on
behalf of Crystal Clear Industries, Inc., concerning the
applicability of the Generalized System of Preferences (GSP) and
tariff classification of decorative crystal candle holders under
the Harmonized Tariff Schedule of the United States (HTSUS). A
sample of the candle holder and several printed gift boxes were
submitted for our examination.
FACTS:
The articles under consideration are globe-shaped crystal
candle holders (glass candle holders). A decorative pattern is
cut in the glass which is designed to enhance the patterns
created by the flickering candle. You state that the glass
candle holder is produced in Poland. The submitted sample, style
# 415143-GB, is 3 inches tall, labeled "Essex Votive, Handcut 24%
Full Lead Crystal", and is valued at $2.60. It is representative
of similar items imported by Crystal Clear. The glass candle
holders may be imported in other sizes and with different
decorative patterns cut in the glass. The glass candle holders
are not used for devotional purposes.
Your information indicates that the glass candle holders may
be imported packaged in a cardboard gift box without a candle.
The gift boxes, valued at $0.51, are products of Italy. However,
some of the candles may be packaged in plain brown boxes from
Poland. Additionally, a Taiwanese candle, valued at $0.09, may
be added to the glass candle holders before importation into the
U.S.
In the U.S., a majority of the glass candle holders will be
repackaged into a gift box with a brass stand and a candle. A
sample gift box with a representative photograph of the candle
holder, candle and brass stand was submitted.
ISSUE:
I. Is the glass candle holder with and without candles packaged
in a gift box or brown box classified as non-electrical lamps and
lighting fittings under subheading 9405.50.40, HTSUS?
II. Does the glass candle holder with candle qualify for
preferential tariff treatment under the GSP?
LAW AND ANALYSIS:
I. Tariff Classification
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1,
HTSUS, states, in part, that "for legal purposes, classification
shall be determined according to terms of the headings and any
relative section or chapter notes...."
Subheading 9405.50.40, HTSUS, provides for:
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...Non-electrical
lamps and lighting fittings...Other...Other.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System (HCDCS) Explanatory Notes
(ENs) may be consulted. The ENs, although not dispositive,
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. 89-90, 54 Fed. Reg. 35127, 35128
(August 23, 1989). EN 94.05 (pg. 1581), states that lamps and
light fittings of this group can be composed of any material and
use any source of light, including candles. In addition, EN
94.05(I)(6) states that this heading covers "...in particular
candelabra, candlesticks, and candle brackets."
We are of the opinion that the terms "candlestick",
"candlestick holder", and "candleholder" are interchangeable.
Candleholder has been defined as a candlestick, Webster's II New
Riverside University Dictionary, pg. 224 (1st ed. 1984), and as a
holder for a candle; candlestick, The Random House Dictionary of
the English Language, pg. 216 (1st Ed. 1983). Candlestick has
been defined as a utensil for supporting a candle, whether
elaborately made or in the common form of a saucer with a socket
in the center, Webster's New International Dictionary , pg. 390
(2d ed. 1939). Reference to lexicographic authorities is proper
when determining the meaning of a tariff term. Hasbro
Industries, Inc. v. United States, 703 F. Supp. 941 (CIT 1988),
aff'd, 879 F.2d 838 (1989); C.J. Tower & Sons of Buffalo, Inc. v.
United States, 69 CCPA 128, 673 F.2d 1268 (1982).
We have previously held that empty glass candle holders are
classified under subheading 9405.50.40, HTSUS, as non-electrical
lamps and lamp fittings. See, HRL 953016 dated April 27, 1993,
HRL 088742 dated April 22, 1991, and HRL 089054 dated August 2,
1991, which classified glass candle holders as non-electrical
lamps and light fittings under subheading 9405.50.40, HTSUS,
pursuant to EN 94.05.
Based on the above definitions and rulings, we find that the
glass candle holders without candles are, in fact, candlesticks
as the term is used in the ENs. The articles at issue are a
utensil used for supporting a candle. Therefore, the glass
candle holders are properly classified under subheading
9405.50.40, HTSUS, as non-electrical lamps and light fittings.
The glass candle holder with accompanying candles are
classified under two different tariff provisions. The glass
candle holder is classified under heading 9405, HTSUS, and the
candle is classified under heading 3406, HTSUS. When, by
application of GRI 2, HTSUS, goods are prima facie classifiable
under two or more headings, GRI 3, HTSUS, is applicable. In this
case, classification is determined by application of GRI 3(b),
HTSUS, which provides:
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.
To determine what is a "set put up for retail sale", EN Rule
3(b)(X) (pg. 4), provides a three-part test for "goods put up in
sets for retail sale":
For the purposes of this Rule, 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 facia, 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 repackaging (e.g., in boxes or cases or
on boards).
As stated previously, the candle holder and candle are
classified under different headings. When combined the
components are put up together to meet a particular need or carry
out a specific activity; to provide decorative illumination.
However, based on the submitted information, it is unclear as to
how the candle holder and candle will be packaged. If the
articles are packaged together for sale directly to the consumer
in either the gift box or brown box without repackaging with the
brass stand, they meet the qualifications of a set. However, if
the candle holder and candle will be repackaged in the U.S. with
the metal stand, they do not meet the qualifications of a set.
Therefore, the candle holder and candle which will not be
repackaged with the brass stand are a set for tariff purposes.
To determine the proper classification, the essential character
of the set needs to be determined.
In general, essential character has been construed to mean
the attribute which strongly marks or serves to distinguish what
an article is; that which is indispensable to the structure, core
or condition of the article. In addition, EN Rule 3(b) (pg. 4),
provides further factors which help determine the essential
character of goods. Factors such as bulk, quantity, weight or
value, or the role of a constituent material in relation to the
use of the goods are to be utilized, though the importance of
certain factors will vary between different kinds of goods.
We are of the opinion that the essential character of the
set is imparted by the glass candle holder. The glass candle
holder is the central piece and the focus of the set. It is the
component which attracts the consumer and is, actually, the
component which the consumer is purchasing. The glass candle
holder is valued much higher ($2.60) than the candle ($0.09).
The candle when burned will eventually disappear and the consumer
will purchase a replacement. Therefore, the glass candle holder
and candle set is classified under subheading 9405.50.40, HTSUS.
Classification of the candleholder and candle which is not a
set is different from the above set classification. The candle
holder and candle must be classified separately under their
respective headings. EN 94.05, states that heading 9405, HTSUS,
does not include candles of heading 3406, HTSUS. Therefore, the
candle holder will be classified under subheading 9405.50.40,
HTSUS, and the candle will be classified under subheading
3406.00.00, HTSUS, which provides for "Candles, tapers and the
like."
We note that GRI 5(b), states that "[i]n addition to the
foregoing provision, the following rules shall apply in respect
of the goods referred to therein:...
Subject to the provision of rule 5(a) above, packing
materials and packing containers entered with the goods
therein shall be classified with the goods if they are of a
kind normally used for packing such goods. However, this
provision is not binding when such packing materials or
packing containers are clearly suitable for repetitive use.
Based upon an examination of the submitted gift box sample
and a description of the brown box, we are of the opinion that
the boxes are packing materials which are to be classified with
the entered goods. The boxes are of the type in which a consumer
normally finds glass articles packaged and are clearly not
designed for repetitive use. Therefore, the boxes are classified
with the glass candle holders under subheading 9405.50.40, HTSUS.
II. Generalized System of Preferences
Under the GSP, eligible articles the growth, product or
manufacture of a beneficiary developing country (BDC) which are
imported directly into the customs territory of the U.S. from a
BDC may receive duty-free treatment if the sum of 1) the cost or
value of materials produced in the BDC, plus 2) the direct costs
of the processing operation in the BDC, is equivalent to at least
35% of the appraised value of the article at the time of entry.
See, 19 U.S.C. 2463(b).
The candle holder and candle set in this case is an
"eligible article" for purposes of the GSP since the tariff
provision under which the set is classified provides for a GSP
free rate of duty.
Section 503(b) of the Trade Act of 1974 (19 U.S.C. 2463(b)),
amended by the "Customs and Trade Act of 1990" (Public Law 101-382), effective August 20, 1990, now reads as follows:
(b)(1) The duty-free treatment provided under section 501
shall apply to any eligible article which is the growth,
product or manufacture of a BDC.
The "product of" requirement means that to receive duty-free
treatment the article must be wholly the growth, product, or
manufacture of the BDC, or must be a new or different article of
commerce which has been grown, produced or manufactured in the
BDC. See, Madison Galleries, LTD. v. United States, 688 F. Supp.
1544, (CIT 1988), affirmed, 870 F.2d 627 (Fed. Cir. 1989).
In regards to the instant case, you state that the candle
holder is produced in Poland (a BDC) and that the candle is
produced in Taiwan (a non-BDC). Because the mere packaging of
the candle with the candle holder in Poland will not result in
the substantial transformation of the candle into a "product of"
Poland, the entire imported set would not be considered the
"product of" Poland. See, T.D. 91-7, 25 Cust. Bull. 7 (1991).
Therefore, the candle holder and candle set will not be entitled
to GSP treatment.
HOLDING:
The glass candle holders imported without candles packaged
in gift or brown boxes, and the glass candle holder and candle
sets are classified under subheading 9405.50.40, HTSUS, as non-electrical lamps and lighting fittings.
The glass candle holders and candles which do not qualify as
sets are classified separately under subheading 9405.50.40,
HTSUS, as non-electrical lamps and lighting fittings, and under
subheading 3406.00.00, HTSUS, as candles.
The glass candle holder and candle sets are not entitled to
GSP treatment.
Sincerely,
John Durant, Director
Commercial Rulings Division