CLA-2 CO:R:C:T 957674 SK
TARIFF NO.'s: 4202.92.4500; 9005.10.0040
Port Director
U.S. Customs Service
700 Doug Davis Drive
Atlanta, Georgia 30354
RE: Decision on Application for Further Review of Protest No. 1704-94-100455; classification of binoculars and textile, soft-sided "fanny bag"; fanny pack; GRI 3(b); EN IX to GRI 3(b); fanny bag and binoculars are normally offered for sale separately; not composite goods and classifiable separately; 9005, HTSUS; 4202 HTSUS; HRL 957246 (3/29/95); HRL 086839 (7/6/90) affirmed by HRL 087870 (2/13/91).
Dear Sir:
This is a decision on application for further review of a protest timely filed by Jeremy R. Page of Sandler, Travis & Rosenberg, P.A., on behalf of his client, Simmons Outdoor Corporation, on December 6, 1994, against your decision regarding the classification of a "fanny pack" imported with a pair of binoculars. The subject merchandise was entered at the port of Atlanta on March 4, 1994. The goods were liquidated on October 7, 1994.
This office received a supplementary submission from counsel for the protestant dated October 20, 1995.
FACTS:
The merchandise at issue is referenced style number 64149R. This office is in receipt of a sample identified as style number 64149; the importer submits that the only difference between style 64149R and 64149 is that the "R" model does not have the Simmons logo on the fanny pack.
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Style 64149R consists of a pair of 7 x 25 power binoculars and a soft-sided, plastic-coated case which measures approximately 5 inches by 4 inches by 2 inches and closes by means of a zipper which extends across three sides of the top of the article. The case, also known commercially as a "fanny pack," a "fanny bag" or a "waist pack," is designed to be worn around the waist and is held in place by adjustable, braided textile straps which snap together by means of plastic buckles.
Protestant seeks classification of style 64149R under subheading 9005.10.0040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for binoculars and accords goods classifiable therein duty free entry. Protestant submits that the binoculars and fanny pack are composite goods as within the meaning of General Rule of Interpretation (GRI) 3(b), and therefore the two articles are classifiable as an entirety under heading 9005, HTSUS, as the binoculars are the component which impart the essential character to the good.
At liquidation, Customs rejected protestant's entry of style 64149R as a composite good and separately classified the binoculars under subheading 9005.10.0040, HTSUS, and the fanny pack under subheading 4202.92.4500, HTSUS, which provides for, in pertinent part, travel, sport and similar bags, with outer surface of sheeting of plastic.
ISSUE:
Is style 64149R a composite good classifiable under heading 9005, HTSUS, or are the binoculars and the fanny pack separately classifiable under headings 9005 and 4202, HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is governed by the GRI's. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes, taken in order. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's.
As described supra, style 64149R is comprised of a pair of binoculars and a fanny pack. Fanny packs are usually square or rectangular shaped bags that have zipper closures, straps that encircle the wearer's waist, and are used in the manner of
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sports, travel and similar bags. Two headings potentially govern classification of the subject merchandise: heading 9005, HTSUS, which provides for "[B]inoculars,
monoculars, other optical telescopes, and mountings therefor... ," and heading 4202, HTSUS, which provides for, in pertinent part, travel, sports and similar bags.
As style 64149R is potentially classifiable under headings 9005 and 4202, HTSUS, GRI 3 provides the relevant analysis. GRI 3(a) states that when goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
"(a) The heading which provides the most specific description
shall be preferred to headings providing a more general
description. However, when two or more headings each refer
to part only of the materials or substances contained in mixed
or composite goods or to part only of the items in a set put up
for retail sale, those headings are to be regarded as equally
specific in relation to those goods, even if one of them gives a
more complete or precise description of the goods.
In this instance, headings 9005 and 4202, HTSUS, are equally specific in relation to one another. As we cannot classify these goods pursuant to GRI 3(a), we turn to GRI 3(b) which reads:
.
(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.
Before applying GRI 3(b), we must determine if the subject garments are composite goods.
COMPOSITE GOODS
Explanatory Note (EN) IX to GRI 3(b) provides:
"For purposes of this Rule, composite goods made up of
different components shall be taken to mean not only
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those in which the components are attached to each
other to form a practically inseparable whole but also
those with separable components, provided these
components are adapted one to the other and are
mutually complementary and that together they form
a whole which would not normally be offered for sale
in separate parts."
EN IX to GRI 3(b) also sets forth two examples of articles regarded as composite goods:
1) Ashtrays consisting of a stand incorporating a removable
ash bowl;
2) Household spice racks consisting of a specially designed
frame (usually of wood) and an appropriate number of empty
spice jars of suitable shape and size.
The EN to GRI 3(b) include as composite goods components which are attached to one another so as to form a whole, as well as those components which are separable so long as they are "mutually complementary," "form a whole" and would "not normally be offered for sale in separate parts." In determining whether the subject articles meet the definition of "composite good," we will apply the criteria set forth supra to the binoculars and fanny pack at issue.
It is obvious that the subject articles are not attached to one another. This fact is not determinative of the articles' status as composite goods and Customs must further examine the merchandise to determine whether the articles are "mutually complementary," "form a whole" and whether the goods would "not normally be offered for sale in separate parts."
With regard to the first criterion, this office has not been presented with substantiating evidence that the subject binoculars and fanny pack are mutually complementary. The fanny pack is not specially shaped or fitted to accommodate the binoculars. It is of a dimension similar to other fanny packs and has the capacity to hold the sort of items typically stored or transported by fanny packs (i.e., keys, compacts, wallet or billfolds, pens, etc.). Protestant states that the binoculars and fanny pack are mutually complementary to each other "based on the fact that they
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are intended to be used as a whole." We do not agree. While these articles may be used together, each article functions independently of the other. The function of the fanny pack as it relates to the binoculars is very different from the exemplars of
composite goods set forth in the EN to GRI 3(b). The exemplars describe items that have no real function independent of one another. In the instant case, the binoculars and fanny pack may be used together, but they also have independent functions and are normally offered to the consumer separately.
Protestant attaches significance to the fact that both binoculars and fanny pack may bear the "Simmons" logo. (We note that style 64149R does not have the "Simmons" logo printed on its fanny pack. Customs contacted the importer on this issue and this office was told that some of the fanny packs are unmarked so that they may be specially labeled with the names of other companies for personalized corporate gifts and the like.) Even if all the fanny packs at issue were to have the "Simmons" logo printed on them, this office does not believe that this fact would render these articles composite goods as within the meaning of GRI 3(b). The "Simmons" logo in this instance merely serves to identify a corporate entity; matching logos on the binoculars and fanny pack do not render the articles mutually complementary in function to one another, nor do they make it any less reasonable for these articles to be sold separately from one another.
Protestant has provided this office with a letter from the manufacturer stating that these fanny packs are sold only to optical companies. Protestant submits that the binoculars at issue would not normally be sold without the fanny packs. We direct your attention to Headquarters Ruling Letter 957246, dated March 29, 1995, in which Customs noted that:
"the phrase ‘would not normally be sold in separate parts'
does not refer to how the components are actually marketed.
Rather, it pertains to whether the components would
normally or principally be sold independently of one another."
Therefore, the real issue is not whether Simmons Outdoor Corporation sells these binoculars with the fanny packs, but whether binoculars and fanny packs are normally sold together or separately. This office is in possession of several catalogues which depict "Camera Bags and Fanny Bags" being offered for sale to the consumer separately from the items they are intended to hold. A visit to several local sporting goods stores and retail shops reveals that fanny packs are typically offered for sale
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alone. We find this persuasive evidence of the fact that binoculars and fanny packs are normally sold separately and, on this basis, Customs does not consider the subject merchandise to constitute a composite good for classification purposes.
Protestant's supplementary submission to this office states that "Customs' perception that binoculars are not ‘normally ‘ sold together with carrying cases is erroneous." This is a misinterpretation of our position. This office is not stating that binoculars are not sold with carrying cases; visits to retail outlets indicate that binoculars are sold both with and without cases. Customs recognizes that certain cases, such as rigid, molded cases, will not "normally" be offered for sale separately from the binoculars they are designed to hold. It is readily apparent that such cases have no viable use other than to store, protect and transport a pair of binoculars. The fanny pack at issue, however, presents a very different situation. As stated above, fanny packs have an independent market identity, they are capable of functioning in a capacity quite separate from being used with binoculars, they do not serve to complement or complete the binoculars and, most importantly, fanny packs are normally offered for sale separately from binoculars. This is the determinative criteria in the instant case.
Protestant cites HRL 086839, dated July 6, 1990, affirmed by HRL 087870, dated February 13, 1991, in support of the contention that the subject articles are composite goods. Although HRL 086839 appears similar to the merchandise currently under review, there are significant factors which distinguish the analysis and holding in that ruling from the instant case. In HRL 086839, Customs determined that speculars, a textile cord and a carrying case comprised a composite good and classification of all three articles fell under heading 9005, HTSUS. The carrying case at issue in that ruling was made from a cellular plastic sheeting material. It featured a zipper top, a front storage pocket, a self material swagger handle and belt loops so that it could be worn on the wearer's belt. Although Customs no longer possesses the actual sample, the file to HRL 086839 contains a photocopy of the subject articles. The distinguishing feature between the carrying case in HRL 086839 and the fanny pack currently at issue is that the carrying case was essentially a small, non-descript case that is not the type of bag to be sold separately from its contents. In contrast, the fanny pack is an extremely popular type of carrying case that is normally sold by itself, as described supra. This distinction controls whether Customs is to deem components composite goods or not. To simply state that as the HRL 086839 article and the fanny pack at issue are both forms of carrying cases, and therefore entitled to identical treatment, is erroneous. The two articles are very different in design, function and, most importantly, they are normally sold in different manners.
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Lastly, you submit that the subject merchandise may be considered "goods put up in sets for retail sale." EN X to GRI 3(b) provides, in part:
"For 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 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."
The binoculars and the fanny pack are not classified as a set because in accordance with GRI 3 because goods put up in sets for retail sale are goods that consist of products or articles put up together to meet a particular need or carry out a particular activity. The fanny pack does not combine with the binoculars to accomplish a single activity: the binoculars are used to improve vision; that use, improving vision, is not enhanced by the fanny pack.
Style 64149R is neither classifiable as a composite good nor a set in accordance with GRI 3. Binoculars and fanny packs are normally sold separately and they do not serve to carry out a single activity. Accordingly, the components are to be classified separately. The binoculars are classifiable under subheading 9005.10.0040, HTSUS, which provides for binoculars. The fanny pack is classifiable under subheading 4202.92.4500, HTSUS, which provides for travel, sport and similar bags, with outer surface of sheeting of plastic.
HOLDING:
The binocular component of style 64149R is classifiable under subheading 9005.10.0040, HTSUS, which provides for other prism binoculars. Goods classifiable under this subheading are currently afforded duty free entry.
The fanny pack component of style 64149R is classifiable under subheading 4202.92.4500, HTSUS, which provides for travel, sport and similar bags, with outer surface of sheeting of plastic, dutiable at a rate of 20 percent ad valorem.
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As the rate of duty under the classification indicated above is the same as the rate of duty under which the subject entry was liquidated, you are instructed to deny the protest in full.
A copy of this decision should be attached to the Form 19 and provided to the protestant as part of the notice of action on the protest. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to the mailing of the decision.
Sixty days from the date of this decision, 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 to the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division