CLA-2 RR:TC:MM 958215 RFA
Port Director of Customs
Hemisphere Center
Routes 1 & 9 South
Room: 200
Newark, NJ 07114
RE: Protest 1001-95-105046; Ball Point Pens; Pen Parts;
Unfinished and Unassembled Goods; Bulk Shipments; Packaged
Separately for Convenience; GRI 2(a); HQs 081999, 950118,
950320, 951511, 952850, 953047, 953313, 957790
Dear Port Director:
The following is our decision regarding Protest 1001-95-105046, which concerns the classification of ball point pen parts
under the Harmonized Tariff Schedule of the United States
(HTSUS). In addition to arguments presented with the original
protest, consideration has also been given to written
supplemental submissions and a meeting with counsel.
FACTS:
The subject merchandise consists of four piece units
comprised of: a plastic clipped cap; a plastic barrel; a metal
band; and, a plastic follower/plug. When the four pieces are
assembled together, they form an unfinished ball point pen (85%
of the total value of the finished pen) missing only a standard
ink cartridge and small spring. There are equal quantities of
each component imported, which when assembled, could account for
a finite number of unfinished ball point pens. After
importation, the four pieces could be assembled with domestically
produced ink cartridge and a spring. The protestant states that
each component is packed with other components of the same type
in a plastic bag for convenience. The invoice lists 60,000
sets. The packing list describes the merchandise as follows:
Marks & Nos. Q'ty (PC) Description
40-47 @ 7,000 Cap (Black, White, Blue,
56,000 Wine Color)
48-59 @ 5,000 Barrel (Black, White,
Blue,
60,000 Wine Color
60 50,000 Plug
61 10,000 Plug
4,000 Cap (Assort)
60,000 Ring (Gold Color)
The merchandise was entered on September 15, 1994, under
subheading 9608.10.00, HTSUS, as unassembled and unfinished ball
point pens. The entry was liquidated on March 24, 1995, under
subheading 9608.99.40, HTSUS, as ball point pen parts. The
protest was timely filed on June 8, 1995.
The 1994 subheadings under consideration are as follows:
9608: Ball point pens; felt tipped and other
porous-tipped pens and markers; fountain pens,
stylo-graph pens and other pens; duplicating
styli; propelling or sliding pencils (for example,
mechanical pencils); pen- holders, pencil-holders
and similar holders; parts (including caps and
clips) of the foregoing articles, other than those
of heading 9609:
9608.10.00: Ball point pens. . . .
Goods classifiable under this provision have a column
one, general rate of duty of 0.8 cents each plus 5.4
percent ad valorem.
9608.99.40: Other: [o]ther: [o]ther: [p]arts of articles
provided for in subheadings 9608.10, 9608.31
and 9608.39 (other than balls for ball point
pens). . . .
Goods classifiable under this provision have a column
one, general rate of duty of 0.9 cents each plus 6.1
percent ad valorem.
ISSUE:
Whether the components are classifiable individually as ball
point pen parts, or, under GRI 2(a), are the components
unfinished and unassembled ball point pens (packaged separately
for convenience), under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's). GRI
1 provides that classification shall be determined according to
the terms of the headings and any relative section or chapter
notes.
The port claims that because the ball point pen parts are
imported in separate bags containing the same type of components,
that they are shipped for the convenience of manufacturing and
are therefore not "unassembled". The protestant claims that the
merchandise is classifiable as unfinished and unassembled ball
point pens based upon the application of GRI 2(a) which provides
that "any reference in a heading to an article shall be taken to
include a reference to that article incomplete or unfinished,
provided that, as presented, the incomplete or unfinished article
has the essential character of the complete or finished article."
. The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) constitute the official interpretation of
the HTSUS. While not legally binding nor dispositive, the ENs
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. 89-80, 54 FR 35127, 35128 (August 23,
1989). ENs to GRI 2(a), state in pertinent part:
(I) The first part of Rule 2 (a) extends the scope of
any heading which refers to a particular article to
cover not only the complete article but also that
article incomplete or unfinished, provided that, as
presented, it has the essential character of the
complete or finished article.
* * * * *
(V) The second part of Rule 2 (a) provides that
complete or finished articles presented unassembled or
disassembled are to be classified in the same heading
as the assembled article. When goods are so presented,
it is usually for reasons such as requirements or
convenience of packing, handling or transport.
(VI) This Rule also applies to incomplete or unfinished
articles presented unassembled or disassembled provided
that they are to be treated as complete or finished
articles by virtue of the first part of this Rule.
Protestant states that an unfinished or incomplete article
must be classified under the eo nomine provision, when such
article has the essential character of the complete or finished
article. In support of this position, protestant cites to
several rulings dealing with unfinished kits or unfinished
merchandise. In HQ 950118, dated December 10, 1991, Customs
determined that a partially assembled passenger railway car,
containing 49.72% of the constituent parts, was classifiable as a
unfinished railway car based upon the application of GRI 2(a).
The protestant believes that like the unfinished railway cars,
the subject pen components are processed to the point that they
are clearly dedicated for the ultimate and exclusive use as pens
and are provided for eo nomine as ball point pens. However, this
ruling was modified in HQ 957790, dated May 30, 1995, because
upon re-examination, Customs realized that HQ 950118 placed undue
reliance on legal principles developed under the predecessor
tariff code to the HTSUS. After further analysis, Customs
concluded that the railway cars did not have the essential
character of a complete or finished railcars and classified them
as parts. See HQ 957790.
Protestant believes that Customs has mistakenly inferred
that unassembled parts packaged in bulk are not "unassembled" for
purposes of GRI 2(a) based upon HQ 081999, dated December 10,
1990. In HQ 081999, Customs determined whether unassembled golf
car components packaged separately in bulk and entered for
assembly in the United States were classified as unassembled
goods pursuant to GRI 2(a). Customs held that because the goods
were packaged in bulk for an assembly operation, they could not
be classified as unassembled goods imported as "kits". Customs
further held that the components were classified separately under
the appropriate headings of the HTSUS. Protestant states that
this interpretation is incorrect, citing HQ 951511, dated June 1,
1992. In HQ 951511, Customs determined that motor vehicle wiring
harnesses imported with the lamps packaged separately, were
classified based upon GRI 2(a) under heading 8512, HTSUS, as
unassembled electrical lighting or signaling equipment used for
motor vehicles. In that ruling, Customs further stated that
unassembled goods do not have to be imported in "kit" form.
However, in HQ 953313, dated May 10, 1993, Customs also stated
the following:
A question has arisen regarding the interpretation
of HQ 951511, dated June 1, 1992, regarding the
classification of unassembled articles imported in
different containers. However, HQ 951511 still
requires that the articles to be considered together as
an unassembled good are entered in the same
importation. Therefore, they do not have to be in the same container, box, crate, kit, etc., but only in the
same importation. Furthermore, Customs has consistently
held that bulk shipments of inventory are not to be
considered unassembled goods, even if it would be
possible to assemble them together into one or more
articles.
We note that Customs has dealt with the classification of
ball point pen components in HQ 950320 issued on May 4, 1992, and
in HQ 952850 issued on April 14, 1993. HQ 950320 dealt with the
classification issue of barrels, caps, and ink cartridges for
ball point pens which, subsequent to importation, are assembled
with similar components from the same shipment, other shipments
or parts of domestic origin. Customs concluded that because the components were bulk
shipments destined for inventory to supply the domestic assembly
line, they could not be classified as ball point pens under GRI
2(a).
In HQ 952850, Customs determined the classification of seven
individually imported plastic parts of ball point pens available
in various color combinations drawn from nine different colors.
Even though the importer intended to convert all pens parts of a
particular shipment into complete pens, some color combinations
were created from other shipments causing intermingling of parts
from separate shipments. Customs determined that a main reason
the goods were entered unassembled was not for requirements or
convenience of packing, handling, or transport, but because all
the parts required for the assembled pens may not be included in
the same shipment. Customs concluded that these parts were
considered bulk inventory and classified the parts separately on
the basis of GRI 1. In each situation, Customs has examined the
number of parts which make-up a completed good versus the number
of unmatched parts, how the merchandise was treated after
importation (e.g., put into bins for later use in manufacturing,
commingling with earlier shipments or domestic products), and how
it was presented (e.g., convenience of packing).
Protestant asserts that no components are used for inventory
purposes and that all the components can be assembled into
completed pens of solid colors. However, according to the
packing information, the pen components were packaged so that
each component is packed with other components of the same type,
but different colors in plastic bags. The shipment also
contained a package of 4,000 caps listed as assorted colors.
While there may be an equal number of caps and barrels, the
invoice and packing list do not clearly indicate that there are
an equal number of caps and barrels of the same color. Customs
will not assume facts that are not in evidence. We conclude that
the subject components are imported in bulk for inventory and/or
manufacturing purposes, not for reasons such as requirements or
convenience of packing, handling or transport. Therefore, the
pen components are classifiable under subheading 9608.99.40,
HTSUS, as ball point pen parts.
HOLDING:
The plastic pen components are classifiable under subheading
9608.99.40, HTSUS, as parts of ball point pens.
The protest should be DENIED. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4,
1993, Subject: Revised Protest Directive, this decision, together
with the Customs Form 19, should be mailed by your office to the
protestant, through counsel, no later than 60 days from the date
of this letter. Any reliquidation of the entry in accordance
with the decision must be accomplished prior to mailing of the
decision. Sixty days from the date of the 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 the
public via the Diskette Subscription Service, Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division