CLA-2 RR:TC:MM 959513 HMC
Ms. Mona Webster
Target Stores
33 South Sixth Street
P.O. Box 1392
Minneapolis, Minnesota 55440-1392
RE: Stackable CD Racks; Headings 7323, 7326 and 4421;
subheadings 7323.99.9060 and 7326.20.0050; Other Articles of
Wood; Table, Kitchen or Other Household Articles of Iron or
Steel; Other Articles of Iron or Steel; NY 896635, revoked.
Dear Ms. Webster:
This is in response to your letter, dated June 28, 1996, on
behalf of Target Stores, requesting reconsideration of NY 896635,
dated April 12, 1994. In NY Ruling Letter 896635, Customs
classified stackable compact disc (CD) racks, items 128-258 and
128-259, under subheading 7326.20.0050 of the Harmonized Tariff
Schedule of the United States (HTSUS), as articles of iron or
steel.
FACTS:
The two models of CD racks are made of steel wire and wood
sides that together are capable of holding 25 single, or 21
single and two double CDs. They measure approximately 16 inches
long by 6.5 inches wide by 5.5 inches high. The CD racks are
identical in all respects, but for the finish on the wooden side
panels. The wooden sides have a black finish (item number 128-258) or a natural finish (item number 129-259). The CDs will be
placed between and supported by the steel wires. Although they
are sold individually, the CD racks are designed to be stacked
one upon the other. The CD racks are packaged and sold in a box
displaying a CD rack on a shelf of a wall unit along with books,
a candle, and what appears to be a stereo or video component.
The provisions under consideration are as follows:
4421 Other articles of wood...4%
* * * *
7323 Table, kitchen or other household articles
and parts thereof, of iron or steel; iron or
steel wool; pot scourers and scouring or
polishing pads, gloves and the like, of iron
or steel;
7323.91 Other:
Of cast iron, not enameled:
7323.99 Other:
Coated or plated with precious
metal:
Not coated or plated with precious
metal:
Other:
7323.99.9060 Other...3.4%
* * * *
7326 Other articles of iron or steel:
Forged or stamped but not further
worked:
7326.20.0050 Articles of iron or steel wire
Other...4.6%
ISSUE:
Whether the CD racks are classifiable as household articles
of iron or steel under heading 7323, HTSUS, as other articles of
iron or steel under heading 7326, HTSUS, or as articles of wood
under heading 4421, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS, in accordance
with the General Rules of Interpretation (GRIs). GRI 1 states in
part that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6.
The CD racks are made of steel wire and wooden sides that
together are capable of holding single or double CDs. The
articles are described under heading 4421, as "Other articles of
wood," heading 7323, as "...Other household articles of iron or
steel" and heading 7326, as "Other articles of iron and steel."
GRI 2(b) states that any reference in a heading to a
material or substance shall be taken to include a reference to
mixtures or combinations of that material or substance with other
materials or substances. Any reference to goods of a given
material or substance shall be taken to include a reference to
goods consisting wholly or partly of such material or substance.
The classification of goods consisting of more than one material
or substance shall be according to the principles of rule 3.
GRI 3(a) states that when, by application of rule 2(b) or
for any other reason, goods are, prima facie, classifiable under
two or more headings, 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. The
CD racks are made up of two different components which together
form an inseparable whole. Since the CD racks are composite
goods, described in part by two or more headings, we must apply
rule 3(b) which requires that composite goods are to be
classified according to the component which gives the good its
essential character.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized system. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes
the notes should always be consulted. See T.D. 89-80, 54 Fed.
Reg. 35127, 35128 (Aug. 23, 1989).
Explanatory Note (VIII) to GRI 3(b), at page 4, states that
the factor which determines essential character will vary as
between different kinds of goods. It may, for example, be
determined by the nature of the material or component, its bulk,
quantity, weight or value, or by the role of a constituent
material in relation to the use of the goods.
We believe the steel component imparts the essential
character to the CD racks. The steel component is the largest,
heaviest and most visually and structurally significant part of
the article. The steel component provides the main function of
holding the CDs and without it there could not be a rack. The
wooden sides simply assist in this function, by providing support
to the steel part and acting as a base to the article. In
accordance with GRIs 3(b), the CD racks are properly classified
according to the constituent component of steel. Articles of
steel are provided in Chapter 73, HTSUS. It was suggested that
the merchandise is appropriately classified under subheading
7323.99.9060, HTSUS, based on the premise that the articles are
intended to be used in the home to hold compact discs.
EN 73.23, at page 1123, indicates that heading 7323
comprises a wide range of iron or steel articles, not more
specifically covered by other headings of the Nomenclature, used
for table, kitchen or other household purposes. The EN further
provides that this group includes other household articles such
as wash coppers and boilers; dustbins, buckets, coal scuttles and
hods; watering-cans; ash-trays; hot water bottles; bottle
baskets; movable boot-scrapers; stands for flat irons; baskets
for laundry, fruit, vegetables, etc; letter-boxes; clothes-hangers, shoe trees; luncheon boxes. Accordingly, we must
determine whether the CD racks are household articles.
The U.S. Court of International Trade (CIT) has noted
Webster's New World Dictionary of American English 654 (3d
College ed. 1988)'s definition of the term "household" as "of a
household or home; domestic." The Court determined that when
"household" is used with the term "articles" a use provision is
created. Hartz Mountain Corp. V. United States, 903 F.Supp. 57,
59, CIT Slip Op. 95-154(Sept. 1, 1995). The Court found the
phrase "household articles" to be a use provision within the
context of subheading 3924.90.50. Similarly, we believe that,
within the context of heading 7323, when "household" is used with
the term "articles" a use provision is created.
Additional U.S. Rule of Interpretation 1(a), HTSUS, states
that in the absence of special language or context which
otherwise requires, a tariff classification controlled by use
(other than actual use) is to be determined in accordance with
the use in the United States at, or immediately prior to, the
date of importation, of goods of that class or kind to which the
imported goods belong, and the controlling use is the principal
use. The subject articles will thus fall under heading 7323 if
they belong to the class or kind of articles principally used in
the home. The Court has established various factors, which are
indicative but not conclusive, to apply when determining
principal use within a particular class or kind. They include:
general physical characteristics, the expectation of the ultimate
purchaser, channels of trade, environment of sale (accompanying
accessories, manner of advertisement and display), use in the
same manner as merchandise which defines the class, economic
practicality of so using the import, and recognition in the trade
of this use. See Hartz Mountain Corp., 903 F.Supp. at 59. In
this instance, these factors are helpful in determining whether
the CD racks are intended for home use.
The CD racks are made to hold CDs. They are packaged and
sold in a box displaying a CD rack on a shelf of a wall unit
along with books, a candle, and what appears to be a stereo or
video component. They are sold by a retailer directly to the
consumer as a merchandise which would organize a collection of
CDs. The consumer will generally be expected to store such
articles within the home. The evidence presented indicates that
the CD racks are principally used in the home and that it would
be impracticable to give them a different use. We therefore find
that, since the CD racks will be used for household purposes,
they are classifiable under subheading 7323.99.9060, as other
household articles of iron or steel.
NY 896635 classified the subject merchandise in heading
7326, which provides for "Other articles of iron or steel." EN
73.26 states that this heading covers all iron or steel articles
obtained by forging or punching, by cutting or stamping or by
other processes such as folding, assembling, welding, turning,
milling or perforating other than articles included in the
preceding headings of this Chapter or covered elsewhere in the
Nomenclature. Since the CD racks are included in heading 7323,
we find that they are precluded from classification under heading
7326. Accordingly, NY 896635 must be revoked.
HOLDING:
The stackable CD racks, items 128-258 and 128-259 are
provided for in heading 7323. They are classifiable under
subheading 7323.99.9060, HTSUS, as "table, kitchen or other
articles of iron or steel: Other: Other: Not coated or plated
with precious metal: Other: Other... Other." The rate of duty is
3.4% ad valorem.
EFFECT ON OTHER RULINGS:
NY 896635, dated April 12, 1994, is revoked.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division