CLA-2 RR:CR:GC 959624 PH
Ms. Angel L. Cooper
A. N. Deringer, Inc.
173 W. Service Road
Champlain, New York 12919
RE: Reconsideration of NYs A82751 and A83100; "spice art";
glassware for table, kitchen, toilet, office, indoor
decoration; half-moon, diamond, and rectangle shaped glass
jars filled with layers of spices; sunflower embossed jar;
principal use; 7010; 7013; EN 70.10; EN 70.13; U.S.
Additional Note 1(a); T.D. 96-7; HQs 087779; 953952; 955951;
957960; 959637; Group Italglass U.S.A., Inc. v. United
States, 17 CIT 226 (1993); Kraft, Inc, v. United States, 16
CIT 483 (1992); G. Heilman Brewing Co. v. United States, 14
CIT 614 (1990); United States v. Carborundum Company, 63
CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied,
429 U.S. 979 (1976); Fontana Hollywood Corp. v. United
States, 64 Cuts. Ct. 204 (1970); originating good; NAFTA;
General Notes 12(b); 12(b)(ii)(A); 12(t)70.2
Dear Ms. Cooper:
This is in response to your letter of August 6, 1996, on
behalf of Au Printemps Gourmet, requesting reconsideration of NYs
A82751 dated May 23, 1996, and NY A83100 dated May 28, 1996, both
concerning the classification of certain "spice art" products.
Samples were provided. We regret the delay in responding to your
request.
FACTS:
The merchandise consists of glass jars filled with levels of
various seeds and spices, resulting in a colorful display. The
lids of the jars are of cork, and there is a wax seal over the
corks and rims. Each jar has a ribbon around its neck to which
is attached a label describing and listing the contents.
Because the classification of the seeds and spices is not in
controversy, we are not describing them in this ruling (see NYs
A82751 and A83100, for such a description). There are four
samples. Each is of relatively heavy glass and has a short neck.
One is of clear glass and consists of a half-moon shaped jar with
a capacity of 250 milliliters. The other three are of green
tinted glass and consist of a diamond shaped jar (the base of the
jar forms a diamond shape) with a capacity of 500 milliliters, a
rounded rectangle shaped jar (the base and sides form rectangle
shapes, with rounded edges) with a sunflower design embossed on
the sides and a capacity of 1 liter, and a rectangle shaped jar
(the base and sides form rectangle shapes, with less rounding of
the edges than in the case of the previously described jar) with
a capacity of 1.5 liters.
The jars with seeds and spices were described in NYs A82751
and A83100 as "spice art product[s] that [are] commercially
designed to be used for human consumption or display purposes."
NYs A82751 and A83100 determined the seeds and spices and the
jars to be classified separately, with the latter being
classified under subheading 7013.99.50 or 7013.99.80, Harmonized
Tariff Schedule of the United States (HTSUS), depending on value.
The importer contends that the merchandise is a product of Canada
and that "... the general rate of duty being applied to the
[jars] is unreasonable [because] [t]he intent is not for the
glassware to have a secondary use as decorative table or
kitchenware but only as packaging for the gourmet food."
The competing headings are as follows:
7010: [c]arboys, bottles, flasks, jars, pots, vials,
ampoules and other containers, of glass, of a kind
used for the conveyance or packing of goods;
preserving jars of glass; stoppers, lids and other
closures, of glass.
Goods classifiable under subheading 7010.91.50 ("... [o]ther, of
a capacity: [e]xceeding 1 liter: ... [o]ther containers (with or
without their closures)"); subheading 7010.92.50 ("... [o]ther,
of a capacity: ... [e]xceeding 0.33 liter but not exceeding 1
liter: ... [o]ther containers (with or without their closures)");
or subheading 7010.93.50 ("... [o]ther, of a capacity: ...
[e]xceeding 0.15 liter but not exceeding 0.33 liter: ... [o]ther
containers (with or without their closures)") receive duty-free
treatment.
7013: [g]lassware of a kind used for table, kitchen,
toilet, office, indoor decoration or similar
purposes (other than that of heading 7010 or
7018).
The 1998 general column one rate of duty for goods classifiable
under subheading 7013.99.50 ("... [o]ther glassware: ... [o]ther:
... [o]ther: ... [o]ther: ... [v]alued over $0.30 but not over $3
each") is 30% ad valorem. The 1998 general column one rate of
duty for goods classifiable under subheading 7013.99.80 ("...
[o]ther glassware: ... [o]ther: ... [o]ther: ... [o]ther: ...
[v]alued over $3 each: ... [o]ther: [v]alued over $3 but not over
$5 each") is 13.5% ad valorem. Goods classifiable under either
subheading that originate in the territory of a North American
Free Trade Agreement (NAFTA) party, as provided in General Note
12(b), HTSUS, and that qualify to be marked as goods of Canada
under the terms of 19 CFR Part 102 are eligible for duty-free
treatment upon compliance with the NAFTA Implementation Act and
regulations issued thereunder (19 CFR Part 181).
ISSUES:
(1) Whether the glassware described in the FACTS is
classifiable as a container of a kind used for the conveyance or
packing of goods under heading 7010, HTSUS, or glassware of a
kind used for indoor decoration or similar purposes under heading
7013, HTSUS.
(2) Whether the glassware described in the FACTS is eligible
for preferential treatment under the NAFTA?
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 is determined according to the
terms of the headings and any relative section or chapter notes.
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 ENs should always be consulted. See T.D. 89-80, published in
the Federal Register August 23, 1989 (54 FR 35127, 35128).
The competing provisions (containers of glass of a kind used
for the conveyance or packing of goods in heading 7010 and
glassware of a kind used for table, kitchen, toilet, office,
indoor decoration, or similar purposes in heading 7013) are
"principal use" provisions (Group Italglass U.S.C., Inc. v.
United States, 17 CIT 226 (1993)). If an article is classifiable
according to the use of the class or kind of goods to which it
belongs, as is true of these provisions, Additional U.S. Rule of
Interpretation 1(a), HTSUS, provides that:
In the absence of special language or context which
otherwise requires-- (a) 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.
In other words, the article's principal use in the United States
at the time of importation, and not necessarily the article's
actual use, determines whether it is classifiable within a
particular class or kind.
The Courts have provided factors, which are indicative but
not conclusive, to apply when determining whether merchandise
falls 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 Kraft, Inc, v. United States, 16 CIT 483
(1992), G. Heilman Brewing Co. v. United States, 14 CIT 614
(1990), and United States v. Carborundum Company, 63 CCPA 98,
C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979
(1976).)
In applying Additional U.S. Rule of Interpretation 1(a),
HTSUS, and the above cases to heading 7010, it is Customs
position that, as a general rule, a glass article's physical form
will indicate its principal use and thus to what class or kind it
belongs. However, should an exception arise so that an article's
physical form does not indicate to what class or kind it belongs
or its physical form indicates it belongs to more than one class
or kind, Customs considers the other enumerated principal use
criteria.
The EN for heading 7010 is helpful in this analysis. EN
70.10 states, in pertinent part: "This heading covers all glass
containers of the kind commonly used commercially for the
conveyance or packing of liquids or of solid products (powders,
granules, etc.). ..." The key phrase in the quoted material is
"commonly used commercially for the conveyance or packing" of
liquids or solid products. The root word of "commercially" is
commerce which is described as the exchange or buying and selling
of commodities. The Random House Dictionary of the English
Language (1973), p. 295, and Webster's New World Dictionary (3rd
Coll. Ed.) (1988), p. 280. The root word of "conveyance" is
convey which is described as to carry, bring or take from one
place to another; transport; bear. Supra, at p. 320 and p. 305,
respectively.
Customs has used the above criteria in classifying jars such
as those under consideration. See, e.g., HQ 959638 dated October
10, 1997, which classified triangle shaped and 12-sided glass
jars with cork lids under heading 7013, HTSUS (see also HQs
087779 dated December 27, 1990, 955951 dated April 15, 1994,
953952 dated September 22, 1994, and 959637 dated December 4,
1997, and Treasury Decision (T.D.) 96-7 which sets forth Customs
position as to headings 7010 and 7013, HTSUS, for containers of
glass used for the conveyance or packing of goods and glass
storage articles). In HQ 959638, Customs stated:
The jars at issue are not used commercially. ... They are
household jars that are used as canisters in the kitchen to
hold various types of food. ... [quoting HQ 087779]
Similarly, the jars in this case are of a kind used (i.e.,
principally used) for indoor decoration or similar purposes and
not as "... containers of the kind commonly used commercially for
the conveyance or packing of liquids or of solid products" (EN
70.10). The physical form of the jars and the way they are
marketed supports this conclusion (in regard to the latter, we
note that the labels attached to the jars emphasize the
decorative nature of the articles, in that "no two products will
be exactly the same" and that purchasers may use the ingredients
in their favorite recipes or they "... may enjoy [the article] as
a decorative accessory in your kitchen"). Because the competing
tariff provisions are "principal use" provisions and not "actual
use" provisions, the fact that the jars are imported filled with
the layered seeds and spices does not affect this conclusion (see
HQ 957960 dated February 5, 1996, holding certain candy-filled
decorative glass jars to be separately classifiable from the
candy under heading 7013, HTSUS, for a thorough description of
Customs position in this regard; see also Fontana Hollywood Corp.
v. United States 64 Cust. Ct. 204, C.D. 3981 (1970), holding
certain long-neck bottles filled with wine to be "unusual"
bottles subject to tariff treatment separate from the wine
contained in the bottles). The jars are classifiable as
glassware of a kind used for indoor decoration or similar
purposes, in subheading 7013.99.50 or 7013.99.80, HTSUS,
depending on value.
To be eligible for tariff preference under the NAFTA, goods
must be "originating goods" within the rules of origin in General
Note 12(b), HTSUS. General Notes 12(b)(i) and (ii)(A) provide
that:
For the purposes of this note, goods imported into the
customs territory of the United States are eligible for the
tariff treatment and quantitative limitations set forth in
the tariff schedule as "goods originating in the territory
of a NAFTA party" only if--
(i) they are goods wholly obtained or produced
entirely in the territory of Canada, Mexico and/or the
United States; or
(ii) they have been transformed in the territory
of Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of
this note, each of the non-originating materials used in the
production of such goods undergoes a change in tariff
classification described in subdivisions (r), (s) and (t) of
this note or the rules set forth therein. . . .
Therefore, if the jars are wholly obtained or produced
entirely in the territory of Canada, Mexico and/or the United
States, they are eligible for tariff preference under the NAFTA.
As stated above, subheadings 7013.99.50 and 7013.99.80, HTSUS,
provide for duty-free treatment for such originating goods that
qualify to be marked as goods of Canada. NY A85662 dated July
25, 1996, issued to your client in this matter, so held in the
case of a jar manufactured in Canada and used for a "spice art"
product.
If the jars are produced outside the territory of Canada,
Mexico and/or the United States (we note that one of the samples
is marked "made in Spain"; see also NY A83089 dated May 24, 1996,
to your client), General Note 12(b)(i) is inapplicable. Unless
the jars are produced in Canada from non-originating materials,
each of which undergoes a change in tariff classification from
any heading other than headings 7007 through 7020, General Note
12(b)(ii)(A) also would be inapplicable (see General Note 12(t)
70.3, HTSUS).
HOLDINGS:
(1) The glassware described in the FACTS is classifiable as
glassware of a kind used for indoor decoration or similar
purposes in subheading 7013.99.50 or 7013.99.80, HTSUS, depending
on value.
(2) The jars are eligible for preferential treatment under
the NAFTA only if they are wholly obtained or produced entirely
in the territory of Canada, Mexico and/or the United States, or
if the jars are produced in Canada from non-originating
materials, each of which undergoes a change in tariff
classification from any heading other than headings 7007 through
7020.
EFFECT ON OTHER RULINGS:
NYs A82751 and A83100 are affirmed.
Sincerely,
John Durant, Director,
Commercial Rulings Division