CLA-2 RR:TC:TE 960938 jb
Cindy Shahamat
Schenker International, Inc.
4700 Lima Street
Denver, CO 80239-0945
RE: Request for Reconsideration of PD A88672 and HQ 960184;
insulated casserole dish caddie bag; SGI, Incorporated v.
United States, 122 F.3d 1468, Slip Op. 96-1272, decided
September 5, 1997
Dear Ms. Shahamat:
This is in response to your letter, dated November 3, 1997,
on behalf of your client, Tops of Rockies Marketing, requesting
reconsideration of HQ 960184, dated September 4, 1997, which
classified an insulated casserole dish caddie bag in heading
4202, Harmonized Tariff Schedule of the United States (HTSUS). A
sample was submitted to this office for examination.
FACTS:
In HQ 960184 this office addressed an earlier request
submitted by you for reconsideration of Port Decision (PD)
A88672, dated November 6, 1996, which classified the subject
merchandise in heading 4202, HTSUS. At that time we stated that
we were affirming the holding in PD A88672. That is, the proper
classification of the subject merchandise was heading 4202,
HTSUS. You maintain that the proper classification for this
merchandise is heading 3924, HTSUS.
The merchandise was described in HQ 960184 as an insulated
casserole dish caddie bag, measuring approximately 3 inches by 10
inches by 16 inches, with an outer surface of PVC plastic
sheeting. The bag features two interior pouch pockets with hook
and loop type fasteners and two webbed textile strap handles.
The bag is stated to transport and serve food and features a
pouch at the bottom of the caddie for the storage of a removable
cold pack.
We note that although the bag that was the subject of HQ
960184 was described as featuring two interior pockets, the bag
submitted with your present request only features one interior
pocket.
ISSUE:
Whether the subject merchandise is properly classified in
heading 4202, HTSUS, or heading 3924, HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is governed
by the General Rules of Interpretation (GRI's). GRI 1 requires
that classification be determined according to the terms of the
headings and any relative section or chapter notes. Where goods
cannot be classified solely on the basis of GRI 1, the remaining
GRI's will be applied, in the order of their appearance.
Prior to the decision in SGI, Incorporated v. United States,
there were two plausible classifications for this merchandise:
heading 4202, HTSUS, which provides for, among other things,
traveling bags and similar articles, of textile materials, of
vulcanized fiber or of paperboard, or wholly or mainly covered
with such materials or with paper, and heading 3924, HTSUS, which
provides for, among other things, tableware, kitchenware, other
household articles and toilet articles, of plastic. As such, in
HQ 960184, this office determined in accordance with applicable
administrative precedent that the proper classification for this
merchandise was heading 4202, HTSUS.
However, on September 5, 1997, the Court of Appeals for the
Federal Circuit (CAFC), in SGI, Incorporated v. United States,
found that the classification for this merchandise is in heading
3924, HTSUS. The CAFC stated, "we again must focus on whether
food or beverages are involved in the eo nomine exemplars set
forth in the provisions in the HTSUS at issue." Finding that the exemplars of heading 4202 did not include
containers that organize, store, protect, or carry food or
beverages, the CAFC held that the appropriate classification for
the coolers was subheading 3924.10.50, HTSUSA, the provision for
"Tableware, kitchenware, other household articles...of plastics:
Tableware and kitchenware: Other." The Court stated that this
classification "does encompass exemplars that are ejusdem generis
with the coolers because their purpose is to contain food and
beverages." The heading 3924 exemplars (specifically, those
enumerated in subheading 3924.10.10) which the Court noted in
particular were the "various household containers for foodstuffs
such as salt, pepper, mustard, and ketchup dispensers and serving
pieces for food."
As such, by operation of law, the Court's determination
effected a change in the classification of the subject merchandise
from heading 4202, HTSUS, to heading 3924, HTSUS. We note that the
exemplar containers of heading 3924, HTSUS, cited above are used as
dispensers and contain only specific foodstuffs, not additional
"various items" which are designed to organize, store, protect, and
carry. Thus, the subject merchandise, which is similarly designed
to carry food (substantiated by its insulation properties and a
pouch specifically designed to carry a removable cold pack), is per
the Court's decision, appropriately classified in heading 3924,
HTSUS.
A copy of this ruling in addition to HQ 960184 should be
presented at the port with the subject merchandise at the time of
entry.
In accordance with section 152.16(e), Customs Regulations (19
CFR 152.16(e)), unless the Customs Service directs otherwise, the
principles of any court decision adverse to the Government will be
applied to unliquidated entries and protested entries which have
not been denied in whole or in part and in which the same issue is
involved as soon as the time within which an application for a
rehearing or review may be filed has expired without such
application having been made. No application for rehearing or
review has been made and none will be made. However, the Customs
Service has issued field instructions regarding this matter. A
copy is enclosed for you information.
HOLDING:
SGI, Incorporated v. United States, revoked PD A88672 and HQ
960184 by operation of law. The proper classification for this
merchandise is now in subheading 3924.10.5000, HTSUSA, which
provides for tableware, kitchenware, other household articles and
toilet articles, of plastics: tableware and kitchenware: other.
The applicable rate of duty is 3.4 percent ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division