CLA-2 RR:TC:TE 960990 RH
Mr. Christopher L. Thayer
Hallmark Cards, Inc.
Kansas City, MO 64141
RE: Classification of a Coupon Holder; Heading 4202; Heading
4820; Articles of a Kind Normally Carried in the Pocket or
in the Handbag; Outer Surface Of; Plastic Coated
Paper
Dear Mr. Thayer:
This is in reply to your letter of August 20, 1997, requesting a
ruling on the tariff classification of a coupon file, on behalf
of Hallmark Cards, Inc.
You sent us a sample of the coupon file to examine. In order to
return the sample, as requested, you will need to contact Rebecca
Hollaway of my staff at (202) 927-2379, and provide her with your
Federal Express account number.
FACTS:
Customs National Import Specialist describes the merchandise at
issue as follows:
The sample submitted is an accordion style coupon holder
designed to organize and store coupons. The coupon holder
is identified as article number 695RA1674. It measures
approximately 6.75" x 4" x 1", when empty. The holder is
manufactured of a plastic coated paper outer cover with an
interior bellows type filing system of paper. There are 12
individual sections which are labeled with various
designations typical of grocery store products. The holder
is secured by means of an elastic cord which wraps around
its'[sic] center.
You propose three subheadings under which to classify the coupon
holder. Subheading 4820.50 of the Harmonized Tariff Schedule of
the United States Annotated (HTSUSA), encompasses albums for
samples or for collections. Subheading 4820.30, HTSUSA, provides
for binders, folders or file covers. Subheading 4202.39, HTSUSA,
includes articles of a kind normally carried in the pocket or in
the handbag.
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ISSUE:
What is the correct classification of the coupon holder?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRI). GRI 1 provides that
classification is determined first in accordance with the terms
of the headings of the tariff and any relative section or chapter
notes. Where goods cannot be classified on the basis of GRI 1,
the remaining GRI will be applied in order. Two headings are at
issue in this case. Heading 4202, HTSUSA, provides for:
Trunks, suitcases, vanity cases, attache cases,
briefcases, school satchels, spectacle cases, binocular
cases, camera cases, musical instrument cases, gun
cases, holsters and similar containers; traveling bags,
toiletry bags, knapsacks and backpacks, handbags,
shopping bags, wallets, purses, map cases, cigarette
cases, tobacco pouches, tool bags, sports bags, bottle
cases, jewelry boxes, powder cases and similar
containers, of leather or of composition leather, of
sheeting of plastics, of textile materials, of
vulcanized fiber or of paperboard, or wholly or mainly
covered with such materials or with paper.
Heading 4820, encompasses:
Registers, account books, notebooks, order books, receipt
books, letter pads, memorandum pads, diaries and similar
articles, exercise books, blotting pads, binders (looseleaf
or other), folders, file covers, manifold business forms,
interleaved carbon sets and other articles of stationery, of
paper or paperboard; albums for samples or for collections
and book covers (including cover boards and book jackets) of
paper or paperboard.
In researching the issues in this case, we discovered two
conflicting rulings concerning the classification of coupon
holders similar to the one in question. In Headquarters Ruling
Letter (HQ) 950048 dated March 2, 1992, Customs classified a
"bellows" type coupon holder under subheading 4202.32.1000,
HTSUSA. In New York Ruling Letter (NY) dated May 30, 1995,
Customs classified a coupon book designed to provide the user
with a place to store and organize discount coupons for groceries
under subheading 4820.50.0000, HTSUSA.
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To determine which ruling correctly classified the coupon
holders, we referred to the Explanatory Notes (EN) to the
Harmonized Commodity Description and Coding System for guidance.
The EN constitute the official interpretation of the nomenclature
at the international level. While not legally binding, they do
represent the considered views of classification experts of the
Harmonized System Committee. It has, therefore, been the
practice of the Customs Service to follow, whenever possible, the
terms of the EN when interpreting the HTSUSA.
The EN to subheading 4820.30 defines binders as articles for
holding loose sheets, magazines, or the like (e.g., clip binders,
spring binders, screw binders, ring binders), and folders, file
covers, files and portfolios. The EN also provide examples of
what constitutes albums for samples or for collections under
subheading 4820.50, i.e., stamps and photographs.
The EN for heading 4202 state that the expression "similar
containers" in the second part of the heading includes "note-cases, writing-cases, pen-cases, ticket-cases, needle-cases, key-cases, cigar-cases, pipe-cases, tool and jewellery rolls, shoe-cases, brush-cases, etc." Additionally, the EN for subheadings
4202.31, 4202.32 and 4202.39 state that those subheadings "cover
articles of a kind normally carried in the pocket or in the
handbag and include spectacle cases, note-cases (bill-folds),
wallets, purses, key-cases, cigarette-cases, cigar-cases, pipe-cases and tobacco-pouches."
A coupon holder is used to organize and store discount coupons
for grocery store items and, like a wallet or bill-fold, is
commonly carried in the pocket or handbag so that it is available
when making purchases at the grocery store. Thus, the holding
set for in HQ 950048, classifying the coupon holder under heading
4202, is correct.
At the subheading level, we do not agree with your proposed
classification in subheading 4202.39. At the six-digit level,
the nomenclature classifies the majority of goods in Chapter 42
by the material which comprises the "outer surface." HQ 954021,
dated November 1, 1993, citing HQ 087760, dated October 31, 1991,
and HQ 087640, dated November 8, 1990. The term "outer surface
of" is not defined in Chapter 42, nor anywhere else in the
HTSUSA. In HQ 086775, dated July 9, 1990, Customs stated that
the outer surface "is that which is both visible and tactile."
See 954021 and the cases cited therein. "Tactile" is defined as
follows: "1. Perceptible to the touch: TANGIBLE." "Tangible" is
defined as follows: "1a. Discernible by the touch or capable of
being touched." Webster's II New Riverside University
Dictionary, (1984) at 1178 and 1182, respectively.
Moreover, for purposes of heading 4202, Customs resolved the
issue of what is the "outer surface of" articles made with
composite materials. See HQ 954021. Specifically, we addressed
whether jewelry box frames which were made of plastic or metal
and were covered with paper backings to
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which textile materials had been applied had an outer surface of
textiles or paper. In reaching our conclusion, we said that
Additional U.S. Note 2 of Chapter 42 is instructive in
understanding the meaning of "outer surface of" when applied to
composite materials [not specifically listed in that note].
Additional U.S. Note 2 of Chapter 42 provides:
For purposes of classifying articles under subheadings
4202.12, 4202.22, 4202.32 and 4202.92, articles of
textile fabric impregnated, coated, covered or
laminated with plastics (whether compact or cellular)
shall be regarded as having an outer surface of textile
material or of plastic sheeting, depending upon whether
and the extent to which the textile constituent or the
plastic constituent makes up the exterior surface of
the article.
Customs application of this note makes it clear that a composite
material that is "of" textile for classification at the heading
level may, nonetheless, have an "outer surface of"plastic for
classification at the subheading level. HQ 954021, citing HQ
087640, HQ 087755, HQ 087210, dated May 10, 1991. In 954021,
counsel argued that the paper covering would be a paper for both
heading and subheading level classification [regardless of the
external surface]. The argument in HQ 954021 was based on the
logic that if the drafters of the Additional U.S. Notes intended
that textile and paper combinations be treated in the same way
that Additional U.S. Note 2, Chapter 42, treats plastic and
textile combinations, they would have so specified. We
disagreed with that argument and found that the absence of a note
addressing paper and textile composite materials, or other
composite materials (i.e., paper and plastic) did not evidence an
intent to interpret the term "outer surface" differently when
confronted with other component combinations. We held that the
composite paper and textile flock material that covered the
jewelry box was a paper for heading level classification (4202)
but had an "outer surface of" textile material for subheading
level classification (4202.92).
In this instance, the coupon file is completely covered with
plastic coated paper. Accordingly, based on Additional U.S. Note
2 to Chapter 42, and the rationale set forth in HQ 954021, we
find that it is classifiable in subheading 4202.32.1000, HTSUSA,
as an article with an outer surface of plastic sheeting material.
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HOLDING:
The coupon file in question is classifiable in subheading
4202.32.1000, HTSUSA, which provides for articles of a kind
normally carried in the pocket or in the handbag, with an outer
surface of reinforced or laminated plastics. The Column 1
General duty rate is 12.1 cents per kilogram plus 4.6 percent ad
valorem.
Sincerely,
John Durant, Director Commercial Rulings
Division