CLA-2 RR:CR:TE 962297 SS
Port Director
U. S. Customs Service
301 East Ocean Blvd., 14th Floor Long Beach, California 90802
RE: Protest 2704-98-100847; Untimely Application for Further Review; Classification of an “Adventure Pack”; Portable, Soft-sided, Insulated Cooler Bag; Detachable Stadium Seat Cushion; Heading 4202, HTSUSA; Heading 9404, HTSUSA; Heading 3924, HTSUSA; Changes to the 2002 HTSUSA; Insulated Food or Beverage Bags
Dear Port Director:
This is in response to the Application for Further Review of Protest Number 2704-98-100847 filed by Tower Group International on behalf of Brad Markoff Industries, concerning the classification of an “Adventure Pack” under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The importer protests the liquidation of the subject merchandise under subheading 4202.92.4500, HTSUSA, as travel bags. The importer claims that the “Adventure Pack” is a vinyl insulated cooler bag subject to the decision in SGI, Incorporated v. United States, 122 F.3d. 1468 (Fed. Cir. 1997) and should be classified under subheading 3924.10.5000, HTSUSA.
The importer filed a timely protest claiming that the merchandise was classifiable under subheading 3924.10.5000, HTSUSA. Subsequently, the importer attempted to file an amendment to the Protest to request further review by Headquarters. However, the Application for Further Review was filed after the time for filing a protest had expired. Part 174.23 of the Customs Regulations requires that an Application for Further Review be filed within the time allowed for filing of a protest. 19 CFR 174.23. Thus, the Application for Further Review was untimely and the Protest should not have been forwarded to Headquarters for review. However, in light of the port’s desire for an answer and subsequent events, the proper classification of the subject merchandise will be addressed.
FACTS:
The sample submitted is identified by the importer as an “Adventure Pack.” The “Adventure Pack” consists of two components: an insulated food or beverage bag and a detachable stadium seat cushion. Advertising material characterizes the product as a fully insulated vinyl-lined picnic bag and indicates it will be used at games, picnic, boating or any outdoor activity. The outermost surface of the bag and cushion is composed of vinyl plastic sheeting, but the plastic sheeting is only the outward-facing surface of a layer composed of woven textile fabric that has been coated, covered or laminated with compact plastic. The combination of the textile and plastic materials forms a textile material which, on its own, is classifiable under heading 5903, HTSUSA.
The insulated food or beverage bag is a portable, soft-sided, insulated cooler bag that is primarily designed to store and preserve food and/or beverages. The bag measures approximately 16 inches in width by 14 inches in height by 4 inches in depth. The bag has a vinyl plastic lining and a layer of plastic foam insulation material between the outer layer and the lining. A zipper at the top of the bag which extends across the width of the bag allows access to the insulated interior compartment. The bag features two textile webbing handles and a detachable adjustable shoulder strap. The front side of the bag has four pockets for storing personal items such as keys, camera or sunglasses. The sides of the bag also have storage compartments. The back side of the bag has one flat pocket that runs the width of the bag. Two plastic buckles are located at the top of the back side of the bag and are used to attach the stadium seat cushion. Since the stadium seat cushion is completely detachable, the bag may be used alone.
The stadium seat cushion is attached to the back side of the bag by two straps with hook and loop material that loop through the buckles on the back side of the bag. The cushion is also secured at the bottom of the bag by a strip of hook and loop material. The stadium seat cushion measures approximately 15-½ inches in width by 13-½ inches in height by ¾ inch in depth. Since the stadium seat cushion does not have any features which indicate it will be used alone, it is anticipated that the cushion will be used in conjunction with the bag.
ISSUE:
What is the proper classification of the “Adventure Pack” under the HTSUSA?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of these headings.
The “Adventure Pack” consists of an insulated food or beverage bag combined with a stadium seat cushion. The insulated food or beverage bag is potentially classifiable under headings 3924, 4202 and 6307, HTSUSA. The stadium seat cushion is classifiable under heading 9404, HTSUSA. Since no single heading covers the good, classification based on the principles of GRI 1 is not possible.
GRI 2(a) applies to unfinished articles and is inapplicable. GRI 2(b) states, in pertinent part, that the classification of goods consisting of more than one material shall be determined according to the principles of GRI 3. Under the principles of GRI 3(a), the heading which provides the most specific description is to be preferred to a heading which provides a more general description. However, when two headings each refer to part only of materials in a composite good the headings are to be regarded as equally specific in relation to the good. GRI 3(b) provides that composite goods consisting of different materials are to be classified as if they consisted of the material which gives them their “essential character.”
The EN to GRI 3(b) state that composite goods include goods made up of separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts. Customs has previously found similar articles identified as “stadium packs” consisting of tote bags combined with stadium seat cushions to be composite goods. See Headquarters Ruling Letter (HQ) 953705, dated March 2, 1993 and HQ 953523, dated April 22, 1993. In HQ 953705 and HQ 953523, Customs stated that the cushion could be placed on a stadium seat so that the bag portion hangs down in front of the seat and behind the legs of the spectator providing easy access to the items carried to the event. The functions of both the bag portion and the cushion portion of the goods were described as complementary to each other and physically as well as functionally integrated. The fact that the instant cushion is detachable does not change our conclusion. The instant bag and cushion have been made to be the same size for easy handling and incorporate special features indicating that they will be used together. The bag and cushion have been specially adapted to one another to form a mutually complementary whole. Thus, the “Adventure Pack” qualifies as a composite good.
Next, Customs must determine which component gives the “Adventure Pack” its essential character. According to Explanatory Note VIII to GRI 3(b), essential character may be determined by the nature of the material, its bulk, quantity, weight, value or by the role of a material in relation to the use of the goods. In HQ 953523 and HQ 953075, Customs determined that neither the bag component nor the seat cushion component imparted essential character to good. However classification by application of GRI 3(b) is a particularly fact-specific exercise. In one scenario, a component of a particular multi-component article may be considered sufficiently predominant to confer essential character upon that article. In another scenario, the same kind of article may be classified by application of GRI 3(c) because no single component is considered sufficiently predominant. Whether GRI 3(b) or 3(c) applies to an article depends on the precise characteristics of that article. See HQ 955946, dated June 29, 1994.
The “Adventure Pack” is easily distinguishable from the stadium packs addressed in HQ 953523 and HQ 953075. Although the stadium packs had a seat cushion and a flap with a series of pockets for storage, they lacked the insulated main compartment of the “Adventure Pack”. The insulated main compartment of the “Adventure Pack” comprises the majority of the bulk of the item. Furthermore, the insulated food or beverage bag component has a greater role in the use of the entire article than the seat cushion component. It is the determination of this office that consumers will purchase this item because of its insulated food or beverage bag component and utilize the seat cushion component, but would not purchase the item to primarily use it as a seat cushion. Customs concludes that the component of the “Adventure Pack” that affords the item its “essential character” is the insulated food or beverage bag component.
This is consistent with a prior ruling on a tote/seat cushion carry bag in which Customs concluded that the essential character was imparted by the tote bag portion. See HQ 955946, dated June 29, 1994. Customs explained that the article was readily useable as a tote bag and a combination tote bag/seat cushion, but not solely as a seat cushion. Relying on the construction of the item, Customs found that the seat cushion aspect was subordinate and ancillary to the bag aspect. Similarly Customs finds that the instant insulated food or beverage bag is sufficiently predominant to confer essential character to the “Adventure Pack”. The fact that the seat cushion lacks any type of handle or carrying mechanism makes its use solely as a seat cushion unlikely. We also note that the instant seat cushion is distinguishable from many seat cushions sold separately which feature thicker padding. See HQ 954864, dated October 20, 1993; NY 886008, dated May 25, 1993; NY 816380, dated November 21, 1995; NY G83318, dated October 17, 2000; and NY G82611, dated October 20, 2000. Thus, it is Customs determination that the instant seat cushion has been specially designed for use with the bag and is subordinate to the insulated food or beverage bag.
We located one ruling, NY D85922, dated January 6, 1999, issued to Carmichael International Service on behalf of Markoff Industries, in which a “stadium seat cushion and utility pack/cooler bag” matching the description of the instant merchandise was classified under heading 9404, HTSUSA. Please be advised that we are in the process of reviewing that ruling to determine whether it should be the subject of a proposed revocation notice.
Next we must address the classification of the insulated food or beverage bag. Similar cooler bags have previously been classified under headings 3924, 4202 and 6307, HTSUSA, depending on their composition and outer surface material. However, pursuant to Presidential Proclamation 7515 of December 18, 2001, effective January 10, 2002, the term “insulated food or beverage bags” is included in the text of heading 4202, HTSUSA. The provision now reads:
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, insulated food or beverage 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, cutlery 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 [Emphasis added.]
Furthermore, a new eighth paragraph in the Explanatory Notes to heading 42.02 (page 661) states:
The expression “insulated food or beverage bags” covers reusable insulated bags used to maintain the temperature of foods or beverages during transportation or temporary storage.
Thus, the change requires that all insulated food or beverage bags and similar containers, entered on or after January 10, 2002, be classified only under heading 4202, HTSUSA. Two subheadings have been created specifically for insulated food or beverage bags. Subheading 4202.92.05, HTSUSA, covers insulated food or beverage bags with an outer surface of textile materials and subheading 4202.92.10, HTSUSA, covers insulated food or beverage bags with an outer surface of other materials such as plastics or fabric-backed compact plastics.
The insulated bag portion of the instant articles will be used to maintain the temperature of foods or beverages during transportation or temporary storage. Thus, the bag portion of the “Adventure Pack” is covered by the term “insulated food or beverage bags” of heading 4202, HTSUSA. Classification at the subheading level requires a determination of the outer surface material. Additional U.S. Note 2 to Chapter 42, HTSUSA, states that for the purposes of classifying articles under 4202.92, HTSUSA, 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 materials 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. Applying this principle to the instant case, the “Adventure Pack” is considered to have an outer surface of plastic sheeting. Accordingly, the “Adventure Pack” is classified in subheading 4202.92.1000, HTSUSA.
However, this ruling involves entries prior to January 2002. Thus, we must determine the proper classification of the instant merchandise prior to January 2002. Based on recent actions, it is Customs belief that the “Adventure Pack” was classifiable under subheading 3924.10.5000, HTSUSA, prior to January 2002.
HOLDING:
The “Adventure Pack” is classified in subheading 4202.92.1000, HTSUSA, which provides for insulated food or beverage bags with an outer surface of other than textile materials. The general column one duty rate is 3.4 percent ad valorem.
However, prior to January 10, 2002, the “Adventure Pack” was classifiable in subheading 3924.10.5000, HTSUSA, which provides for other tableware and kitchenware. The general column one duty rate in 1998 was 3.4 percent ad valorem.
The protest should be ALLOWED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division