CLA-2 RR:CR:GC 962709 PH
Area Port Director
U.S. Customs Service
198 West Service Road
Champlain, NY 12919
RE: Internal Advice 6/99; decorative glass bottles imported containing flavored oils and vinegars; NY C86659 and NY D83073
Dear Area Port Director:
This is in reference to your memorandum of February 24, 1999, seeking internal advice as to the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of glass bottles in which are packed, at the time of importation, with spices, spiced oils, and vinegars. You cite two New York Rulings in which such glass bottles were classified with their contents.
FACTS:
In New York Ruling (NY) C86659 dated May 6, 1998, three variations of flavored canola oil were imported in 500 ml. glass bottles either square in shape, approximately 2” X 2” and 10.5” high, or cylindrical in shape, approximately 2 ¼” in diameter and 14” high. Each of the bottles was sealed with a cork stopper and wax, onto which was tied a hinged paper tag. The oils were to be used as seasonings for vegetables, pasta, salads and meat. The bottles were determined to be classifiable with the oils in subheading 2103.90.80, HTSUS, as other mixed condiments and mixed seasonings.
In NY D83073 dated October 27, 1998, four articles were imported. The first was a “four pack” (shrink-wrapped in a wire rack) of variations of flavored canola oil and vinegar in square glass bottles approximately 2” X 2” and 10.5” high. The second consisted of a similar “four pack”, with square bottles molded with a “wave shape” on two sides, 2” X 2”, ranging from 5.25” to 14” high. The third article consisted of flavored canola oil in a 2,000 ml. “bowed” glass bottle measuring approximately 5” in diameter at its widest point and 12” high. The fourth article consisted of flavored canola oil in an 800 ml. urn-shaped glass vessel suspended from its neck from a metal wire stand. Except for the second article, the bottles were sealed with a cork stopper and wax covering, and had a hinged paper tag. The bottles of the second article were sealed with twist-off cork tops and plastic coverings. The oils and vinegars were to be used to season vegetables, pasta, salads, and meat. The bottles were determined to be classifiable with their contents in subheading 2103.90.80, HTSUS, as other mixed condiments and mixed seasonings, or subheading 2209.00.00, HTSUS, as vinegar and substitutes for vinegar obtained from acetic acid.
Additionally, according to the Chief, Special Products Branch, National Commodity Specialist Division, the classification of flavored oils or vinegars and preserved fruits packed in certain other bottles, variously shaped, is also in question. The glass bottles are stated to fall into four categories: (1) square and round-based bottles of smooth glass, square, cylindrical, pyramid or vase-shaped, with straight necks or flared lips; (2) square based and shaped bottles with straight necks, with a raised, pineapple or trellis pattern on the glass; (3) round or triangular based bottles of smooth glass in non-geometric shapes; and (4) smooth glass bottles of unusual shapes (“wave” or “urn”) held in a wire rack.
ISSUES:
Whether the glass bottles are classifiable with their contents pursuant to General Rule of Interpretation (GRI) 5(b) as “of a kind normally used for packing such goods”.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (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, taken in order.
The HTSUS headings under consideration are as follows:
2103 Sauces and preparations therefore; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard
2209 Vinegar and substitutes for vinegar obtained from acetic acid
7010 Carboys, 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
7013 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018)
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).
Pursuant to GRI 5:
In addition to the foregoing [GRI’s], the following rules shall apply in respect of the goods referred to therein:
Camera cases, musical instruments, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and entered with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This rule does not, however, apply to containers which give the whole its essential character.
Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.
The EN for GRI 5(b) states "[t]his rule governs the classification of packing materials and packing containers of a kind normally used for packing the goods to which they relate[;] [h]owever, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use, for example, certain metal drums or containers of iron or steel for compressed or liquefied gas [and because] [t]his Rule is subject to Rule 5(a) ... the classification of cases, boxes and similar containers of the kind mentioned in Rule 5(a) shall be determined by the application of that rule."
The leading Court case on this issue is Holly Stores, Inc. v. United States, 2 CIT 278, 534 F. Supp. 818 (1981), affirmed 1 Fed. Cir. (T.) 16, 69 F.2d 1387 (1982). Holly Stores involved the applicability of the tariff schedule preceding the HTSUS, the Tariff Schedules of the United States (TSUS). However, Customs has taken the position that the interpretation in Holly Stores of the TSUS provision corresponding to GRI 5(b) of the HTSUS is applicable to GRI 5(b) (see, e.g., Headquarters Ruling (HQ) 084068 dated July 21, 1989; HQ 961973 dated August 13, 1999)).
Holly Stores makes it clear that the caveat that GRI 5(b) is inapplicable when the packing materials or containers are “clearly suitable for repetitive use” applies only to reuse in the commercial sense. The CIT distinguished between internal use and commercial use, stating "[i]t is evident that witness [name omitted] contemplated a reuse ? only in the limited sense that K-Mart would internally reuse [the hanger involved] without reference to reuse in the commercial sense" (2 CIT at 290). The Court of Appeals for the Federal Circuit (CAFC) affirmed the CIT decision in Holly Stores (supra), stating that "=[r]euse= in this context has been consistently interpreted to mean practical, commercial reuse, not incidental reuse" (1 Fed. Cir. (T) at 17). In this case, there is no evidence, such as that described in Holly Stores as necessary to establish clear suitability for repetitive use, nor are we aware of any repetitive use within the meaning of GRI 5(b) (i.e. reuse in the commercial sense). Accordingly, we must determine if the bottles are of the kind “normally” used for packing goods such as those with which they are imported, in which case they are classifiable with those goods, pursuant to GRI 5(b).
The TSUS predecessor to GRI 5, HTSUS, and GRI 5 were applied to gift boxes for glassware in Crystal Clear Industries v. United States, 18 CIT 47, 843 F. Supp. 721 (1994). The Court quoted the following legislative history for the TSUS provision as follows:
The concept of “usual” containers includes a variety of containers such as plastic envelopes for carrying rainwear when not in use, cases designed for electric shavers, and tobacco tins, which may continue to be used by the purchaser to “house” the original contents but which, when that purpose has been fulfilled, are usually discarded because of their lack of durability or their general unsuitability for other uses. On the other hand, this concept does not include containers, even though sold at retail with their contents, if such containers are designed to have significant uses quite apart from their original contents. For example, humidors filled with tobacco, miniature cedar chests containing cigars or candy, and doll houses filled with confections would not be regarded as [usual] containers. [18 CIT at 52-53, quoting from H.R. Rep. No. 342, 89th Cong., 1st Sess., at 5]
The Court went on to conclude that the gift boxes were classifiable with their contents “under both the TSUS and HTSUS standards” (18 CIT at 54). The Court stated: “Just because the gift boxes were an alternative marketing device from the plain corrugated paper does not and did not make them “unusual” in the market described by the witnesses” (id.). In regard to the reference to an “alternative marketing device”, the Court had earlier noted arguments that “gift boxes were ordered during a trend, were much more expensive than plain boxes, were highly decorated, and increased the salability of the glassware” (18 CIT at 50). The Court noted “[t]his style of packaging and advertising was common during the period in question and not unusual in the same sense that a four-foot high wine bottle sold for marketing purposes is different from a normal 750 milliliter bottle [and] [s]imilarly, in contrast to a cigar box or a steel drum, the packaging was not valuable or reusable in its own right” (18 CIT at 54). (The reference to the four-foot high wine bottle in the preceding quotation is from Fontana Hollywood Corp. v. United States, 64 Cust. Ct. 204, C.D. 3981 (1970), in which the Court held that such a bottle was “unusual” and not classifiable with its contents.)
Similarly, in this case, as “an alternative marketing device”, the bottles may be more expensive or decorative than plain, ordinary bottles. This does not make them “unusual” in the same sense as the four-foot high wine bottle of Fontana, supra. Nor do they have “significant” uses quite apart from their original contents, such as humidors filled with tobacco, miniature cedar chests containing cigars or candy, and dollhouses filled with confections (legislative history quoted from Crystal Clear, supra). The bottles are of a kind “normally” used for packing “gourmet” lines of foods, the flavored oils and vinegars and preserved fruits with which they are imported. This is consistent with past rulings of this office such as HQ 086874 dated June 28, 1990 (a metal liquor box considered “premium packaging” held to be a packing container within GRI 5(b)), and HQ 082955 dated May 29, 1992 (a ceramic flagon containing scotch whiskey held to be “a container ‘of a kind normally used for packing’ premium whiskies”). This is not inconsistent with HQ 959624 dated April 23, 1998, in which glass jars colorfully and attractively filled with levels of various seeds and spices, called “spice art” products, were classified separately from their contents. The “spice art” products are similar to the four-foot high wine bottle of Fontana, supra, in that their special decorative form makes them “unusual”. That is, the wine bottle was described as a “fun bottle”, one that “? will not pour wine conveniently into a glass and ? is best emptied into a pitcher first” (64 Cust. Ct. at 209-210). Analogously, the “spice art” products are for display and emptying their contents is impracticable, in that the various spices would be mixed up and the attractiveness of the display would be lost.
We emphasize that this ruling is applicable only to bottles imported with their contents, and not to such bottles imported empty. The standard for GRI 5(b) “of a kind normally used for packing such goods” is different from that for classification in heading 7010 or 7013, HTSUS. In the case of headings 7010 and 7013, as applicable in this case, the standard is that of “principal use” (see Additional U.S. Rule of Interpretation 1(a), HTSUS, Group Italglass U.S.A., Inc. v. United States, 17 CIT 1177, 839 F. Supp. 866 (1993)). The Courts have clearly distinguished between these standards (see Kerr, Maurer Company v. United States, 46 CCPA 110, C.A.D. 710 (1959); Fontana, supra, 64 Cust. Ct. at 211-213).
If imported empty, bottles such as those under consideration are classified in heading 7010 or 7013, HTSUS, depending on principal use. See, e.g., HQ 959639 dated October 21, 1997; HQ 959941 dated October 27, 1997; and HQ 959637 dated December 4, 1997. Principal use is the largest use in the United States at the time of importation of articles of the same class or kind as the imported article. Generally, class or kind is determined based on the form of the article in question. Bottles such as those under consideration imported empty are classifiable in heading 7010, HTSUS, if the form of the bottles indicates that they are principally used to pack or convey merchandise sold commercially. If their form indicates that they are principally used to store food in the home or for similar purposes, they are classifiable in subheading 7013.39, HTSUS. Even if the particular imported empty bottles are actually used as containers for the conveyance or packing of goods, they are not classifiable in heading 7010 unless this use represents the principal use (see above) for articles of the same class or kind. Similarly, even if the imported empty bottles are of the kind commonly so used, they are not classifiable in heading 7010 unless this use represents the principal use for articles of the same class or kind.
As stated above, a very different standard is applied in the determination of whether a glass bottle filled with foodstuffs such as those under consideration is "normal" packing within the meaning of GRI 5(b). This standard simply requires a decision as to whether this is a common or normal method of packing the foodstuffs (regardless of whether this use of the bottle represents its principal use). Thus, the determination in this case that the bottles under consideration are of the kind “normally” used for packing their contents has no effect on the determination of principal use of such bottles imported empty.
HOLDING:
The glass bottles under consideration are “of a kind normally used for packing [their contents]” and, pursuant to GRI 5(b), are classifiable with their contents (in subheading 2103.90.80 or 2209.00.00, HTSUS, in accordance with NY C86659 and NY D83073).
AFFECT ON OTHER RULINGS:
NY C86659 dated May 6, 1998, and NY D83073 dated October 27, 1998, AFFIRMED.
Sincerely,
John Durant, Director
Commercial Rulings Division