CLA-2 RR:CR:GC 964963 GOB
Mr. James L. Sawyer
Katten, Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, IL 60661-3693
RE: Modification of HQ 961973; Plastic hangers
Dear Mr. Sawyer:
This letter is with respect to HQ 961973 dated August 12, 1999, issued to you on behalf of Sears, Roebuck and Co. (“Sears”), concerning the tariff classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of certain plastic garment hangers. We have reviewed the classification set forth in HQ 961973 and have determined that it is incorrect. This ruling sets forth the correct classification.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of HQ 961973, as described below, was published in the Customs Bulletin on May 2, 2001.
Two comments were received in response to the notice. Both comments were in support of the proposed action. One of the commenters asked the following questions: 1. Do the final rulings (two other rulings on the same issue are being revoked) pertain to hangers which are being shipped with garments in a flat pack as well as in specialized containers? 2. Is it relevant that the hangers may be given to consumers when the garments are purchased? 3. Is the actual reuse of the hangers necessary? and 4. The commenter requests that Customs acknowledge that hangers which have been recycled are treated as originating in the same country as the garments with which they are imported. We will respond to these questions in the LAW AND ANALYSIS section of this ruling.
FACTS:
The basic facts were described as follows in HQ 961973:
Your client has initiated a hanger recovery program in which, subsequent to use in their retail operations, hangers are forwarded to central locations and sorted as suitable or unsuitable for reuse. Those unsuitable for reuse are recycled into plastic pellets to be used in the manufacture of new hangers. The hangers suitable for reuse are generally more solid and durably constructed than others. The hangers which are identified for reuse are packed and coded with relevant hanger style information. They are forwarded to a hanger supply company which enters the hangers into its inventory and commingles them with newly manufactured hangers. The hangers (those identified for reuse and those newly manufactured) are sold to garment vendors to be used in the packing, shipping, and transportation of future apparel to retail stores. Your client estimates the useful life of the hangers under consideration to be 4 to 6 cycles; therefore, you state, a single hanger will likely be associated with various garments during its useful life.
The sample of the hangers stated to be "substantially identical" to the hangers which will be a part of the hanger recovery program consists of one piece of molded plastic with a metal "hook" to hang the hanger and garment. The plastic portion is of relatively thin plastic with a ridge around it approximately 3/8" thick (i.e., it is not a fully rounded closet-type hanger, but it is more substantial than a wire hanger).
In HQ 961973, we held as follows:
The hangers are "clearly suitable for repetitive use" and, accordingly, are classifiable separately from the garments with which they are entered under GRI 5(b), provided that : (1) they are of relatively substantial construction; and (2) a substantial proportion of which is forwarded to another company which commingles them with new hangers and sells them to garment vendors (which may include the original importer) for use in packing, shipping, and transportation of garments. They are classified as other articles of plastics in subheading 3926.90.98, HTSUS.
ISSUE:
What is the tariff classification of the hangers?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). GRI 1 provides that the classification of goods 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’s may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.
The HTSUS provisions under consideration are as follows:
3923 Articles for the conveyance or packing of goods, of plastics ...:
3923.90.00 Other.
* * * * * *
3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:
3926.90 Other:
3926.90.98 Other.
GRI 5(b), HTSUS, provides as follows:
Subject to the provisions of rule 5(a) above [which are not pertinent here], 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.
In HQ 961973, we concluded:
... that the hangers under consideration "are clearly suitable for repetitive use" and, therefore, that they are not classifiable with the goods with which they are entered. This conclusion is limited to the facts under consideration, in which:
1. The hangers are of relatively substantial construction;
2. A substantial proportion of the styles suitable for reuse is
forwarded to another company which commingles them with new hangers and sells them to garment vendors (which may include the original importer) for use in packing, shipping, and transportation of garments.
Our modification of HQ 961973 does not relate to the conclusion that the hangers are clearly suitable for repetitive use within the meaning of GRI 5(b). Our modification of HQ 961973 relates to the determination in HQ 961973 that the hangers are classified in subheading 3926.90.98, HTSUS. The GRI 5(b) finding and the subheading 3926.90.98, HTSUS, classification are separate determinations.
In HQ 961973, we stated: “Insofar as classification in heading 3923, HTSUS, is concerned, it is Customs position that the articles of that heading are ‘to be used primarily as temporary packaging for the merchandise contained therein [and] [o]nce the purchase was made, the [articles] would be discarded’.” We have reconsidered the scope of heading 3923, HTSUS. We now believe that there is no requirement that goods of heading 3923, HTSUS, be used primarily as temporary packaging. Further, heading 3923, HTSUS, does not exclude goods that are suitable for repetitive use.
EN 39.23 provides in pertinent part: “This heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products.”
EN 39.26 provides in pertinent part: “This heading covers articles, not elsewhere specified or included, of plastics ...”
Additional U.S. Rule of Interpretation 1 (a), HTSUS, provides as follows:
1. 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.
It is Customs position that the principal use of the hangers is for the conveyance of garments. The hangers are substantial enough to be used repetitively for the conveyance of garments. Accordingly, we find that the hangers are described in heading 3923, HTSUS, which covers articles for the conveyance or packing of goods. Therefore, the hangers are not described in heading 3926, HTSUS, because that heading covers articles not elsewhere specified or included. See EN 39.26, excerpted above. The articles at issue here are included in heading 3923, HTSUS. We note additionally that heading 3923 is more specific than heading 3926.
The subject plastic hangers are classified in subheading 3923.90.00, HTSUS, as: “Articles for the conveyance or packing of goods, of plastics ... : ... Other.”
Our responses to the questions posed by one of the commenters are as follows. We note that HQ 961973 is being modified only with respect to the classification of the hangers. No other issues were included within the scope of the proposal. 1. We believe that HQ 961973 could apply to hangers being used with garments in a flat pack. 2. and 3. With respect to the actual reuse of the hangers, HQ 961973 stated, as excerpted above, that its conclusion was limited to certain facts, including the fact that “[a] substantial proportion of the styles suitable for reuse is forwarded to another company which commingles them with new hangers and sells them to garment vendors ... for use in packing, shipping, and transportation of garments.” Accordingly, we believe that HQ 961973 does contemplate the commercial reuse of the hangers. However, actual reuse of the hangers is not necessary as long as the hangers are substantial and are of the class or kind of goods used for the conveyance of garments. The fact that certain hangers are occasionally provided to consumers upon purchase would not create a problem as long as the hangers are substantial and are of the class or kind of goods used for the conveyance of garments. 4. A country of origin issue or determination is not within the scope of HQ 961973, its proposed modification, or this ruling. Therefore, we express no opinion on this issue.
HOLDING:
The subject plastic hangers are classified in subheading 3923.90.00, HTSUS, as: “Articles for the conveyance or packing of goods, of plastics ... : ... Other.”
EFFECT ON OTHER RULINGS:
HQ 961973 is modified with respect to the classification of the plastic hangers. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
John Durant, Director
Commercial Rulings Division