CLA 2 RR:CR:TE 965563 SG
Mr. William J. O'Rourke
C.P. Express, Customs House Broker, Freight Forwarder
700 Rockaway Tpke.
Lawrence, New York 11559
RE: Classification of watch gift box; Heading 4202; paper coated with a sheeting of plastic; ECOREL™ Plus; subheading 4202.92; “outer surface of”; “sheeting of plastics”; Sarne Handbags Corp. v. United States
Dear Mr. O'Rourke:
This is in reply to your correspondence of March 19, 2002, in which you request, on behalf of your client, A Classic Time Watch Co. Inc., a binding classification ruling under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), for a watch gift box, no style number provided. A sample of the watch box and product data sheets were provided.
FACTS:
The submitted sample is a lidded container of the kind normally given to the purchaser of a watch upon purchase of the watch. The case is fitted and is suitable for long term use. It is similar to a jewelry box of the kind normally given to a purchaser of jewelry. The watch box is manufactured of a hard plastics shell that is wholly covered with a plastic coated paper identified as ECOREL™ Plus.
A firm known a FIBERMARK DSI of South Hadley, Massachusetts produces the paper which is only sold in Europe and similar to other Fibermark products called Skivertex® and CoverLuxe Lite®.
Based on Fibermark's statement, the exterior covering of the box is a thin coated paper of heading 4811, HTSUSA. The covering has an aggregate thickness of approximately 8.5 Mil. It is a composite of three layers of materials. The base, also known as the substrate, is of a cellulose fiber which has been saturated with an acrylic latex. The coated paper has an exterior plastics coating of approximately 2 Mil thickness, which is less than 50 percent of the total thickness.
ISSUE:
What is the correct classification of the subject watch gift boxes?
LAW AND ANALYSIS:
Classification of goods under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings 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) represent the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. The Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUSA, and are generally indicative of the proper interpretation of these headings.
Heading 4202, provides for:
Trunks, suitcases. . .and similar containers; traveling bags. . . jewelry boxes . . . 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).
The ENs to heading 4202, HTSUSA, state that articles covered by the second part of the heading must be only “of” the materials specified therein or must be “wholly or mainly covered with such materials or with paper.” You agree that the watch gift box is “covered with paper” and, therefore, meets the criteria in the heading which are repeated in the ENs for classification within heading 4202.
The issue before us concerns the subheading under which to classify the watch gift box. At the six-digit level, the nomenclature classifies the majority of goods in Chapter 42 by the material that comprises the "outer surface." See Headquarters Ruling Letter (HQ) 954021, dated November 1, 1993, citing HQ 087760, dated October 31, 1991, and HQ 087640, dated November 8, 1990. When classifying goods in heading 4202, HTSUSA, it is problematic when the material that comprises the outer layer is a composite material, e.g., the outer layer is composed of a base material of paper that is coated with plastic. Customs addressed this issue in HQ 963618, dated August 2, 2002, wherein Customs explained: At the four-digit level, heading 4202, HTSUSA, requires that a
good be "of" or "wholly or mainly covered with" a specified material. However, at the six-digit level, the nomenclature classifies goods
by the material which comprises the "outer surface." . . . In classifying goods such as these, we must distinguish between the requirements
of the four- and six-digit headings, since they dictate different criteria
for classifying goods. This distinction was also discussed in HQ 954021, wherein Customs, noting HQ 087760, stated: "Evident in the above are two important distinctions: (1) a covering vs. an outer surface, and (2) classification at the four-digit (or heading) level vs. classification at the six-digit (or subheading) level."
The watch gift box is covered with plastic coated paper. Thus, at the four digit, or heading level, the box is considered to be "wholly or mainly covered" with paper. However, classification at the six-digit level requires consideration of what material constitutes the outer surface.
Except as noted below, 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.” Also see, HQ 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. Specifically, we have addressed in a number of rulings whether jewelry box frames, which were made of plastic or metal and were covered with paper backings to which textile materials had been applied, had an outer surface of textiles or paper. See HQ 954021, dated November 1, 1993. In reaching our conclusion in that ruling, 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).
Customs interpretation of the term "outer surface of" is consistent with Additional U.S. Note 2 of Chapter 42, HTSUSA, which provides that: 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. Thus, this note explicitly provides the mechanism for making an "outer surface" determination where a textile is impregnated, coated, covered or laminated with plastic. The note expresses the concept of "outer surface" by use of the term "exterior surface." The note is useful in understanding the term "outer surface" when applied to other composite materials. Customs has relied upon this note as guidance when classifying other articles in heading 4202 that are composed of composite materials. Customs application of the note is consistent with the Court of International Trade’s decision in Sarne Handbags Corp. v. United States, 100 F. Supp. 2d 1126; 2000 Ct. Int’l. Trade 51 (2000), wherein the court, applying the note, found that a handbag made of plastic coated textile was classified as having an outer surface of sheeting of plastic.
When applying the definition of "visible and tactile" to goods of heading 4202, HTSUSA, Customs has consistently classified the goods according to the outer-most substance of the composite material at issue. For instance, Customs addressed this same issue as it pertained to jewelry box cases that were covered with a flock-coated paper. Customs concluded, based on the fact that it was the textile flock that was visible and tactile, the jewelry cases had an outer surface of textile materials. See HQ 954021, supra, and HQ 961175, dated July 21, 1998. Similarly, Customs has classified jewelry boxes, a coupon holder, and a "Vanity Train Case" covered with paper that had been coated with sheeting of plastic, as cases having an outer surface of sheeting of plastic. See HQ 960454, dated December 9, 1997 (jewelry box); HQ 961175, supra, (jewelry box); HQ 960990, dated February 3, 1998 (coupon holder); and HQ 960462, dated December 16, 1997 (Vanity Train Case). See also, HQ 086983, dated June 14, 1990 (classifying a jewelry organizer that was covered with a floral textile material that was covered with clear plastic sheeting as having an outer surface of sheeting of plastic).
Moreover, Customs has recently ruled that articles composed of plastic coated leather are considered to have an outer surface of sheeting of plastic. See, HQ 963618, dated August 2, 2002 (classifying a handbag constructed of a combination of split leather covered with a layer of plastic and plastic sheeting backed with textile [imitation leather], as having an outer surface of sheeting of plastic); HQ 960344, dated April 19, 2000 (classifying an attaché case composed of three layers, an outer layer of plastic, a middle layer of composition leather and an inner layer of textile material, as having an outer surface of sheeting of plastic);
HQ 960002, dated October 24, 1997 (classifying a tote bag featuring front and back panels manufactured from a composite material of plastic covered layers of leather and composition leather as having an outer surface of sheeting of plastic); and HQ 955515, dated May 5, 1994 (holding that if the leather portions of the bag have a coating of plastic, then the outer surface is of sheeting of plastic).
In Sarne the court cited Pillowtex Corp. v. United States, 171 F.3d 1370, 1374 (Fed. Cir. 1999), which held that a tariff term’s correct meaning is its common meaning. It then held that “…'sheeting' is material in the form of or suitable for forming into a broad surface of something that is unusually thin, or is a material in the form of a continuous thin covering or coating.” The court found that the outer surface of the merchandise at issue contained a “plastic” or “plastics” component that was exposed, entirely “covered” the textile component, and was relatively thin in comparison to its breadth, and as such the merchandise was correctly classified under the provision for merchandise with an outer surface of ”sheeting of plastics.” The court in Sarne went on to state:
U.S. Note 2 provides support for the Court’s conclusion. While U.S. Note 2 relates only to specific headings within 4202, HTSUS, and therefore, is not binding for determining prima facie classifiability under heading 4202, HTSUS, it is persuasive as to what Congress intended the phrase “sheeting of plastics” to mean in the context of the statute as a whole. Cf. Productol Chem. Co. v. United States, 74 Cust. Ct. 138, 151 (1975) (when the same word or phrase is used in different parts of the same statute it will be presumed to have the same meaning, unless a contrary intent is indicated). Thus, it appears that when “textile fabric [is] impregnated, coated, covered, or laminated with plastics” and “the plastic constituent makes up the exterior surface of the article”, Congress intended the material on the outer surface of the merchandise to be considered a “sheeting of plastics.” See U.S. Note 2.
In the box before us here, laboratory analysis of the ECOREL™ Plus covering the molded plastic box found that it is entirely covered with plastic. The sample is a box whose outer surface contains a plastic or plastics component that is exposed, entirely covers the paper component, and is relatively thin in comparison to its breadth.
Applying the principles set forth in previously cited Headquarters rulings and Sarne, we find that the outer surface of the watch box before us is "plastic sheeting" under subheading 4202.92, HTSUS. Having determined that the box submitted has an outer surface of plastic sheeting, it is classified under subheading 4202.92, HTSUS, which provides for other articles that have an outer surface of sheeting of plastic or textile materials.
HOLDING:
The watch gift box covered in ECOREL™ Plus is classified in subheading 4202.92.9060 of the HTSUSA, which provides for “Trunks, suitcases. . .and similar containers; traveling bags. . . jewelry boxes. . . 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: Other: With outer surface of sheeting of plastic or of textile materials: Other: Other: Other: Other” The watch gift box is dutiable at the general column one rate of duty of 18.1 percent ad valorem.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division