CLA-2: RR:CR:GC 966198 DBS
Ms. Vivien Gonzalez
C-Air International, Inc.
11222 S. La Cieneca Blvd.
Suite 470
Inglewood, CA 90304
RE: Lisa Frank® “Stencils & Pencils”; HQ 951965 revoked
Dear Ms. Gonzalez,
On September 18, 1992, this office issued Headquarters Ruling Letter (HQ) 951965 in response to a memorandum requesting reconsideration of HQ 950926, dated March 31, 1992. HQ 950926 classified the Lisa Frank® “Stencil & Pencils” activity set under the Harmonized Tariff Schedule of the United States (HTSUS) as a set put up for retail sale with the essential character imparted by the stencil. The stencil was classified in subheading 9503.90.60, HTSUS (now 9503.90.00), as a toy. HQ 951965 affirmed that decision. We have reconsidered HQ 951965 and HQ 962926 have determined the classification of the stencil to be incorrect.
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 revocation of the above identified ruling was published in the Customs Bulletin on May 21, 2003, Volume 37, Number 21. Three comments were received in response to the notice, two of which were in opposition to the proposed action. Comments will be addressed in the revised LAW AND ANALYSIS section, infra.
FACTS:
The merchandise at issue is a set consisting of a 6.5" x 3.5" yellow plastic stencil depicting a rough outline of a farm and farm animals, four colored pencils, and three erasers (shaped like a cow, a rabbit, and a heart).
ISSUE:
Whether stencils for drawing designs are classified as toys of heading 9503, HTSUS, or drawing instruments of heading 9017, HTSUS.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that articles are to be classified by the terms of the headings and relative Section and Chapter Notes. For an article to be classified in a particular heading, the heading must describe the article, and the article cannot be excluded therefrom by any legal note. In the event that goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
9017 Drawing, marking-out or mathematical calculating instruments (for example, drafting machines, pantographs, protractors, drawing sets, slide rules, disc calculators); instruments for measuring length, for use in the hand (for example, measuring rods and tape, micrometers, calipers), not specified or included elsewhere in this chapter; parts and accessories thereof:
9017.20 Other drawing, marking-out or mathematical calculating instruments:
9017.20.80 Other.
* * *
Other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof:
9503.90.00 Other.
The issue before us is whether the stencils are toys or drawing instruments, though the merchandise consists of a blister pack of three items. We have predetermined that the instant merchandise is classifiable as a set put up for retail sale, as specified in GRI 3(b), HTSUS. See EN (X)(3), GRI 3(b); see also Informed Compliance Publication, “The Classification of Sets”, December 1999. That is, the set determination in previous rulings on this product is affirmed. Therefore, the focus of this ruling is on the classification of the stencils in the set, which, for purposes of GRI 3(b), impart the essential character of the set because provide the figures to be drawn, the motif, provide the consumer’s attraction to the set, and comprise the bulk of the set. See EN VIII, GRI 3(b); see also Better Home Plastics Corp. v. U.S., 916 F. Supp. 1265 (CIT 1996), aff’d 119 F. 3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. U.S., 966 F.Supp. 1245 (CIT 1997), rehear’g denied, 994 F. Supp. 393 (1998).
Articles of Chapter 95, HTSUS, are not classifiable in Chapter 90, HTSUS. See Note 1(k), Chapter 90. In HQ 951965 we stated that the instant set was designed to amuse children and thus classified as a toy in heading 9503, HTSUS, and excluded from Chapter 90, HTSUS.
The term "toy" is not defined in the HTSUS. However, the General EN for Chapter 95 states that the "Chapter covers toys of all kinds whether designed for the amusement of children or adults." The U.S. Court of International Trade (CIT) construes heading 9503, HTSUS, as a "principal use" provision, insofar as it pertains to "toys." See Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (CIT 2000). Thus, to be a toy, the "character of amusement involved [is] that derived from an item which is essentially a plaything." Wilson's Customs Clearance, Inc. v. United States, 59 Cust. Ct. 36, C.D. 3061 (1967).
For articles governed by principal use, Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that, in the absence of special language or context which otherwise requires, such 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.” Emphasis added. In other words, the article's principal use at the time of importation determines whether it is classifiable within a particular class or kind.
While Additional U.S. Rule of Interpretation 1(a), HTSUS, provides general criteria for discerning the principal use of an article, it does not provide specific criteria for individual tariff provisions. However, the CIT has provided factors which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (hereinafter Carborundum).
For articles that are both amusing and functional, we look to Ideal Toy Corp. v United States, 78 Cust. Ct. 28 (1977), in which the court stated that "when amusement and utility become locked in controversy, the question becomes one of determining whether amusement is incidental to the utilitarian purpose, or whether the utility purpose is incidental to the amusement." In HQ 085267, dated May 9, 1990, Customs found that, with respect to a drawing kit including a jacket, "[a]lthough they may tend to amuse those who use them, such amusement is incidental to their primary purpose." That is, not all merchandise that provides amusement is properly classified in a toy provision.
Drawing and coloring are activities capable of providing amusement, but the ENs exclude from heading 9503, HTSUS, many articles that are used in drawing, coloring and other art activities. EN 95.03 states, in part, that heading 9503 excludes:
Paints put up for children’s use (heading 32.13).
Modelling pastes put up for children’s amusement (heading 34.07).
(c) Children's picture, drawing or colouring books of heading 49.03.
(d) Transfers (heading 49.08).
. . .
(h) Crayons and pastels for children's use, of heading 96.09.
(ij) Slates and blackboards, of heading 96.10..
These exclusions provide that articles and sets comprised of articles used for drawing or coloring are not classifiable as toys or as toy sets (classified according to GRI 1 under subheading 9503.70.00). The fact that the drafters of the Harmonized System upon which the US tariff schedule is based provided for the above-listed articles eo nomine in headings other than heading 9503, HTSUS, evinces an intent by the drafters that they not be considered toys. To that end, Customs has long construed the scope of heading 9503, HTSUS, to exclude such articles and sets.
Customs has never considered writing, coloring, drawing or painting to have significant "manipulative play value," for purposes of classification as a toy. Nor does Customs classify the tools for writing, coloring, drawing or painting as toys since those tools are not designed to amuse. See HQ 085267, dated May 9, 1990 (ruling “Graffiti Gear” was not a toy set because coloring lacks manipulative play value); HQ 960420, dated July 25, 1997 (determining that a set consisting of washable markers and stuffed textile items printed with designs was not a toy set); HQ 962355, dated January 5, 2000 (ruling that four types of coloring sets were not classified as toy sets but rather as GRI 3(b) sets classified by the article comprising the colored or decorated craft and not the act of drawing); HQ 965195 dated August 15, 2002 (classifying “Doodle Clings” coloring sets according to GRI 3(b) and not as toy sets). See also HQ 959189, infra; HQ 958063, dated February 13, 1996 (classifying a battery-operated drawing pad with pen for children as a drawing instrument of heading 9017 and not a toy because it was designed to facilitate drawing, not to amuse); HQ 953922, dated November 17, 1993 (classifying the “Video Painter” and "Design Studio Accessory Kit,” which included several stencils under heading 9017 for the same reason); and HQ 962327, dated June 23, 2000, (determining that an art activity set was not put up in a form indication use as toys and thus was not classifiable as a toy set at GRI 1, nor a GRI 3(b) set for retail sale); HQ 958152, dated April 2, 1996 (classifying light-up desk with designs for tracing as a drawing instrument) and HQ 958805, dated February 8, 1996 (classifying "Trace N' Color" in heading 9017).
The amusement derived from art-related activities is secondary to utility because those articles and sets used for drawing, coloring and other art-related activities are not “essentially playthings.” Exceptions may exist where the activity achieved from a set is role-play, such as playing fashion designer.
However, in the stencil arena Customs has issued conflicting rulings classifying stencils of similar construction to the instant stencils in heading 9503, HTSUS, in heading 9017, HTSUS, as drawing instruments, and by constituent material. While HQ 951965 reconsidered and affirmed HQ 950926, the history of these two rulings also includes a proposal to revoke both rulings in 1997 and a subsequent withdrawal notice in 1998. Part 177.12 of the Customs Regulations (19 C.F.R. §177.12) states, in relevant part, that a ruling found to be in error or not in accord with the current views of Customs may be revoked or modified through 19 U.S.C. §1625(c). Part 177.13 (19 C.F.R. §177.13) provides for Customs to rectify inconsistent decision of Customs officials. Taken in pari materia, these sections dictate that inconsistent treatment is impermissible under the regulations. As such, Customs instant action is warranted, though comments received in opposition to the proposed revocations and modifications claim it is not.
The commentors point out that Customs withdrawal of the notice proposing to revoke HQ 951965 and HQ 950926 in April of 1998 (Customs Bulletin, Vol. 32, No. 15, p. 50) included an analysis of the set under the Carborundum criteria in which we stated the set was actually of a class or kind classified as a toy set of subheading 9503.70.00, HTSUS. We note that this determination was never reflected in HQ 951965 and HQ 950926 (as classification remained in subheading 9503.90.60, HTSUS, according to GRI 3(b)), and serves only as dicta; the notice is not binding. Moreover, the notice neglected the fact that Customs has long ruled that articles and sets designed for drawing are not designed for amusement, and thus are not classified as toys. The fact that a child will trace (not invent, as the notice stated) barnyard animals and may create farm scenes does not rise to the level of role-play, especially since the only articles in the set are stencils, pencils and erasers. Further, though a toy set of subheading 9503.70.00, HTSUS, need not consist of any article classifiable individually as a toy, it is integral to the concept of GRI 1 toy sets that the articles typically are used together to provide amusement. The components of the toy set must possess a clear nexus which contemplates a use together to amuse. HQ 959232, dated June 2, 1998; HQ 962327, supra. The components in this set have the necessary nexus, but it contemplates tracing animals with colored pencils, not amusement of children or adults. Thus, the instant set is not classified in subheading 9503.70.00, HTSUS.
In light of the foregoing, the Carborundum factors should have been applied as follows:
The general physical characteristics of the articles in the “Stencils and Pencils” set are animal-shaped stencils, colored pencils and erasers. Regardless of whether the colors or shapes are amusing, the physical characteristics of the “Stencils and Pencils” set consist of articles used for drawing.
The expectation of the ultimate purchaser is to trace and color in the shapes in the stencil with the pencils.
The channels of trade are anything from a toy store to a stationery store to an all-purpose store, such as Wal-Mart. Many Lisa Frank® products, while marketed towards children because of their bright colors and designs, are not sold as toys, but as school supplies.
The environment of sale (accompanying accessories, manner of advertisement and display) also includes a range of store types. However, the packaging advertises “Other Lisa Frank Back-to-School Products…” which suggests that while the target user is a child, the product is not intended to be a toy.
The use is not in the same manner as merchandise classified as toys because the use is drawing.
As the set is comprised of stencils, pencils and erasers, articles clearly used to draw, the economic practicality of using the set for drawing is clear.
The recognition in the trade that stencils and a set of stencils, pencils and erasers are used for drawing or tracing is unquestionable.
The foregoing application of the Carborundum criteria clearly indicates that stencils are not goods of a kind designed for amusement. As such, the principal use of the instant set is not amusement.
“Stencil” is also not defined in the HTSUS. Tariff terms are construed in accordance with their common and commercial meaning. See Nippon Kogasku (USA), Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982); E.M. Chemicals v. United States, 920 F.2d 910, 913 (Fed. Cir. 1990). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. See C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982); Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 789, 6 Fed. Cir. (T) 121, 125 (Fed. Cir.), cert. denied, 488 U.S. 943, (1988).
The American Heritage Dictionary (2d College ed.; 1982) defines a “stencil,” in pertinent part, as “[a] sheet of celluloid, cardboard, or other material in which a desired lettering or design has been cut so that ink or paint applied to the sheet will reproduce a pattern on the surface beneath.” This definition is consistent with definitions from other lexicographic sources cited in HQ 959189, dated September 25, 1996, in which Customs classified stencil assortment books in heading 9017, HTSUS. In sum, a stencil is an instrument for creating a design.
EN 90.17 (A)(6), states that heading 9017, HTSUS, covers "Stencils of a kind clearly identifiable as being specialised as drawing instruments. Stencils not so specialised are classified according to their constituent material." In order to determine which stencils are “specialised as drawing instruments” we must review the scope of the heading.
The General ENs to Chapter 90 state that the chapter covers a wide variety of instruments and apparatus characterized by high finish and high precision. They provide, in relevant part, that the chapter includes “instruments … designed for certain specifically defined uses (surveying, meteorology, drawing, calculating, etc.).” The General ENs also state that “[t]here are certain exceptions to the general rule that the instruments and apparatus of this Chapter are high precision types,” and provide a non-exhaustive list of examples. The ENs to heading 9017, HTSUS, indicate that, among other instruments, the heading covers drawing instruments. In addition to drawing instruments such as pantographs and eidographs, drafting machines, drawing compasses, rulers, drawing curves, various squares (set, adjustable, and "T" types), and protractors, the language of the EN indicates that heading 9017 includes a full range of protractors, from the ordinary, found in drawing sets, to the complex, as used in engineering. Furthermore, Chapter 90 includes a range of rulers of various qualities.
The term “drawing” means "the art or technique of representing an object or outlining a figure, plan, or sketch by means of lines," while the term “draw” means "to produce a likeness or representation of by making lines on a surface." Webster's Ninth New Collegiate Dictionary (1990). Various standard lexicons provide similar definitions. In addition, the U.S. Court of Appeals for the Federal Circuit, in discussing the scope of terms in heading 9017, HTSUS, affirmed that the “drawing, marking-out or mathematical calculating instruments” of the heading are items used to create designs. See Hewlett-Packard Co. v. United States, 189 F. 3d 1346 (Fed. Cir. 1999).
It is clear that the list of exemplars in the ENs is not exclusive. Though the ENs to the chapter state that the included instruments are of high finish and high precision, there is no indication that the degree of sophistication is considered relevant criteria for heading 9017 purposes -- simply that the article in question is a drawing instrument, which, by its nature, is precise. Nothing in the ENs or elsewhere suggests that “drawing” is limited to professional or specialized drawing, just as “calculating” is not limited to that done solely by mathematicians or physicists, as the heading covers all forms of calculating instruments.
This analysis of heading 9017, HTSUS, is consistent with HQ 953922, dated November 17, 1993, HQ 957958 and HQ 958805, both dated February 8, 1996, and HQ 958063, dated February 13, 1996. Moreover, stencils of a kind used in children’s activity sets and children’s stencil sets, have been classified in heading 9017, HTSUS. See, e.g., HQ 953922, supra; HQ 962327, dated June 23, 2000
We note that in HQ 958805, supra, which classified the “Trace N’ Color” set as a drawing set of heading 9017, HTSUS, and HQ 958063, dated February 13, 1996, which similarly classified the “Playskool Painter” set, we stated that an article’s degree of sophistication was not a relevant criterion for heading 9017, HTSUS, with the exception of stencils. This statement is considered dicta because stencils that are classified by constituent material, i.e., those that are not “specialised as drawing instruments,” are not “unsophisticated” stencils. Rather, “sophisticated” stencils not intended to be used with writing utensils, such as duplicator stencils and mechanical-type stencils for mimeographing, silk screening, photography and the like, are classified according to constituent material. The instant stencils are designed to be used with a writing utensil; they are “specialised as drawing instruments.”
The commentors in opposition of the proposed revocations and modifications further contend that the stencils at issue are toys because they are “toy representations” or “junior editions” of stencils of heading 9017, HTSUS. Based on the application of the Carborundum factors, supra at 5-6, and the interpretation of heading 9017, HTSUS, it is evident that these stencils cannot be deemed toy representations or junior editions regardless of how crude or sophisticated they are.
Therefore, a stencil of heading 9017, HTSUS, must simply be a drawing instrument. The instant stencils are stencils intended to create designs. Given that the other components of the set are pencils and erasers, it is clear the designs are to be created by tracing the stencils. While drawing farm animals may provide amusement, the stencil was designed as an implement to create tracings of farm animals. Thus, design motif is not a factor for the tariff classification of stencils. According, stencils are classified in subheading 9017.20.80, HTSUS, as other drawing instruments. Because the stencil imparts the essential character of “Stencils and Pencils,” it controls the classification of the set.
We also note that the commentors attempted to rely on a Stipulated Judgment on Agreed Statement of Facts which concluded a litigation pending before the CIT to support their position. Rule 58.1 of the CIT’s Rules of Procedure states that an action may be stipulated for judgment at any time without brief, complaint or formal amendment of any pleading. The court has indicated the lack of precedential value in a case submitted on agreed stipulations of fact, without trial or briefing or opinion by the court. See Siemens America Inc. and Siemens Corp. v. United States, 2 CIT 136, 140 (1981), aff’d, 692 F. 2d 1382 (Fed. Cir 1982); see also Bergen Hudson Roofing Co., Inc., v. United States, 13 CIT 1077, 1078 (1989). An agreement to stipulate may be a culmination of various factors. Further, the agreement is binding only with respect to the specific merchandise at issue.
As no litigation regarding the substantive issues occurred and the specific entries to which that judgment is binding are not at issue here, the commentors reliance on that judgment is misplaced.
HOLDING:
The “Stencils and Pencils” set is classified as a drawing set in subheading 9017.20.80, HTSUS, which provides for “Drawing, marking-out or mathematical calculating instruments (for example, drafting machines, pantographs, protractors, drawing sets, slide rules, disc calculators); instruments for measuring length, for use in the hand (for example, measuring rods and tape, micrometers, calipers), not specified or included elsewhere in this chapter; parts and accessories thereof: other drawing, marking-out or mathematical calculating instruments: other.”
EFFECT ON OTHER RULINGS:
HQ 951965, dated September 18, 1992, is hereby REVOKED. In accordance with 19 U.S.C. 1625(c) this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division