CLA-2 RR:CTF:TCM 968129 BtB
Mr. Heidar Nuristani
Compliance Specialist
Central Purchasing, LLC
3491 Mission Oaks Blvd.
Camarillo, CA 93012
Re: Classification of a certain knife set made in China; piece count; unit of quantity
Dear Mr. Nuristani:
This is in reply to your binding ruling request sent electronically by eRuling template to the National Commodity Specialist Division (“NCSD”) of U.S. Customs and Border Protection (“CBP”) on January 9, 2006, requesting the classification and applicable unit of quantity under the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”) for a certain knife set made in China. Your letter has been forwarded to this office for a reply.
FACTS:
The knife set at issue is marketed as a “56 pc. Precision Knife Set.” The manufacturer has assigned the product item number 36410. In the eRuling template that you submitted, you state that:
Item number 36410 is a Precision Knife Set which can be used to cut, scratch, etch, scrape, layouts, and make models. The set includes 35 blades and 4 scribes in one side of the case held by magnetic strips. On the other side of the molded PVC case there are eight handles and a sharpening stone. Seven of the handles are designed for blades and one handle is designed for scribes. Seven of the handles are made of steel and one is made of plastic. In each handle a blade or scribe is placed as imported. To replace the blades or scribes the knurled portion of the handle is turned left to make it loose and after placing another one turned right to make it tied [sic]. The country of origin is China.
You also furnished us with the price breakdown of each article in the knife set (the stone, the plastic handle, the steel handles, and the blades/scribes). In the template, you also state and ask:
We would also like to know the reporting quantity of this set and how it is calculated. There is a blade placed in each handle. Is it counted as one or two?
ISSUE:
What is the classification of the knife set? What unit of quantity applies to the knife set?
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides, in part, that classification decisions are to be "determined according to the terms of the headings and any relative section or chapter notes." If 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, in order.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN”) constitute 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. While neither legally binding nor dispositive of classification issues, the EN provide commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
It is well established that, for tariff purposes, merchandise is to be classified in the condition in which it is imported. See United States v. Citroen, 223 U.S. 407 (1911). The knife set at issue is marketed as being 56 pieces (42 knife blades, 5 scribes (also commercially known as “scriber points”), 7 steel handles, 1 plastic handle, and 1 sharpening stone). However, at the time of importation, the 8 handles have blades/scriber points physically placed or joined in them. These articles have the character and are ready to be used as knives/a scriber. Consequently, we do not regard the handles and the blades/scriber points physically placed in them at the time of importation to constitute separate articles. To the contrary, they are complete articles (7 complete knives, 1 complete scriber). Accordingly, for classification purposes, there are 48 pieces in the knife set (7 knives having other than fixed blades, 1 scriber, 35 replacement knife blades, 4 replacement scriber points, and 1 sharpening stone).
As enumerated above, the knife set at issue consists of five types of components. These five types of components are classified individually in three different headings as follows: the 7 complete knives in the set are individually classified in heading 8211, HTSUSA, as knives with cutting blades. The complete scriber is individually classified in heading 9017, HTSUSA, as a marking-out instrument. The replacement knife blades are also individually classified in heading 8211, HTSUSA, as knife blades. The 4 replacement scriber points are also individually classified in heading 9017, HTSUSA, as parts of a marking-out instrument. Finally, the sharpening stone is individually classified in heading 6804, HTSUSA, as a stone for sharpening. No single heading in the HTSUSA is sufficiently broad to encompass the combination of components contained in the set. Consequently, the knife set at issue cannot be classified pursuant to GRI 1.
GRI 3 governs where the merchandise at issue consists of more than one material or substance, as here. See generally Better Home Plastics Corp. v. United States, 20 C.I.T. 221 (Ct. Int'l Trade 1996). GRI 3 provides, in relevant part:
When . . . goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
The heading which provides the most specific description shall be
preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
The “rule of specificity” articulated in GRI 3(a) does not apply when two of the headings each refer only to part of the items within the set. See Better Home Plastics Corp. In the case at hand, under GRI 3(a), we must regard the three headings that provide for components in the knife set at issue as equally specific. As a result, our analysis proceeds to GRI 3(b), which states:
Mixtures, composite goods consisting of different materials or made
up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
EN (X) to GRI 3(b), in pertinent part, states:
For the purposes of [GRI 3(b)], the term "goods put up in sets for retail sale" shall be taken to mean goods which:
consist of at least two different articles which are, prima facie, classifiable in different headings….
consist of products or articles put up together to meet a particular need or carry out a specific activity; and
are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).
The knife set at issue meets the above requirements. In regard to item (a), it consists of at least two different articles that are prima facie classifiable in different headings. In regard to item (b), the articles are put up together so that the user has all of the blades/scribes necessary to cut, scratch, etch, scrape, layout, make models, etc. in various projects. There is a clear relationship between the articles contained in the set (the blades and scriber points are used with the knives/scriber handles that fit them and the sharpening stone that is used to sharpen the blades) and such relationship establishes that the articles are clearly intended for use together for a single purpose or activity. In regard to item (c), the articles are put up in a manner suitable for sale directly to users without repacking. The set is contained in a molded PVC case and put up for sale in a cardboard box which is suitable for sale directly to users.
As the knife set is a good put up in a set for retail sale under GRI 3(b), this rule directs that the set is to be classified as if it consisted of the material or component which gives it its essential character. EN VIII to GRI 3(b) explains that "[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of the constituent material in relation to the use of the goods." The essential character of the knife set at issue is imparted by the knives having other than fixed blades. These are the working articles in the set with which the large majority of other articles in the set (replacement blades and sharpening stone) will be used and which also predominate the set by value. Accordingly, the knife set is classified as knives having other than fixed blades.
In classifying the knives having other than fixed blades, we bear in mind that a product's classification is determined by first looking to the headings and section or chapter notes. See Orlando Food Corp. v. United States, 140 F.3d 1437 (Fed. Cir. 1998). Only after determining that a product is classifiable under the heading should one look to the subheadings to find the correct classification for the merchandise. Id. We also keep in mind that absent contrary definitions in the HTSUSA or legislative history, we construe HTSUSA terms according to their common and commercial meanings. See Medline Indus. Inc. v. United States, 62 F.3d 1407 (Fed. Cir. 1995); see also Len-Ron Mfg. Co., Inc. v. United States, 334 F.3d 1304, 1309 (Fed. Cir. 2003).
Heading 8211, HTSUSA, provides for: “Knives with cutting blades, serrated or not (including pruning knives), other than knives of heading 8208, and blades and other base metal parts thereof.” Additionally, the EN to heading 8211 state, in relevant part, that the heading includes “Knives with several interchangeable blades, whether or not these are contained in the handles.” The knives having other than fixed blades at issue satisfy the common and commercial definition of the eo nomine exemplars in heading 8211, HTSUSA, and accordingly are classified in that heading. Subheading 8211.93.00, HTSUSA, which provides for: “Knives having other than fixed blades,” specifically provides for the knives at issue. Consequently, pursuant to GRI 3(b), the knife set at issue is classified in this subheading.
Articles classified in subheading 8211.93.00 are measured and reported in individual units (abbreviated as “No.” for “number” in the HTSUSA) and assessed a compound rate of duty (currently 3¢ each + 5.4%). As we have previously ruled, where the appropriate provision in Chapter 82, HTSUSA, carries a specific or compound rate of duty in addition to the ad valorem rate, as it does here, the specific or compound rate is applied to each of the items in a set. See Headquarters Ruling (“HQ”) 967376, HQ 967377, and HQ 966981, all regarding the classification of pumpkin carving sets and dated March 7, 2005; accord HQ 088521, dated May 13, 1991, on the classification of a crayon color stick set; see also HQ 967248 and HQ 967249, both on the classification of dinnerware sets and dated December 22, 2004; see generally CBP’s Informed Compliance Publication, Classification of Sets Under HTSUS (“Sets ICP”), updated March 2004, p. 19 (the section titled, “Sets Classified in Specific or Compound Rate of Duty Provisions” provides useful background on this topic). The analyses in these rulings and the Sets ICP can be traced back to United States Court of Customs and Patent Appeals opinions involving interpretation of similar set provisions under the Tariff Schedules of the United States (“TSUS”) such as Swissedent International v. United States, 40 Cust. Ct. 95, C.D. 1965, and Import Associates of America v. United States, 56 C.C.P.A. 100, 103 (C.C.P.A. 1969). We recognize that decisions interpreting TSUS nomenclature are not deemed dispositive in interpreting the HTSUSA, but find these cases instructive to the proper interpretation of set provisions in the HTSUSA. See Beloit Corp. v. United States, 18 C.I.T. 67 (Ct. Int'l Trade 1994).
Note that it is our view that Statistical Note 1 to Chapter 82, HTSUSA, is not applicable to the knife set at issue. Statistical Note 1 applies only to merchandise classified in provisions in heading 8205, 8206, 8211, or 8215 specifically referring to “sets” in their “article description” column. While this Statistical Note does not apply to the knife set at issue, note that the number of pieces reported are calculated in the same manner.
As we have determined that there are 48 pieces in the knife set at issue, the ad valorem part of the applicable rate of duty (5.4%) is assessed on the total value of the set and the specific duty (3¢) is assessed on each of the 48 pieces in the set.
HOLDING:
The certain knife set at issue, marketed as a “56 pc. Precision Knife Set,” is classified in subheading 8211.93.0060, HTSUSA, which provides for: “Knives with cutting blades, serrated or not (including pruning knives), other than knives of heading 8208, and blades and other base metal parts thereof: Other: Knives having other than fixed blades, Other (including parts).” The applicable rate of duty under the 2006 HTSUSA is currently “3¢ each + 5.4%.” The ad valorem part of the applicable rate of duty (5.4%) is assessed on the total value of the set and the specific duty (3¢) is assessed on each of the 48 pieces in the set.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUSA and the accompanying duty rates are provided on the world wide web at www.usitc.gov.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch