CLA-2 OT:RR:CTF:TCM H015358 BAS
Charles H. Jew
General Counsel
Elsa L Inc.
1 Thorndale Drive, #268
San Rafael, CA 94903
RE: Request for Binding Ruling; Tariff Classification of (1) Décor Box with Album (Style Reference 922791-001; (2) CD Box (Style Reference 922785-001) and (3) Photo Storage Box (Style Reference 922792-004)
Dear Mr. Jew:
This is in response to your request on behalf of your client, Elsa L Inc., dated July 2, 2007, concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of two photo storage boxes and a CD box. Samples have been provided to U.S. Customs and Border Protection (CBP), Office of International Trade, Regulations and Rulings.
FACTS:
The subject articles are three types of storage boxes. The first box, The Décor Box with Album, Style Reference 922791-001, is composed of a rigid paperboard box lined with textile fabric and covered with what appears to be cellular polyurethane plastic sheeting that is backed with a knit textile fabric. The item has a lower compartment, which is accessed from the front of the box, within which an included photo album is stored. The external surface area of the photo album is polyurethane and the bound pages are made of polypropylene. Attached to each side of each page is a plastic portioned photo sleeve that accommodates two 4 x 6 photographs per page. The upper compartment of the box itself is partitioned into two compartments, each measuring approximately 4½ inches by 7¼ inches. The upper compartments of the box are accessed by a flip-open lid that secures closed by means of magnets. The lid of the box has a cutout frame with a clear plastic viewing window to display a photograph. The front of the box features six one quarter inch decorative squares made of flocking. The percentage cost of each material by weight is as follows: polyurethane – 20%, polypropylene - 25%, paperboard – 50%, textured paper – 4% and flocking – 1%. The cost of each of the components is as follows: polyurethane – 45%, polypropylene – 30%, paperboard – 15%, textured paper – 5% and flocking – 5%.
The second box is a CD Box, Style Reference 922785-001. The overall dimensions are approximately 8 ¾ inches (length) by 5 1/5 inches (width) by 5 ¾ inches (height). The box is composed of paperboard covered with polyurethane sheeting backed with a non-woven man-made fiber material. A felt design appears on the 1¼ inch sides of the box lid. The following are the material weights of each of the components of the CD box: polyurethane – 35%, paperboard – 58%, textured paper – 5% and flocking – 2%. The polyurethane accounts for 40% of the cost of the item; the paperboard accounts for 40% of the cost; the textured paper accounts for 5 percent of the cost with the remaining fifteen percent of the cost attributed to the flocking. A non-woven material covers the bottom of the box.
The third box under consideration is another photo storage box, Style Reference 922792-004. The box consists essentially of a cardboard box with a lid. The overall dimensions are approximately 8 ¾ inches (L) by 5 1/5 inches (W) by 5¾ inches (H). Polyurethane sheeting backed with a non-woven man-made fiber material covers the cardboard. There is a “tip on” which is a miniature picture covered by plastic on a metal frame that is adhered to the surface of the polyurethane sheeting. The components by weight are as follows: polyurethane – 20%, polypropylene- 25%, paperboard – 50%, textured paper – 4% and the tip on- 1%. The components by cost are as follows: polyurethane – 50%, polypropylene – 25%, paperboard – 15%, textured paper – 5% and the tip-on 5%. A non-woven material covers the bottom of the box.
ISSUES:
1) What is the proper classification for the “Décor box with photo album”?
2) What is the proper classification for the CD box and the photo storage box?
LAW AND ANALYSIS:
ISSUE ONE:
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). 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 heading and legal notes do not otherwise require, the remaining GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs 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, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
CBP begins by noting that one of the component materials of the subject item is a combination of textile and plastic. As such, we must first assess whether the material is classifiable as a textile or plastic under the HTSUSA. On this point, we begin by noting Chapter 39, HTSUSA, which covers plastics and articles thereof. Specifically, the EN to Chapter 39 states: "…the classification of plastics and textile combinations is essentially governed by Note 1(h) to Section XI, Note 3 to Chapter 56 and Note 2 to Chapter 59." Note 1(h) to section XI (which covers textiles and textile articles), HTSUSA, states:
This section does not cover: Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39; ….
Chapter 59, HTSUSA, includes impregnated, coated, covered or laminated textile fabrics. In relevant part, Note 2(a) to Chapter 59, HTSUSA, states that heading 5903 applies to:
Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than:
* * *
(5) Plates, sheets or strip of cellular plastics, combined with textile fabric, where
the textile fabric is present merely for reinforcing purposes (chapter 39); ….
In view of the fact that the polyurethane plastic sheeting contains a knit textile fabric backing that is merely present for reinforcing purposes, it is our determination that this material, which covers the exterior of the box, would be excluded from Chapter 59, HTSUSA, and properly classified in Chapter 39, HTSUSA. See W968437, dated January 11, 2007; HQ 083288, dated March 26, 1990; HQ 086670, dated March 26, 1990; and HQ 085108, dated September 20, 1989.
We further note that the Décor box with photo album is prima facie classifiable in more than one heading. The applicable headings for the box are 3924, HTSUSA, covering other household articles of plastics (polyurethane plastic sheeting); 3926, HTSUSA, covering other articles of plastics and 4823, HTSUSA, covering other articles of paperboard (cardboard panels of the box). Thus, we have found that this article cannot be classified solely on the basis of GRI 1.
As the Décor Box at issue is prima facie classifiable by two or more headings, we must classify it according to GRI 3. GRI 3 states the following, in pertinent part:
When, by application of rule 2(b) or for any reason, 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.
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.
In this case, the headings 3924, 3926 and 4823, HTSUSA, each refer to only part of the materials that make up this product. Thus, pursuant to GRI 3(a), we must consider the headings equally specific in relation to the goods. Accordingly, the goods are classifiable pursuant to GRI 3(b).
It is important to note, that in applying a GRI 3(b) analysis, we have characterized the subject article as a composite good because it is composed of different materials which form an inseparable whole. Pursuant to GRI 3(b), such goods are to be classified as if they consisted of the material or component which gives them their essential character.
With respect to determining the essential character of this composite good, the EN to GRI 3(b) provides the following guidance:
(VIII). The 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 a constituent material in relation to the use of the goods.
There have been several court decisions on “essential character” for purposes of GRI 3(b). These cases have looked to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See, Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed 119 F. 3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), motion for rehearing and reconsideration denied, 994 F. Supp. 393 (CIT 1998), and Vista International Packaging co., v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also, Pillowtex Corp. v. United States, 98-1227, CAFC, 171 F.3d 1370; 1999 U.S. App. LEXIS 4371.
The essential character of the subject merchandise can be determined by comparing each component as it relates to the use of the product. In this case the box stores both the photos and the photo album. The box itself serves to organize, store, protect and display the photos and the photo album. Accordingly, it is the box, not the photo album, which imparts the essential character to the “Décor Box with Photo Album.”
Having determined that the box imparts the essential character to the “Décor Box with Photo Album,” we must now apply the GRI 3(b) analysis to the box itself as it is also a composite good. Clearly, the attractive polyurethane plastic exterior provides the most important decorative feature to the article. The Décor Box with Photo Album at issue has a faux leather appearance and would likely be purchased as an item to be displayed in one’s home. A consumer would be attracted to the silver color and leather like appearance of the matching box and photo album. In addition, according to the information provided, the cost of the polyurethane plastic sheeting is more than double the cost of the paperboard. Thus, pursuant to a GRI 3(b) analysis, it is our determination that the polyurethane plastic sheeting provides the essential character to the subject article.
In making the determination that the polyurethane plastic sheeting conveys the essential character to the subject merchandise, our decision is consistent with a prior CBP Headquarters Ruling (HQ) 967329, dated November 15, 2004, which classified ring binders consisting of a paperboard stiffener covered on the exterior and interior surfaces with cellular plastic sheeting material in Chapter 39, HTSUSA, as other articles of plastic. In HQ 967329, CBP reasoned as follows:
While each binder at issue is composed, in part, of paperboard (i.e., the paperboard stiffeners sealed between the exterior and interior surfaces and plastic foam), it is the component materials other than paperboard which are joined together (by heat-sealing, sewing, riveting, etc.) to form the binder’s shape, as well as its surfaces, pockets, sleeves, fastening capabilities etc. If separated from the non-paperboard component materials, the stiffeners would not appear able to form a binder or any other article of stationery, and would amount only to some unconnected paperboard rectangles. Although the non-visible stiffeners provide reinforcement which allows each binder to retain its shape, it is the non-paperboard materials which additionally provide color, textured, aesthetic appeal, etc. to the binders. Mindful of these factors, we find that the subject binders are not made of paper or paperboard.
Directly on point is Headquarters Ruling W968437, dated January 11, 2007, in which CBP held that a photo storage box consisting of a paperboard interior, a polyurethane exterior covering and a fabric liner on the inside is properly classifiable pursuant to a GRI 3(b) analysis as an other household article of plastic under heading 3924, HTSUSA, and New York Ruling (NY) M80074, dated February 23, 2006, in which CBP held that a photo storage box consisting of cardboard covered with cellular polyurethane plastic sheeting backed with a knit textile reinforcing fabric was properly classified as an other household article of plastic under heading 3924, HTSUSA. In W968437 the photo box was also decorative in nature featuring a red and black faux leather appearance with contrasting trim. The subject merchandise and the box in W968437 would be purchased by a consumer to display within the home as opposed to putting it in a storage closet. See also NY M82216, dated April 17, 2006, in which a desktop organizer of paperboard covered with textured cellular polyurethane sheeting was classified in subheading 3926.10.0000, HTSUSA, which provides for “other articles of plastics . . . office or school supplies”, and NY K82001, dated January 6, 2004, which classified toiletry boxes constructed of cardboard with an exterior of plastic sheeting in subheading 3924.90.5500, HTSUSA, as other household articles of plastic and toilet articles of plastic. In addition, in HQ 964716, dated September 12, 2002, CBP held that a GRI 3(b) analysis was applicable in classifying a textile covered box of paperboard as an other made up article of textile under heading 6307, HTSUSA.
In view of the foregoing, it is CBP’s determination that the subject article is classifiable pursuant to a GRI 3(b) analysis as an other household article of plastic under heading 3924, HTSUSA.
We wish to note that we are in the process of reviewing NY E81450, dated May 13, 1999, which classified a “Vinyl Photo Storage Box” as an other article of coated paper or paperboard in subheading 4823.90.6500, HTSUSA, to determine if it is consistent with the aforementioned rulings.
ISSUE TWO:
As the CD box and the Photo Storage Box are both rigid paperboard boxes that are covered with cellular polyurethane sheeting backed with a non-woven of man-made fiber, they will be addressed together. The non-woven of man-made fiber in both boxes is clearly present merely for reinforcement purposes and the subject merchandise would therefore be precluded from classification in Chapter 59.
The subject merchandise is composite goods classifiable in different headings, which describe the component materials. The cardboard portion is classifiable in Chapter 48, HTSUSA, while the polyurethane sheeting is classifiable in Chapter 39, HTSUSA. With regard to the subject merchandise, the essential character of these composite goods is the polyurethane sheeting. The polyurethane sheeting, in addition to the shape of the box, is what distinguishes the boxes from cardboard boxes which might also be used for storing items such as CDs or photos. In selecting such boxes, the consumer seeks a more attractive option as opposed to a plain cardboard box. The boxes at issue with their attractive polyurethane coating might be placed on a shelf in a family room or office for display. The CD box also contains a decorative flocking yet it is only 2 percent by weight and 15 percent of the cost of the item so while the consumer may be attracted to the particular CD box for the flocking we do not find that the flocking imparts the essential character to the box. Likewise, the photo storage box has a small “tip-on” which is a miniature impressionist painting adhered to the front of the box. While the “tip-on” is decorative, like the textured flocking, it only accounts for a relatively minor percent of the weight and cost of the item. The polyurethane sheeting, moreover, provides added protection for the contents of the box and would provide water resistance to protect the contents of the box.
This determination is consistent with NY L84962, May 19, 2005 and NY M85789, August 29, 2006, in which we classified a CD box made of paperboard covered with polyvinyl chloride (PVC) plastic sheeting backed with textile fabric according to the PVC sheeting and NY M80074, dated February 23, 2006, in which we classified a photo storage box consisting of cardboard covered with polyurethane plastic sheeting backed with textile in 3924, HTSUSA. It is also consistent with HQ W968437, dated January 11, 2007, in which CBP held that a photo storage box consisting of a paperboard interior, a polyurethane exterior covering and a fabric liner on the inside is properly classifiable pursuant to a GRI 3(b) analysis as an other household article of plastic under heading 3924, HTSUSA.
In addition to reviewing NY E81450, dated May 13, 1999, we note that we are in the process of reviewing NY M80420, February 24, 2006, for consistency with the classification of photo albums.
HOLDING:
The Décor Box with Album (Style Reference 922791-001), the CD Box Style Reference 922785-001) and (3) Photo Storage Box (Style Reference 922792-004) are classifiable pursuant to a GRI 3(b) analysis in subheading 3924.90.5600 HTSUSA, which provides for “Tableware, kitchenware, other household articles and toilet articles, of plastics: Other: Other”. The general column one duty rate is 3.4 percent ad valorem.
Please note that the duty rates set forth in this ruling letter are merely 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