CLA-2: OT:RR:CTF:TCM H058788 ASM
Mr. David Strong
Regional Manager
Evans and Wood & Co., Inc.
612 E. Dallas Rd.
Suite 200
Grapevine, Texas 76051
RE: Classification of Decorative Stickers for Scrapbooks
Dear Mr. Strong:
This is in response to your request to the National Commodity Specialist Division (NCSD), dated April 3, 2009, made on behalf of Hobby Lobby Stores, regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of decorative stickers for scrapbooks. Your request was referred to this office by the NCSD for reply. Samples of the merchandise were provided to Customs and Border Protection (CBP) and examined by this office. Your sample is being returned in accordance with your instructions.
FACTS:
This ruling request concerns the classification of merchandise identified as three-dimensional (3-D) scrapbook stickers, item # 877365. The 3-D stickers are imported in a single cellophane packet and consist of a felted fabric evergreen tree adorned with gold garland, colored rhinestones and a gold star tree topper, and separate paper decorations, some with and some without attached ribbon, that can be affixed on their own or to the tree (colored lights, a candy cane, a bell and colored balls with hooks). Each of the component parts has an adhesive backing. According to the importer, the component breakdown for the subject stickers is 50 percent felt, 40 percent colored paper, and 10 percent adhesive. Your submission notes the following: “Principal use within the United States: Scrapbook embellishment”.
ISSUE:
What is the proper classification of the merchandise under the HTSUS?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) 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 Harmonized Tariff Schedule and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Decorative stickers, such as the subject articles, are classified according to their composition. See e.g. HQ 959719, dated October 21, 1997 (stickers composed of dried flowers and plastic were classified in heading 1404, HTSUS as “vegetable products not elsewhere specified or included”), and N056197, dated April 23, 2009 (different sets of stickers classified in different headings in accordance with their essential character). The subject stickers cannot be classified in accordance with GRI 1 pursuant to the terms of the headings and relevant Section or Chapter Notes, as there is no heading which covers all of the components of the stickers. The 3-D stickers are constructed of more than one component material, which includes, fabric, paper, and adhesive. GRI 2(a) is not applicable because the article is not incomplete, unfinished, unassembled, or disassembled. GRI 2(b) specifically notes that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. Thus, these stickers may be classified in two or more headings under the HTSUS. When goods are, prima facie, classifiable in two or more headings, they must be classified in accordance with GRI 3:
(a) 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.
(b) 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.
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In accordance with GRI 3(b), we find that the subject stickers are properly classified as a “set” because they consist of goods put up in a set for retail sale which are, prima facie, classifiable in different headings and have been put up in a cellophane packet suitable for sale directly to users without repacking. Furthermore, the set consist of articles that are put up together to carry out a specific activity because each component serves to impart the same theme. All fifteen elements are designed to be used together to form an attractive display, e.g., for use in such activities as “scrapbooking”. This determination is consistent with our decision in CBP Headquarters Ruling Letter (HQ) 965295, dated September 11, 2002, where retail packaged goods consisting of a 48-page instruction book and four specialized paper punches were found to be a “set” within the meaning of GRI 3(b) as “goods put up in sets for retail sale”. See also HQ 967882, dated December 5, 2005 (stickers with a common theme used for “scrap booking” were classified as a set under GRI3(b)).
In this case, each of the possible headings refers to only part of the materials contained in the stickers. 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) as if they consisted of the material or component that gives them their essential character. The EN to GRI 3(b) states:
(VII) In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(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 numerous court decisions on “essential character” for purposes of GRI 3(b). In the recent case of Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278, 1295-1356 (CIT 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007), the Court analyzed all essential character factors in coming to its conclusion. The subject merchandise consisted of 124 SKUs of decorative lighting fixtures classified by CBP in subheading 9405.10.60, as fixtures of base metal. The Court of International Trade (CIT) reversed on most of the SKUs on the basis of GRI 3(b). The court held that, although some of the fixtures were properly classified as primarily metal, the glass shades of most of the fixtures imparted the essential character to those fixtures.
In the subject case, it is clear that the largest component is the felt evergreen tree. All the other components are smaller in size and are intended to enhance the evergreen tree. Furthermore, 50 percent of the component materials of all the stickers in this set are exclusively used in the evergreen tree. As such, the essential character of these stickers is conveyed by the evergreen tree and therefore properly classified in accordance with the fabric component.
Accordingly, the 3-D sticker set is classifiable pursuant to GRI 3(b) and may be classified pursuant to the component that imparts its essential character, i.e., the felt fabric of the evergreen tree. However, in classifying the stickers at issue, we note that one or more of the HTSUS provisions may be applicable:
Other made up articles, including dress patterns:
Other:
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Festive, carnival or other entertainment articles, including magic tricks and practical joke articles, parts and accessories thereof:
Articles for Christmas festivities and parts and
accessories thereof:
In the appeal of Midwest of Cannon Falls, Inc. v. United States, 20 Ct. Int’l Trade 123 (1996), aff’d in part, rev’d in part, 122 F. 3d 1423 (Fed. Cir. 1997) (“Midwest”), the Court set forth the test which, as synthesized in Park B. Smith, Ltd. v. United States, 25 Ct. Int’l Trade 506 (2001), aff’d in part, vacated in part, and remanded, 347 F. 3d 922 (Fed. Cir. 2003), reh’g denied (Fed. Cir. March 16, 2004) (“Park B. Smith”), requires both (1) that the article be closely associated with a festive occasion, and (2) that the article be used or displayed principally during a festive occasion such that use or display of the article at other times would be aberrant.
As you have described, the subject stickers are for “Scrapbook embellishment”. Accordingly, this is an activity that can be conducted throughout the year as one decides to enhance or bring up-to-date a scrapbook collection. The stickers are used when assembling a scrapbook and when viewing a scrapbook, and these activities are conducted throughout the year. Such stickers are also sold throughout the year at craft stores and the use or display of the article at other times of the year would not be aberrant. Thus, we find that the subject stickers are not classifiable as “festive articles” in heading 9505, HTSUS.
In view of the foregoing, we find that the subject 3-D sticker set is classifiable pursuant to GRI 3(b) as an “Other made up article” in heading 6307, HTSUS, specifically subheading 6307.90, HTSUS. This classification decision is supported by HQ 967882, dated December 5, 2005, wherein a set of Major League baseball team stickers comprised of 15 different stickers of fabric, plastic, paper, and foam double-sided stick tape, were found to be classified pursuant to GRI 3(b) in accordance with the fabric team jerseys as conveying the essential character to the set.
We note that subheading 9817.95, HTSUS, provides for the articles classifiable in subheading 6307.90, HTSUS, provided the articles meet the description set forth in 9817.95.01 and 9817.95.05, HTSUS. In this instance, subheading 9817.95, HTSUS, is not applicable because although the subject articles may be considered to be “3-D stickers” these are not three dimensional articles for the purposes of 9817.95, and in addition, they are decorative and not utilitarian.
HOLDING:
The subject merchandise, identified as 3-D scrapbook stickers (item
# 877365), is correctly classified pursuant to a GRI 3(b) analysis in subheading 6307.90.9889, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Other: Other, Other: Other”. The general column one duty rate is 7 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS 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
Enclosure