CLA-2 OT:RR:CTF:TCM H070667 TNA
Jenny Davenport
Wal-mart Stores, Inc.
Mail Stop #0410-L-32
601 N. Walton
Bentonville, AR 72716-0410
RE: Modification of NY I83131; Classification of electric Christmas light sets from China
Dear Ms. Davenport:
This letter is in reference to New York Ruling Letter (“NY”) I83131, issued to Wal-mart Stores, Inc. (“Wal-mart”) on July 10, 2002, concerning the tariff classification of electric light sets from China. In that ruling, U.S. Customs and Border Protection (“CBP”) classified the merchandise under subheading 9405.40.8000, Harmonized Tariff Schedule of the United States (“HTSUS”), as other electric lamps and lighting fittings: of base metal. We have reviewed NY I83131 and found it to be partly in error. For the reasons set forth below, we hereby modify NY I83131.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke NY I83131 was published on June 9, 2010, in Volume 44, Number 24, of the Customs Bulletin. CBP received two comments in response to this notice, neither of which addressed HQ H070667.
FACTS:
The subject merchandise consists of four different styles of light sets, each with electrical green wire harnesses and plastic sockets that contain miniature light bulbs. Style number 76-756M consists of a net-shaped wire harness that measures 7 1/2 feet in length by 8 inches in width and contains 150 plastic sockets with multicolored light bulbs. It is primarily used to decorate the outside area of the home, but could also be used to decorate the mantelpieces or stairways inside the home.
Style number 82505WM consists of an electrical green wire harness that measures approximately 83 feet in length and contains 200 plastic sockets with miniature multicolored light bulbs. It is primarily used to decorate the outside area of the home, but could also be used to decorate the mantelpieces or stairways inside the home.
Style number 78-971M consists of two electrical green wire harnesses which together measure about 18 feet in length and contains 400 plastic sockets with miniature multicolored light bulbs in three-piece clusters. It could be used to decorate Christmas trees as well as the outside area of the home, such as windows and fences.
Style number 66-596M consists of three electrical green wire harnesses which together measure about 114 feet in length and contains 450 plastic sockets with miniature multicolored light bulbs. It could be used to decorate Christmas trees as well as the outside area of the home, such as windows and fences.
In NY I83131, dated June 13, 2002, CBP classified the light sets under 9405.40.8000, HTSUS, as: “other electric lamps and lighting fittings: of base metal: other.”
ISSUE:
Whether the subject electric light sets should be classified under subheading 9405.40.80, HTSUS, as “other electric lamps,” or under subheading 9405.30, HTSUS, as “lighting sets of a kind used for Christmas trees”?
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 headings and legal notes do not otherwise require, the remaining GRI may then be applied. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
The HTSUS provisions under consideration are as follows:
9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:
9405.30.00 Lighting sets of a kind used for Christmas trees
9405.40 Other electric lamps and lighting fittings:
Of base metal:
9405.40.80 Other
In examining the competing subheadings within heading 9405, HTSUS, we note that subheading 9405.30.00, HTSUS, is a “principal use” provision within the meaning ascribed in Primal Lite v. United States, 15 F. Supp. 2d 915 (CIT 1998); aff’d 182 F. 3d 1362 (Fed. Cir. 1999). In Primal Lite, the court concluded that because subheading 9405.30.00, HTSUS, is a principal use provision, it is therefore subject to Additional U.S. Rule of Interpretation 1(a), HTSUS, which states as follows:
a tariff classification controlled by use (other than actual 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.
Additionally, the Primal Lite court, in discussing principal use, held that “it is the use of the class or kind of goods being imported that is controlling, rather than the specific use to which the importation itself is put,” i.e. goods need not be actually used in the same manner as the entire class or kind in order to recognized as part of that class or kind. CBP has repeatedly upheld this analysis by defining principal use as the use of the class or kind of the merchandise at issue that exceeds any other use. See, e.g., HQ 964954, dated April 18, 2002; HQ 963264, dated May 4, 2001; HQ 963032, dated July 24, 2000; and HQ 083885, dated July 18, 1989. Therefore, to classify the subject merchandise, it is necessary to determine whether it belongs to the class or kind of goods that are recognized as being principally used for the decoration of Christmas trees.
Courts have provided several factors to apply when determining whether merchandise falls within a particular class or kind of good. They include: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels of trade in which the merchandise moves; (4) the environment of the sale (e.g. the manner in which the merchandise is advertised and displayed); (5) the usage of the merchandise; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use. See United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976), cert denied, 429 U.S. 979 (1976).
Each of the subject light sets is designed to be used at Christmas. As evidenced by statements in the filing request, style numbers 78-971M and 66-596M are designed for the decoration of Christmas trees, as well as the outside of homes. Style numbers 78-971M, 66-596M, and 82505WM have green wire that is many feet long and contain many multicolored bulbs. They are intended to be used to decorate the outside and the inside of the home during the Christmas season. CBP has consistently held that the ability to use these types of light sets outdoors is not a barrier to classification in subheading 9405.30, HTSUS, when it was determined that they were of the class or kind of merchandise that was principally used for decorating Christmas trees. See, e.g., HQ 967008, dated June 29, 2004 (“Because of this dual indoor and outdoor use, as well as the statements regarding the potential for varied indoor use, it is asserted the [subject merchandise] are not limited to decorating only Christmas trees. Regarding this dual indoor and outdoor use, CBP does not believe that this factor by itself is determinative for finding the lights at issue are part of a class or kind of light that is principally used for decorative purposes other than Christmas trees.”) See also HQ 966882, dated March 10, 2004; NY I83154, dated July 17, 2002; NY I83156, dated July 17, 2002; NY J89048, dated November 7, 2003; NY I83157, dated July 10, 2002; NY I82127, dated July 1, 2002; and NY I82362, dated July 1, 2002.
Finally, because of these lights’ packaging, CBP believes that the ultimate expectation of the purchaser is that these lights are intended for use on Christmas trees. Although CBP recognizes that many consumers may purchase these lights for use on objects other than Christmas trees, such as hanging them outdoors or in a living room, the subject merchandise’s long wire harness and shaped bulbs means that it is of the same type of lights as are hung on Christmas trees. We also note that substantially similar merchandise has repeatedly been classified under subheading 9405.30.00, HTSUS. See, e.g., HQ 966882; HQ 966962, dated February 9, 2005; HQ 967008; HQ 967408, dated February 9, 2005; NY J89048; NY J83867, dated May 7, 2003, NY I85459, dated September 12, 2002; NY I83664, dated July 17, 2002; NY I82126, dated July 1, 2002; and NY I83133, dated July 10, 2002. As a result, CBP finds that style numbers 78-971M, 66-596M, and 82505WM are classified under subheading 9405.30.00, HTSUS, which provides for “Lighting sets of a kind used for Christmas trees.”
By contrast, light sets that are classified under subheading 9405.40.80, HTSUS, because of certain physical characteristics are recognized as not being of the class or kind of merchandise that is principally used for Christmas trees. Net light sets, of which style number 76-756M is a kind, falls into this category. See, e.g., NY I83486, dated August 5, 2002. As a result, style number 76-756M remains classified under subheading 9405.40.80, HTSUS, which provides for “Other electric lamps and lighting fittings: Other.”
HOLDING:
Under the authority of GRI 1, the electric light sets, style numbers 82505WM, 78-971M, and 66-596M, are classified in subheading 9405.30.00, HTSUS, which provides for “Lighting sets of a kind used for Christmas trees.” The 2010 column one general rate of duty is 8% ad valorem.
Style number 76-756M continues to be classified under subheading 9405.40.80, HTSUS, which provides for “Other electric lamps and lighting fittings: Other.” The 2011 column one general rate of duty is 3.9% 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 internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY I83131, dated July 10, 2002, is MODIFIED. 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 and Trade Facilitation Division