CLA-2 OT:RR:CTF:TCM H097658 LWF
Mr. Heidar Nuristani
Central Purchasing, Inc.
3491 Mission Oaks Blvd.
Camarillo, CA 93012
RE: Revocation of New York Ruling Letter (“NY”) N090938; Classification of a hole saw kit from China
Dear Mr. Nuristani:
This letter is in response to your request, dated March 1, 2010, for the reconsideration of New York Ruling Letter (“NY”) N090938, dated February 10, 2010, concerning the classification of a bi-metal hole saw kit (SKU #93421) from China. In NY N090938, U.S. Customs and Border Protection (CBP) classified the kit in subheading 8207.50.20, Harmonized Trade Schedule of the United States (HTSUS), which provides for “Interchangeable tools for handtools, whether or not power-operated, or for machine-tools (for example, for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screwdriving), including dies for drawing or extruding metal, and rock drilling or earth boring tools; base metal parts thereof: Tools for drilling, other than for rock drilling, and parts thereof: With cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium.” CBP has reviewed NY N090938 and finds the ruling to be incorrect. Accordingly, for the reasons set forth below, we hereby revoke that ruling.
Notice of the proposed revocation was published in the Customs Bulletin, Vol. 46, No. 35, on August 22, 2012. CBP received one comment, dated August 24, 2012, in support of the notice of proposed action. The commenter asserted that NY J82340, dated March 25, 2003, concerns the classification of two door lock installation kits that are substantially similar to the merchandise at issue in NY N090938 and requested that CBP also revoke NY J82340 as it applies to the two kits. Upon review of NY J82340, CBP finds that the ruling does not involve merchandise that is substantially similar to the instant hole saw kit. Unlike the instant kit which contains six metal hole saws and one mandrel, each of the door lock installation kits discussed in NY J82340 only contain two metal hole saw and one mandrel. Additionally, as NY J82340 does not contain a material or value breakdown of the door lock installation kit components, CBP is unable to determine the essential character of the kits or conclude that the kits are substantially similar to the instant merchandise.
FACTS:
The merchandise at issue consists of a bi-metal hole saw kit (SKU #93421) (the “hole saw kit”) used to cut holes through drywall, wood, plastic, and metal. The hole saw kit includes six ¾” to 2½” steel hole saws, two ¼” and ?” mandrels permanently attached to steel pilot drills, and one threaded mandrel adapter. Each kit is imported in a hard-plastic carrying case that is designed to transport and protect the kit components.
You state that the value and material breakdown of the hole saw kit consists of the following: six steel hole saws (61% of value and 0.845kg); two mandrels with steel pilot drills (26% of value and 0.255kg).
ISSUE:
Whether the hole saw kit is classifiable at GRI 3(b) in heading 8202, HTSUS, as parts of saws, or at GRI 3(c) in heading 8207, HTSUS, as tools for power-operated handtools?
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 GRIs 2 through 6 may then be applied in order.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding or 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 (August 23, 1989).
GRI 3 provides, in relevant part:
When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
…
(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.
* * * * *
The 2011 HTSUS subheadings under consideration are as follows:
8202 Handsaws, and metal parts thereof; blades for saws of all kinds (including slitting, slotting or toothless saw blades), and base metal parts thereof:
Other saw blades, and parts thereof:
8202.99.00 Other (including parts)…
* * * * *
8207 Interchangeable tools for handtools, whether or not power-operated, or for machine-tools (for example, for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screwdriving), including dies for drawing or extruding metal, and rock drilling or earth boring tools; base metal parts thereof:
8207.50 Tools for drilling, other than for rock drilling, and parts thereof:
8207.50.20 With cutting part containing by weight over 0.2 percent of chromium, molybdenum, or tungsten or over 0.1 percent of vanadium…
* * * * *
The hole saw kit is classified as a “set” pursuant to GRI 3(b). GRI 3(b) states that “[g]oods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character.” See EN (X) to GRI 3(b). There is no dispute that the hole saws and mandrels are classifiable in different headings. The six hole saws are appropriately classified in heading 8202, HTSUS, as saw blades; and the two mandrels are appropriately classified in heading 8207, HTSUS, as tools for drilling. Furthermore, the kit is “put up together” to enable a user to carry out the specific activity of cutting holes through drywall, wood, plastic, and metal. Lastly, it is imported ready for retail sale, that is, in a hard-plastic carrying case designed to transport and protect the kit components. As such, the hole saw kit shall be classified as if it consisted of the material or component which gives the kit its essential character.
The “essential character” of an article is “that which is indispensable to the structure, core or condition of the article, i.e., what it is.” Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (Ct. Int’l Trade 2005). 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." Recent court decisions on the essential character for GRI 3(b) purposes have looked primarily to the role of the constituent material in relation to the use of the goods. See Estee Lauder, Inc. v. United States, No. 07-00217, 2012 Ct. Int’l Trade LEXIS 23, *17-18; Structural Industries, 360 F. Supp. 2d 1330; Conair Corp. v. United States, 29 C.I.T. 888 (2005); Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278 (Ct. Int’l Trade 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007).
The instant merchandise consists of six hole saws and two mandrels. As imported, the hole saws predominate in quantity, value, and bulk of the kit. Whereas the mandrels account for 26% of the value of the kit and weigh 0.225kg, the six hole saws account for 61% of the value of the kit and weigh approximately three times as much as the mandrels. Additionally, the primary purpose of the hole saw kit it to cut holes through drywall, wood, plastic, and metal. Insomuch as the hole saws are integral to the activity of cutting, the hole saws are indispensable to the condition of the merchandise. Consequently, we find that the components which impart the essential character of the hole saw kit are the hole saws.
The specially shaped, hard-plastic plastic carrying case in which the hole saw kit is imported is classifiable in accordance with GRI 5(a). Accordingly, the case is classified with the hole saw kits.
We note that our decision is distinguishable from Headquarters Ruling Letter (“HQ”) 963775, dated November 21, 2000. In HQ 963775, CBP addressed the classification of a lock installation kit consisting of a hole saw for cutting a hole for the lock mechanism, a wood spade bit for cutting a hole for the latch mechanism, and a mandrel pilot drill bit. As CBP was unable to determine whether the hole saw, wood spade bit, or mandrel imparted the lock installation kit with its essential character, CBP applied GRI 3(c) and classified the kit in heading 8207, HTSUS, that heading which comes last in numerical order amongst those headings that merit equal consideration. By contrast, the instant hole saw kit is put up for sale for the exclusive purpose of cutting holes and does not contain a wood spade bit to be used for boring or drilling. As discussed supra, the hole saws impart the kit with its essential character, and the hole saw kit is properly classified under heading 8202, HTSUS.
HOLDING:
By application of GRI 1, GRI 3(b), and GRI 5(a), the hole saw kit and carrying case is classified under heading 8202, HTSUS, specifically subheading 8202.99.00, HTSUS, which provides for “Handsaws, and metal parts thereof; blades for saws of all kinds (including slitting, slotting or toothless saw blades), and base metal parts thereof: Other saw blades, and parts thereof: Other (including parts).” The column one, general rate of duty under this provision in 2012 is free.
Duty rates are provided for convenience only 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 http://www.usitc.gov.
EFFECT ON OTHER RULINGS:
In accordance with the above analysis, NY N090938, dated February 10, 2010, is hereby REVOKED.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial Trade and Facilitation Division