OT:RR:CTF:TCM W968029 HMC
Mr. Jason Coggin
KDA Marketing Inc.
2345 Thornberry Dr.
Lawrenceville, GA 30044
Re: Day-N-ites™ Banner with Electroluminescent Wire; Reconsideration of New York Ruling L88161, Affirmed
Dear Mr. Coggin:
This is in response to your letter, dated November 1, 2005, on behalf of KDA Marketing Inc., concerning the classification under the Harmonized Tariff Schedule of the United States (“HTSUS”), of the Day-N-ites™ Banner with Electroluminescent Wire, and your associated request for reconsideration of New York Ruling (“NY”) L88161, dated October 20, 2005, issued by Customs and Border Protection (“CBP”).
FACTS:
On October 5, 2005, you requested that CBP provide you with a classification ruling for the Day-N-ites™ banner (hereinafter referred to as “the banner”), a driver, a transformer, a wood pole and a metal bracket, which will be imported as a set. You also requested classification of the individual items, if imported separately. The banner is described by its packaging as a “rugged nylon and polyester banner[ ] that feature[s] a unique flexible and unbreakable electro-luminescent [“EL”] wire instead of glass that, at night, creates a continuous line of brilliant color, like a neon sign.” The packaging and sample submitted shows that the banner is approximately 28” x 40” and has a decorative appliqué on one side. The appliqué is a combination of a drawing of a waiving stars-and-stripes and the words “GOD BLESS THE USA” underneath. The stars-and-stripes motif encompasses more than half of the banner’s space. The EL wire outlines the “USA” word, which is in a larger typeface immediately underneath the words “GOD BLESS THE,” and expands the whole area of the words on top, as shown in the picture of the item below:
The top portion of the banner is folded and sewn to form a channel for a wood pole, which is inserted through the channel and secured with a metal bracket. The EL wire exits the banner from the top channel and has a plug that is designed to connect to a driver, which in turn is designed to connect to a transformer. When the merchandise is connected to an outlet, the word “USA” lights up and may be visible at night.
In NY L88161, dated October 20, 2005, in response to your original ruling request, CBP provided a classification of the banner imported as a set. NY L88161 held that the banner set or the banner alone was classifiable under subheading 6307.90.85, HTSUS. It also held that the transformer for the banner is classifiable under subheading 8504.40.95, HTSUS. You contend that the banner is classifiable under subheading 9405.40.80, HTSUS. We note that subheading 9405.60, HTSUS, is another possible classification subheading for the subject merchandise.
ISSUE:
Whether the banner is classifiable as wall banners, of man-made fibers of subheading 6307.90.85, HTSUS, or as other electric lamps and lighting fittings, other than of base metal of subheading 9405.40.80, HTSUS, or other illuminated signs, illuminated nameplates and the like of subheading 9405.60, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS, in accordance with the General Rules of Interpretation (GRIs). GRI 1 states, in part, that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 6 states that the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and mutatis mutandis, to [rules 1 through 5], on the understanding that only subheadings at the same level are comparable.
You contend that the banner is classifiable as other electric lamps and lighting fittings, other than of base metal, of subheading 9405.40.80, HTSUS, on the premise that the lighting components in the banner impart the essential character to the banner and the other items imported as a set. We note that the banner may also be classifiable as other illuminated signs, illuminated nameplates and the like of subheading 9405.60, HTSUS. NY L88161 found the banner set to be classifiable as wall banners, of man-made fibers of subheading 6307.90.85, HTSUS. There is no dispute that the banner and other items imported together are a set under the HTSUS, and the banner imparts the essential character to the set. Also, there is no dispute that the banner is a composite good partly described by headings 6307 and 9405, HTSUS.
The HTSUS subheadings under consideration for the banner are, as follows:
Other made up articles, including dress patterns:
* * *
Other:
* * *
Wall banners, of man-made fibers….
* * * *
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:
* * *
Other electric lamps and lighting fittings:
Of base metal:
* * *
9405.40.80 Other….
* * *
Illuminated signs, illuminated nameplates and the like:
GRI 3(a) states that when, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, 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.
GRI 3(b) states that 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. As there is no dispute that the banner is a composite good, the issue is then whether the textile component with the appliquéd motif imparts the essential character to the banner or whether the lighting components impart the essential character.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. CBP believes the ENs should always be consulted. See T.D. 89 80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Explanatory Note (VIII) to GRI 3(b) states that 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.
In NY L88161, CBP determined that the textile component imparts the essential character to the banner because the EL component in the banner does not create sufficient light to be considered a decorative light. In your reconsideration request, you contend that the essential character of the banner is imparted by the illuminating elements and electronics because they constitute 67% of the total product value. You also claim that the EL wire is designed to light up and be viewed at night and it will create sufficient light to be considered a decorative light. You also state that 50% of the banner’s use will be at night. We however agree with the determination in NY L88161 that the textile component imparts the essential character to the subject banner.
In this instance, we are of the view that the textile component, depicting an appliqué of the stars-and-stripes and words “GOD BLESS THE USA,” imparts the essential character to the banner, inasmuch as, in this instance, the textile component and its decorative appliqué motif make up the bulk of the banner. The stars-and-stripes portion on the top part of the banner is not lighted and occupies a larger surface area of the banner, while the lighted words “USA” occupy a smaller portion of the banner. Also, the textile component can be used, day or night, regardless of the EL wire. It is the textile component as a whole that provides the banner’s identity and its decorative function and thus its essential character. The lighting components simply help enhance the banner’s decorative motif. See HQ 959844, dated October 30, 1996, for a similar finding.
To support your claim that the banner is classifiable as other electric lamps and lighting fittings, other than of base metal of subheading 9405.40.80, HTSUS, you cite NY ruling I82806, dated June 21, 2002, in which CBP classified a “Mystical Boo Banner” that consisted of an electrical wire harness with 20 sockets containing miniature orange light bulbs. In that ruling, CBP determined that the merchandise was classifiable under subheading 9405.40.80, HTSUS. The merchandise of NY I82806 is however distinguishable from the subject banner, in that the merchandise in that ruling incorporated miniature light bulbs and produced more light than the EL wire of the subject banner. As stated above, the light output of the EL wire on the word “USA” is of low output and simply enhances the banner’s function as a decorative flag. Thus, unlike the merchandise of NY ruling I82806, the textile component, in this instance, imparts the essential character to the banner. We therefore find that the banner is classifiable in heading 6307, HTSUS. Specifically, the banner is classifiable under subheading 6307.90.8500, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Wall banners, of man-made fibers.” Accordingly, NY L88161 is affirmed.
HOLDING:
By application of GRI 3(b), the banner is classifiable in heading 6307, HTSUS. It is specifically classifiable under subheading 6307.90.8500, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Wall banners, of man-made fibers” with a column one general duty rate of 5.8%. 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/.
NY L88161, dated October 20, 2005, is affirmed.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division