HQ 963903

July 27, 2001

CLA-2 RR:CR:TE 963903 RH

CATEGORY: Classification

TARIFF NO.: 4819.20.0040

Port Director

U S. Customs

1901 Cross Beam Drive

Charlotte, NC 28217

RE: Tariff Classification of a Folding Carton; Heading 4819; Protest
Number

1512-99-100077

Dear Sir:

This is in reply to the Application for Further Review of Protest
1512-99-100077

that you forwarded to our office for review. The law firm of Rode &
Qualey timely filed the protest on behalf of CDE Cartondruck U.S.A.,
Inc., against the liquidation of one entry of paperboard containers
imported from Germany.

FACTS:

The merchandise in question is a paperboard container that will be used
as a gift box by Coty Inc., a cosmetic company. After importation men's
toiletry products are inserted into the container for retail sale. The
container is six sided and measures approximately 7½ inches high when
the lid is closed, and approximately 4 inches by 5 inches at the base
and top. Flat and folded, it measures 14 inches by 7 inches. It is
colored and surface-decorated with the name, picture and weight of the
"JOOP" shower gel and eau de toilette. Additionally, the carton has two
inserts of the same color that are designed to fit into the carton and
hold the shower gel and eau de toilette in place.

Customs classified the carton and inserts as folding cartons under
subheading 4819.20.0040 of the Harmonized Tariff Schedule of the United
States (HTSUS). The protestant claims that the merchandise is
classifiable under subheading 4819.50.4060, HTSUS, as other packing
containers.

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At the time of liquidation, merchandise classifiable under subheading
9903.08.10 (affecting articles in subheading 4819.20, HTSUS), was
subject to 100 percent *ad valorem* duties imposed on a list of products
of certain member states of the European Community (EC) as a result of
the EC's failure to implement the recommendations and ruling of the
World Trade Organization (WTO) Dispute Settlement Body concerning the
EC's regime for the importation, sale and distribution of bananas.

The termination of increased duties is effective with respect to
articles entered, or withdrawn from warehouse, for consumption, on or
after July 1, 2001, except that the termination of increased duties on
subheading 4911.91.2020, HTSUS, is effective with respect to articles
entered, or withdrawn from warehouse, for

consumption, on or after March 3, 1999, for which unliquidated entries
or entries subject to timely protest are pending before Customs. A copy
of the Federal Register notice is attached.

ISSUE:

What is the correct tariff classification of the Cartondruck container
and inserts described above?

LAW AND ANALYSIS:

Classification under the 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.

In interpreting the headings and subheadings, Customs looks to the
Harmonized Commodity Description and Coding System Explanatory Notes
(EN), which are not legally binding, but are recognized as the official
interpretation of the Harmonized System at the international level. It
is Customs practice to follow, whenever possible, the terms of the EN
when interpreting the HTSUS.

Heading 4819 encompasses:

Cartons, boxes, cases, bags and other packing containers, of paper,
paperboard, cellulose wadding or webs of cellulose fibers; box files,
letter trays, and similar articles, of paper or paperboard of a kind
used in offices, shops or the like.

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The EN to the first part of the heading (before the semicolon) covering
"Cartons, boxes, cases and other packing containers" reads:

This group covers containers of various kinds and sizes generally used
for the packing, transport, storage or sale of merchandise, whether or
not also having a decorative value. The heading includes cartons, boxes,
cases, bags, cones, packets, casks, paperboard drums (containers),
whether manufactured by rolling or by any other method, and whether or
not fitted with reinforcing circular bands of other materials, tubular
containers for

posting documents, protective garment bags, jars, pots and the like
(e.g., for milk or cream), whether or not waxed. The heading also covers
special purpose paper bags such as bags for vacuum cleaners, bags for
travel sickness, and record boxes and sleeves.

Counsel does not dispute classification of the merchandise at the
4-digit heading level, but argues that it does not fit the description
of a folding carton, box or case under subheading 4819.20, HTSUS. The EN
to heading 4819 states that folding carton, boxes and cases are:

cartons, boxes and cases in the flat in one piece, for assembly by

folding and slotting (e.g., cake boxes);

and

containers assembled or intended to be assembled by means of glue,
staples, etc., on one side only, the construction of the container
itself providing the means of forming the other sides, although, where
appropriate, additional means of fastening, such as adhesive tape or
staples may be used to secure the bottom or lid.

We disagree with counsel that the merchandise cannot be classified as a
folding carton, box or case because it has a more complex construction
than the "cake box" example in the EN. In our opinion, the carton meets
the terms of subheading 4819.20, HTSUS. It is in one piece (single sheet
of paperboard) and is imported in a flattened, prefolded or creased
condition. It is assembled into a shaped carton by gently pressing the
prefolded sides and inserting the slotted tabs into the top, bottom and
side of the carton. The carton is used in the storage and sale of
merchandise. Moreover, there is no limiting language in the tariff
provision or legal notes to preclude classification in subheading
4819.20, HTSUS, where, as in this case, the carton is folded on each end
and glued so that when assembled it has two compartments. Accordingly,
we find that the Cartondruck container is the type of merchandise
covered by the first part of heading 4819, and more specifically, as a
folding carton in subheading 4819.20.0040, HTSUS.

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The carton is imported unassembled along with two inserts. GRI 2(a)
states that any reference in a heading to an article shall be taken to
include a reference to that article incomplete or unfinished, provided
that, as entered, the incomplete or unfinished article has the essential
character of the complete or finished article. It shall also include a
reference to that article complete or finished (or falling to be
classified as complete or finished by virtue of this rule), entered
unassembled or disassembled. EN (V) to GRI 2(a), at page 2, states that

The second part of Rule 2(a) provides that complete or finished articles
presented unassembled or disassembled are to be classified in the same
heading as the assembled article. When goods are so presented, it is
usually for reasons such as requirements or convenience of packing,
handling or transport.

The inserts are prefolded with tabs to fit perfectly into the carton and
to hold the shower gel and eau de toilette in place and are the same
color as the carton. The carton and inserts are imported in a flattened
condition presumable for convenience of packing, handling or transport.
Therefore, in accordance with GRI 2(a), we would classify the
unassembled inserts in the same provision as the carton.

The protestant also states that the calculation of the additional duties
under

subheading 9903.08.10, HTSUS, was incorrect. The protestant raised the
same

issue in a different protest, number 1001-99-105979, which Customs
addressed

in Headquarters Ruling Letter (HQ) 547677, dated June 30, 2000. A copy
of that

decision is enclosed for your convenience and should be followed in
calculating

the value of the instant merchandise.

HOLDING:

The CDE Cartondruck container at issue and the two inserts are
classifiable under subheading 4819.20.0040, HTSUS, as an other folding
carton of paperboard. Articles classifiable under that tariff provision
were subject to 100 percent duty at the time of importation under
subheading 9903.08.10, HTSUS, pursuant to temporary trade legislation.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065,
dated August 4, 1993, Subject: Revised Protest Directive, you are to
mail this decision, together with the Customs Form 19, to the protestant
no later than 60 days from the date of this letter. Any reliquidation of
the entry or entries in accordance with the decision must be
accomplished prior to mailing the decision.

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Sixty days from the date of the decision, the Office of Regulations and
Rulings will make the decision available to Customs personnel, and to
the public on the Customs Home Page on the World Wide Web at
www.customs.ustreas.gov, by means of the Freedom of Information Act, and
other methods of public distribution.

Sincerely,

John Durant, Director

Commercial Rulings Division