HQ 961095

July 20, 1998

CLA-2 RR:CR:GC 961095 PH

CATEGORY: Classification

TARIFF NO.: 3307.90.00; 9405.50.40; 9801.00.10

Mr. William Velasquez

Import/Export Coordinator

Endar Corporation

43195 Business Park Drive

Temecula, California 92590-3697

RE: \"Potpourri gift set\"; bell-shaped glassware with metal stand

and potpourri; candle holder; glassware for table, kitchen,

toilet, office, indoor decoration; packaging; U.S.-origin

goods returned; principal use; essential character;

composite good; goods put up in sets for retail sale; GRI

3(b); U.S. Additional Note 1(a); U.S. Note 1, Chapter 98;

ENs Rule 3(b)(VIII); Rule 3(b)(IX); Rule 3(b)(X);

Superscope, Inc. v. U.S.; Better Home Plastics Corp. v.

U.S.; TD 91-7; CSDs 89-26; 90-66; HQs 089470; 955857; NY

888716

Dear Mr. Velasquez:

This is in reference to your request to the Area Director of

Customs, New York, N.Y., dated July 18, 1997, for a ruling as to

the tariff classification under the Harmonized Tariff Schedule of

the United States (HTSUS) of a \"potpourri gift set\". A sample

was provided. Your letter was referred to this office for reply.

We regret the delay.

FACTS:

The merchandise consists of a bell-shaped (rounded bottom,

cylinder shaped body, with a graduated lip) article of clear

glass with a metal stand and a package of \"Botanique Potpourri\",

all packaged in a cardboard display box. The top diameter of the

glassware is 4\" and the inside diameter of the body (not

including the rim) is approximately 2 1/2\". The height or depth

of the glassware is approximately 4\". The stand, appearing to be

of coated iron or steel, consists of a ring into which the

glassware fits and onto which are attached three straight legs

with feet at the base. The ring portion of the stand is

approximately 3 1/2\" in diameter and the stand is approximately

6\" in height. The \"potpourri\" material consists of dried roses,

leaves, and similar matter, wrapped in a cellophane package

closed with a lace-like ribbon. The dimensions of the package

are approximately 3\" X 4\" X 6\". These articles are assembled in

a cardboard display container (opened in front, with cut-out

portions into which the articles fit). The container is

decorated with flower prints on a white and green background and

is labeled \"Potpourri GIFT SET\".

You state that the potpourri is of U.S. origin and that it

is shipped from the U.S. to Mexico as \"finished bagged potpourri\"

and that no further processing occurs in Mexico. The container

is also stated to be of U.S. origin. The glassware and stand are

stated to be of Mexican origin. You state that a North American

Free Trade Agreement (NAFTA) certificate will be provided at the

time of importation into the U.S. (you do not request a ruling

pertaining to NAFTA treatment and this ruling does not address

such treatment).

The values of the components are: potpourri - \$.474;

glassware - \$.325; metal stand - \$.350; container - \$.630;

packing and labor - \$.359.

The subheadings under consideration are as follows:

3307.90.00 Pre-shave, shaving or after-shave preparations,

personal deodorants, bath preparations,

depilatories and other perfumery, cosmetic or

toilet preparations, not elsewhere specified or

included; prepared room deodorizers, whether or

not perfumed or having disinfectant properties:

\... Other.

The 1998 general column one rate of duty for goods classifiable

under this provision is 5.4% ad valorem; goods of Mexico

qualifying for NAFTA treatment are duty-free.

7013.99.50 Glassware of a kind used for table, kitchen,

toilet, office, indoor decoration or similar purposes (other than that
of heading 7010 or 7018): \... Other glassware: \... Other: \... Other:

\... Other: \... Valued over \$0.30 but not over \$3

each.

The 1998 general column one rate of duty for goods classifiable

under this provision is 30% ad valorem; that for goods of Mexico

qualifying for NAFTA treatment is 20% ad valorem.

7323.99.90 Table, kitchen or other household articles and

parts thereof, of iron or steel; \...: Other: \...

Other: \... Not coated or plated with precious

metal: \... Other: \... Other.

The 1998 general column one rate of duty for goods classifiable

under this provision is 3.4% ad valorem; goods of Mexico

qualifying for NAFTA treatment are duty-free.

9405.50.40 Lamps and lighting fittings including searchlights

and spotlights and parts thereof, not elsewhere specified or included;
\...: \...

Non-electrical lamps and lighting fittings: \...

Other: \... Other.

The 1998 general column one rate of duty for goods classifiable

under this provision is 6.3% ad valorem; goods of Mexico

qualifying for NAFTA treatment are duty-free.

9801.00.10 Products of the United States when returned after

having been exported, without having been advanced

in value or improved in condition by any process

of manufacture or other means while abroad.

Goods classifiable under subheading 9801.00.10 receive duty-free

treatment.

ISSUES:

\(1\) Whether the packaged bell-shaped glassware with metal

stand and potpourri is classifiable as other preparations for

perfuming or deodorizing rooms in subheading 3307.90.00, HTSUS,

glassware of a kind used for indoor decoration or similar

purposes in subheading 7013.99.50, HTSUS, other table, kitchen or

other household articles of iron or steel in subheading

7323.99.90, HTSUS, or other non-electrical lamps and lighting

fittings in subheading 9405.50.40, HTSUS.

\(2\) Whether the components which are products of the U.S.

may qualify for duty-free treatment under subheading 9801.00.10,

HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff

Schedule of the United States (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. Pursuant to

GRI 3(b), when 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) \[by reference to the heading which

provides the most specific description\], 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 Harmonized Commodity Description and Coding System

Explanatory Notes (ENs) 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. Customs believes the ENs should

always be consulted. See Treasury Decision (TD) 89-80, published

in the Federal Register August 23, 1989 (54 FR 35127, 35128).

U.S. Note 1, Chapter 98, HTSUS, provides that:

The provisions of this chapter are not subject to the rule

of relative specificity in \[GRI\] 3(a). Any article which is

described in any provision in this chapter is classifiable

in said provision if the conditions and requirements thereof

and of any applicable regulations are met.

In Superscope, Inc. v. United States, 13 CIT 997, 727 F.

Supp. 629 (1989), the Court held that certain glass panels of

U.S. origin that were exported, repacked abroad with certain

foreign components, and returned, without being advanced in value

or improved in condition while abroad, to the U.S. as part of

unassembled audio cabinets were entitled to duty-free entry under

the predecessor to subheading 9801.00.10, HTSUS (item 800.00,

Tariff Schedules of the United States (TSUS)). Customs has taken

the position that, \"since TSUS item 800.00 and relevant Schedule

8, TSUS, headnotes were carried over virtually unchanged into the

HTSUS\", the decision in Superscope is equally applicable to

similar situations arising under the HTSUS (Customs Service

Decision (CSD) 90-66; see also TD 91-7).

TD 91-7 is an interpretative rule setting forth the position

of Customs in regard to, among other things, the dutiable status

of sets, mixtures, and composite goods when a portion thereof

consists of American-made goods returned to the U.S. In addition

to stating that Superscope applies under the HTSUS, the TD stated

it to be Customs position that (in pertinent part):

\... \[A\] set or mixed or composite goods can exist, within

the meaning of GRI 3(b), even though a portion of the

collection consists of American goods returned. \... GRI

3(b) (and, if applicable, GRI 3(c)) should be used to

determine the tariff classification of a set or mixed or

composite goods where a portion of the collection consists

of materials or items qualifying for subheading 9801.00.10,

HTSUS, treatment. \... With respect to GRI 3(b), \... \[if\] an

item in a set not imparting the essential character to the

set qualifies for free entry under subheading 9801.00.10,

HTSUS \... only the U.S.-origin item will receive free

treatment under this tariff provision while the remainder of

the set will be dutiable at the rate applicable to the

foreign-origin item which imparts the essential character to

the set. \... \[W\]hen the item qualifying for subheading

9801.00.10, HTSUS, treatment imparts the essential character

to the set \... the use of GRI 3(b) or, if applicable 3(c),

to classify sets or mixed or composite goods should be

accomplished without reference to the eligibility of certain

of the materials or components contained therein for

subheading 9801.00.10, HTSUS, treatment.

In an example of the latter situation (a set or composite

good consisting of a component qualifying for subheading

9801.00.10, HTSUS, treatment and a non-qualifying component with

the qualifying component providing the essential character of the

set or composite good), TD 91-7 makes clear that classification

of the set or composite good is under the HTSUS classification in

Chapters 1 through 97, HTSUS, for the qualifying component. That

is, the qualifying component receives duty-free treatment under

subheading 9801.00.10, HTSUS, but, under GRI 3(b), imparts its

classification (in Chapters 1 through 97, HTSUS) to the set or

composite good. To paraphrase TD 91-7, \"\[t\]he practical effect

of applying GRI 3(b) in this manner is that the foreign-made

\[non-qualifying component is\] assessed duties at the rate

application to the \[qualifying component\] as if this item were

ineligible for subheading 9801.00.10, HTSUS, treatment.\"

Subheadings 7013.99.50, 7323.99.90, and 9405.50.40, HTSUS,

as applicable to the merchandise under consideration, are

controlled by use (other than actual use) (see Group Italglass

U.S.A., Inc. v. United States, 17 CIT 1177, 839 F. Supp. 866

(1993); E.M. Chemicals v. United States, 923 F. Supp. 202 (CIT

1996); Stewart-Warner Corp. v. United States, 3 Fed. Cir. (T) 20,

25, 748 F.2d 663 (1984)). In such provisions, articles are

classifiable according to the use of the class or kind of goods

to which the articles belong. If an article is classifiable

according to the use of the class or kind of goods to which it

belongs, Additional U.S. Rule of Interpretation 1(a), HTSUS,

provides that:

In the absence of special language or context which

otherwise requires\-- (a) 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.

In other words, the article\'s principal use in the U.S. at

the time of importation determines whether it is classifiable

within a particular class or kind (principal use is distinguished

from actual use; a tariff classification controlled by the latter

is satisfied only if such use is intended at the time of

importation, the goods are so used and proof thereof is furnished

within 3 years after the date the goods are entered (U.S.

Additional Note 1(b); 19 CFR 10.131 - 10.139)).

The Courts have provided factors, which are indicative but

not conclusive, to apply when determining whether merchandise

falls within a particular class or kind. They include: general

physical characteristics, expectation of the ultimate purchaser,

channels of trade, environment of sale (accompanying accessories,

manner of advertisement and display), use in the same manner as

merchandise which defines the class, economic practicality of so

using the import, and recognition in the trade of this use. See

Lenox Collections v. United States, 19 CIT 345, 347 (1995);

Kraft, Inc, v. United States, 16 CIT 483 (1992), G. Heileman

Brewing Co. v. United States, 14 CIT 614 (1990); and United

States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d

373 (1976), cert. denied, 429 U.S. 979 (1976).

This office recently has exhaustively reviewed the principal

use of articles such as those under consideration (glassware in

various forms contended to be principally used as candle

holders). In the March 25, 1998, edition of the CUSTOMS

BULLETIN, Volume 32, Number 12, page 32, Customs issued a notice

under 19 U.S.C. 1625 proposing to modify or revoke two

Headquarters and five New York ruling letters (including the

ruling you cite, New York Ruling Letter (NY) 888716 dated August

20, 1993), to classify the articles described therein as other

glassware of a kind used for indoor decoration or similar

purposes in subheading 7013.99, HTSUS, instead of as candle

holders in subheading 9405.50.40, HTSUS. The comments submitted

in response to this notice provided considerable information

regarding the \"pertinent factors\" (see above) related to the

principal use of the class or kind of goods to which the goods

considered in the proposed rulings belong. Based on this

information, Customs has concluded that the class or kind for

goods such as those under consideration is defined by the form or

shape of the article (e.g., bell-shape, similar to bell-shape,

flower pot shape, tulip or flower petal shape, cube or rectangle

shape, disk shape, bowl shape, and other shapes) and its size.

We have found there to be a clear distinction between glassware

used as candle holders and that used for general indoor

decoration based on the size of the articles, in the absence of

other pertinent evidence or information. Glassware with an

opening of 4 inches or less in diameter and a height or depth of

5 inches or less is used substantially more frequently as a

candle holder than for any other purpose, according to the

information we have obtained, and larger glassware is used

substantially more frequently for general indoor decoration. See

the July 15, 1998, edition of the CUSTOMS BULLETIN, Volume 32,

Number 28, page 12, wherein the March 25, 1998, CUSTOMS BULLETIN

notice was withdrawn.

The glass component of the article under consideration is

bell-shaped and made of relatively thin clear glass. It has a

top diameter of 4\", an inside diameter of approximately 2 1/2\",

and a height or depth of approximately 4\". This article is of a

form and size, based on the above-described information, which

indicates its inclusion in the class or kind of goods principally

used as candle holders. This is consistent with the pertinent

factors listed by the Courts for determining principal use (see

above). That is, in regard to physical characteristics, the

small size of the opening prevents easy access and the overall

appearance of the article provides, in the words of advertising

literature for similar articles, \"\[a\] dramatic display for

candles\". In regard to the other pertinent factors (expectation

of ultimate purchasers; channels of trade; environment of sale;

and usage, economic practicality of such usage, and recognition

of the trade of such usage), the evidence obtained from the

public in response to the March 25, 1998, Customs Bulletin notice

supports principal use of the articles as candle holders.

Accordingly, the glassware and metal stand, by themselves,

would be classifiable as non-electrical lamps and lighting

fittings in subheading 9405.50.40, HTSUS. However, the glassware

and metal stand, as imported, are packaged with the potpourri in

a \"potpourri gift set.\" The potpourri, by itself, would be

classifiable in subheading 3307.90.00, HTSUS (HQs 089470 dated

August 27, 1991, and 955857 dated August 11, 1994). The

glassware and metal stand, packed with the package of potpourri

for sale, make up \"goods put up in sets for retail sales\" for

purposes of GRI 3(b) (see EN Rule 3(b)(X)). The goods making up

the set are, prima facie, classifiable under different headings.

Therefore, under GRI 3(b), classification of the set is

determined on the basis of the component which gives it its

essential character. EN Rule 3(b)(VIII) lists as factors to help

determine the essential character of such goods the nature of the

materials or components, their bulk, quantity, weight or value,

and the role of a constituent material in relation to the use of

the goods.

Recently, there have been several Court decisions on

\"essential character\" for purposes of GRI 3(b). Better Home

Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996),

affirmed 119 F.3d 969 (Fed. Cir. 1997), involved the

classification of shower curtain sets, consisting of an outer

textile curtain, inner plastic magnetic liner, and plastic hooks.

Customs had classified the sets on the basis of the textile

curtain under the \"default rule of GRI 3(c)\", after determining

that neither the relative specificity test nor the essential

character test was applicable (119 F.3d at 971). The CIT found

that the plastic liner performed the indispensable function of

keeping water inside the shower and therefore held that the

plastic liner imparted the essential character upon the set. In

its decision affirming the CIT decision, the CAFC stated:

The \[CIT\] carefully considered all of the facts, and, after

a reasoned balancing of all the facts, concluded that Better

Home Plastics offered sufficient evidence and argument to

overcome the presumption of correctness. The court

concluded that the indispensable function of keeping water

inside the shower along with the protective, privacy and

decorative functions of the plastic liner, and the

relatively low cost of the sets all combined to support the

decision that the plastic liner provided the essential

character of the sets. \... The court\'s decision did not

rely solely, or even hinge, on the indispensability of the

water-retaining function. The decision was substantially

based on the importance of the other functions as well as

the cost of the entire set. \[119 F.3d at 971\]

Other decisions in which the Court looked primarily to the

role of the constituent material in relation to the use of the

goods to determine essential character include Mita Copystar

America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997),

motion for rehearing and reconsideration denied, 994 F. Supp. 393

(CIT 1998), and Vista International Packaging Co., v. United

States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also,

Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), in

which the Court found that, although GRI 3(b) could not be

applied, if a GRI 3(b) analysis were performed, the essential

character would be based upon the composite good\'s function.

Based on the foregoing, we conclude that in an essential

character analysis for purposes of GRI 3(b), the role of the

constituent material or components in relation to the use of the

goods is generally of primary importance, but the other factors

listed in EN Rule 3(b)(VIII) should also be considered, as

applicable. In this case, the \"indispensable function\" (Better

Home Plastics, supra) of the set, used to determine the role of

the constituent material or components in relation to the use of

the goods, is not conclusive. That is, the function of potpourri

is to release scent and the role of the glassware and stand is to

hold the potpourri. However, as established above by the

principal use analysis, the glassware and stand may also be used

for other purposes, such as to hold a candle. By its nature,

potpourri loses its ability to provide scent and is discarded and

replaced. Thus, the glassware and stand component of the set

could continue to be used, whether to hold potpourri or a candle

or for some other use, after the potpourri is no longer usable

(in this regard, we note that your company markets individual

potpourri packages like that in the set).

The other factors listed in EN Rule 3(b)(VIII), however, may

be used to establish essential character. Quantity is not

relevant (i.e., there is one of each component). Although the

bulk of the potpourri is approximately the same as that of the

glassware and stand (in the sense of the space taken by each

component), the weight and value of the glassware and stand are

considerably greater than those of the package of potpourri (we

note that in both Better Home Plastics decisions, the Court took

note of value as a factor in the determination of essential

character (916 F. Supp. 1268; 119 F.3d at 971). Accordingly, we

conclude that the essential character of the set is provided by

the glassware and stand. The set is classifiable as other non-electrical
lamps and lighting fittings in subheading 9405.50.40,

HTSUS.

This conclusion is distinguished from HQ 955857, referred to

above, in which glass vases filled with potpourri with the

opening of the vases covered with lace and secured by a

decorative ribbon and artificial flower glued in place were

classified as other glassware of a kind used for table, kitchen,

toilet, office, indoor decoration or similar purposes in

subheading 7013.99.50, HTSUS. In that case, the value of the

potpourri was substantially greater than that of the vase, lace,

and ribbon and flower. Furthermore, the fact that the cover was

relatively permanently secured with a cover which would permit

the scent to escape indicated a dedication of the article to use

as a potpourri holder and scent releaser. Even in the face of

these facts, HQ 955857 found that it was impossible to positively

ascertain which of the components imparted the essential

character to the potpourri vase and classification was on the

basis of GRI 3(c).

Although the set is classifiable in subheading 9405.50.40,

HTSUS, pursuant to U.S. Note 1, Chapter 98, HTSUS (see also

Superscope, supra, CSD 90-66, and TD 91-7), the U.S.-origin

potpourri may qualify for duty-free treatment under subheading

9801.00.10, HTSUS, assuming that the requirements of the

subheading and the applicable regulations (see 19 CFR 10.1 et

seq.) are met. The U.S.-origin packing also may qualify for

duty-free treatment under subheading 9801.00.10, HTSUS, subject

to the same conditions (see CSD 89-26).

HOLDINGS:

\(1\) The packaged bell-shaped glassware with metal stand and

potpourri is classifiable as other non-electrical lamps and

lighting fittings in subheading 9405.50.40, HTSUS.

\(2\) The components which are products of the U.S. (the

potpourri and packaging) may qualify for duty-free treatment

under subheading 9801.00.10, HTSUS, provided that the

requirements of the subheading and applicable regulations are

met.

EFFECT ON OTHER RULINGS:

HQ 955857 dated August 11, 1994, DISTINGUISHED.

Sincerely,

John Durant, Director

Commercial Rulings Division