Slip Op. 02-120 UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: RIC HARD K. EATO N, JUDGE

____________________________________ : AUTOMATIC PLASTIC MOL DING, : INC. , :

Plaintiff, : : v. : Court No. 99-06-00365

: UNITED STATE S , : : Defend ant. : ____________________________________: [Judgment entered for Plaintiff.] Decided: October 5 , 2002 Law Office of Geor ge R. Tu ttle, A P.C. ( Geo rge R. Tut tl e, III , Matthew K. Nakachi ), and Law Office of Michael J. Tonsing ( Michael J. Tonsing ), for Plaintiff. Robert D. McCallum, Jr. , Assistan t Attorne y G eneral ; John J. Mahon , Acting Attorney in Charge, Inte

rnational Trade Field Office, Commercia l Litigation Branch, Civil Division, United States Department of Justice ( Mikki Graves Walser ), for De fendant

.

OPINION EATON , Judge : Before the court is a dispute brought by Automatic Plastic Molding, Inc. (“Plaintiff”), challenging the c lassification by the United States Customs Service (“ Customs”) of certain glass containers (the “Me rchandise”). The court exercises jurisdiction pursuant to 19 U.S.C. § 158 1(a) (2 000) and , based o n the find ings of f act and c onclusion s of law se t forth below, enters judgment for Plaintiff, pursuant to USCI T R. 52(a) and 58.Court No. 99-06-00365 Page 2 BACKGROUND Plaintiff challenges the classification of two entries of the Merchandise imported in June and July of 1997, and liquidated by Customs in May of 1998. Customs classified the Merchandise as: “Glassware of a kind used for table, kitchen, . . . indoor decoration or similar purposes (other than that of heading 7010 or 7018)” under subheading 7013.39.20 of the Harmonized Tariff Schedule of the United States (1997) (“H TSUS”), entered at a duty rate of 27.8 per cent ad valorem . (Answe r ¶ 5.) As the import

er of re cord, Pla

intiff time ly f

iled prote sts as to thes e liquida

tions, whic

h protest s Customs de

nied on Ma

y 4, 1999. Fol lowing these denials, Plaintiff

commenc ed this action asse rting th at the Me

rchandi se is prop erly

classifi ed as: “Carboys, bottles, flasks, jars, pots, vials, ampoules and other containers, of glass, of a kind used for the c onvey

ance or packing of good s” under

HTSUS subhe ading 7 010.91.50 , which wo uld enter free. (Compl. ¶ 6.)

This case was trie d on April 2

–4, 2002, i

n New Yor

k City , and was

the subje ct of post

trial briefing. During the course of the trial the court heard testimony from four witnesses called by Plaintiff, and three w

itnesses called by the U

nited States Government (the “Government”) on behalf of Customs. Plaintiff’s witnesses were:

(a) William Pres ton, Chair man and Pa st Preside

nt, Automa

tic Plastic Molding, Inc., the Plaintiff importer and distributer of the Merchandise; (b) Roberto Del Bon, managing dire ctor of Vetrerie Bruni, the company that desig

ned, produced and supplied the Merchandise; (c) Dean Polik, President of Acme Foods, I nc., the companyCourt No. 99-06-00365 Page 3 that purc hased the Mercha ndise fr om Plaintif

f, packe d it with bisco tti and the

n sold the p acked Me

rchandi se to Costco Wholesale Corporation; and (d) Robert Cirrito, President of PROTEC Industries. Mr. Cirrito received his MBA from Barry University and wa s qualifie d as an expe

rt in the a rea of c ommercia

l glass containers used for packaging , and the process associated with the production of commercial glass containers used f or packagi ng. (Pretrial Order of 01/09/02, Schedule G-1.)

The Government’s witnesses were: (a) Rose Marie Lava, Na tional Import Specialist, National Commodity

Speciali st Division , United Sta tes Customs Service; (b) Elizabeth A. Vega, I mport Specialist, United States Customs Service; and (c) Dr. Sher

Paul Sing

h, a Profe ssor at Mic

higan Sta te University. Dr. Singh r

eceived his Ph.D from Michigan State University and wa s qualified as an expert in the area of the design, materials, and marketing of articles used for the conve ya nce or pa cking o f goods

. ( Id. , Schedule G-2.)

Here, the court m akes its f indings o f fact a

nd conclu sions of la

w as a re sult of a tr

ial de

novo . See 28 U.S.C. § 2 640(a) (2000) (“ The Court of In ternational Trad

e shall ma

ke its determinations upon the basi s of the r ecord ma de befor e [it] . . . .”) ; see also United States v. Mead Corp. , 533 U.S. 218, 233 n.16 (2001) (“Although Customs’s decision ‘is presumed to be correct’ on review, 28 U.S.C. § 2639(a)(1), the CIT ‘may

consider any

new ground’ even if notCourt No. 99-06-00365 Page 4

raised below, § 2638, and ‘shall make its determinations upon the basis of the recor d made before the cour t,’ rathe r than tha t develop ed by

Customs . . . . ”); Kraft, Inc. v. United States , 16 CIT 483, 484 (1992).

DISCUSSION I. Findings of Fact A. Facts Stipulated to by the Parties The Merc handise ( identifie d on the commercia l invoice s as Sty

le # 05856 P—Vaso Anfora [sic] Ottagon 4250 T 110) is a sty lized amphora-shaped clear glass conta iner measuring approximately 12.5 inches tall and 24 inches in circumference at its widest point, with two hookshaped h andles pr

otruding from the neck. The

Mercha ndise is ma

de of ord inary glass, a nd is manufactured by

machines that automatically f eed molten glass into molds and form the shape of the Merchandise by

the action of compressed air, has a volume of 4.25 liters, and a large opening with a lip or flange to hold a lid or cap measuring 110 millimeters in diameter. The invoice price paid by Plaintiff to the Mercha ndise’s supplier, Vetrerie Bruni, was approximately $1.53 for each container. Plaintiff sold the Merchandise to Acme Foods, I nc. (“Acme”) (a wholesale food company), whic

h in turn sold the Merchandise packed with twenty -two biscotti to Costco Wholesale Corporation (“Costco”) for approximately eleven to $12 each. Costco then resold the Merchandise packed with the biscotti to its retail customers for approximately $15 to $16.Court No. 99-06-00365 Page 5

1 “Lugs” a

re molded threads that grip a twist-on cap.

2 In Kraft , the cour

t explained : In the hot pack proce ss jams, jellies and other food products are heated and then poured into glass containers. Steam is then injected onto the top of the food product and a lid is fastened to the jar. The steam heats the sealing materia l inside the lid and, as the steam co ols, cre ates a va

cuum in the

jar which draws the lid tigh tly agains t the sea

ling sur face of the jar. The sea

l create d in this process preser ves the f ood produ

cts and a llows the c onsumer t

o readily dete

rmine whether the seal has been broken. Kraft , 16 CIT at 487. At trial, Plaintiff’s witness, Mr. Del Bon, stated tha t the Merchandise was designed to be used in the hot packing proce ss and that the Merchandise underwent thermoshock testing after manufacture. ( Tr. at 166:22–25.) Defendant’s witness, Dr. Singh, stated that the process identified as “hot packing” wa s normally refe rred to in the packaging industry as “hot filling” ( id. at 578:16–18); nonethelesss he also conceded that the terms “have been interchangeably

used” ( id. at 616:23–

24). Dr. Singh conducted n o tests on the Merch andise with respec t to h ot pac king ( id. at 565:11–13) and was unable to state with certainty as to whether the Merchandise could or could not be used in the hot packing pr ocess. ( Id. at 622:9.) The court finds Mr. Del Bon’s testimony c redible. B. Facts Established at Trial The court finds that the following facts were established by cre dible evidence at trial. The Merchandise’s “Finish” (which is the opening of the container, its sealing surface, a nd the glass l ugs 1 which grasp a properly sized closure to form a seal) is equal to the industry standard speci ficat ion o f 2070 and, w hen a s tanda rd siz ed clo sure i s twi sted o n, is capabl e of for ming a seal suf ficient f or the Me rchandi se to conv ey

food in a s anitary

manner. The Merc

handise i s capable of being used in the

“hot packing” p rocess 2

Upon sale

by Pl aintiff, the Merc

handise w as shippe d direct ly f rom the su

pplier to Acme for packing. Th e Merchandise w as never sold empty

to the publ ic, nor w as the Me rchandi se soldCourt No. 99-06-00365 Page 6

at wholesale for any

purpose other than that of being used as a c ontainer for convey ing or packing food.

Acme sold the final product as a seasonal gift f ood item to Costco. Acme selected the Merchandise because: (1) it was inexpensive; (2) it could hold approximately twenty-two biscotti; and (3) the Merchandise’s design was “ different than a . . . jar of peanut butter, or a jar of pickles, or a jar of . . . something that y ou buy three hundr

ed and sixty-five day

s a year , that you wouldn’t give

as a gift.” (Tr. at 278:17–21.) I n addition, Acme decided to use the Merchandise as a container for its biscotti because , unlike regular biscotti, this product was frosted and the glass allow ed the bis cotti to be display ed with its

frosting visible to c onsumers : “we felt that our biscotti [were] attractive. . . . And, we . . . wanted the potential buy er to see the product, so we wanted something clear. And the n, it just became a matter of try ing to find something that was attractive and inexpensive. ( Id. at 268:20–269:2.) Costco, in turn, resold the Merchandise packed with biscotti in its “seasonal aisle” toge ther with “maybe

thirty pallets of consumable gift food items.” ( Id. at 282:23, 283:5–6.) The Merchandise was never display ed or sold in an area where empty glassware, kitchen, or storag e containers were sold.

The twen ty- two biscot

ti (exclusi ve of the Mercha ndise) we re sold a t wholesa le to Acme for $5.50 and would be valued at retail at between $22 a nd $25.

C. The Court ’s Observ ation of the Mercha ndise The court’s examination of the Merchandise, and its comparison to the exhibits producedCourt No. 99-06-00365 Page 7

3 While the Merchandise packed with the biscotti was actually sold with a wooden lid rather than one that could twist on and make a sanitary seal, the fact that the Merchandise has a Finish that includes lugs capable of forming a sanitary se al when fitted with a properly sized closure is probat ive as to it s princip al use as a contai ner for the conve

ya nce or pa cking o f goods

. at trial, confirms that the glass lugs render the Merchandise’s Finish unattractive when paire d with the wooden cap or lid with which it was sold. See Kraft , 16 CIT at 488 (“The bea r jars, at least because of the lug finish, the mold seam, and the utilities lid necessitated by the lug finish,

are not par ti cul arl y han dso me. ”). Wh en o ffe red for sal e, t he l ugs wer e co nce ale d by a rib bon . If the Merc handise w ere pla

ced on a kitchen t able or c ounter a

nd used fo

r food storage p

urposes, however, the lugs would not be conceale d and would be, thus, unsightly. More over, the examples of storage containers provided by the Government had Finishes that wer e approp riate for use w ith a wood

en cap o r lid 3 incapab le of for ming a sa nitary seal. No ne of the

exhibits produced by the

Government has a lug Finish. Nor is the Merchandise of the same quality as these exhibits. For example, Government Trial Exhibit P (a melon-shaped storage container) , although approximately the sa me size as the Merchandise, is made of glass more substantial than the Merchandise. In a

ddition, Government Trial Exhibits P and G (a smaller melon-shaped storage container) are

made of glass of a gre enish hue, and both have a more refined shape , which renders them more attractive and dec orative than the Merchandise. L astly, the Merchandise’s opening is smaller than that of both of these e xhibits, making the removal of the Mercha ndise’s c ontents mo re diffi cult than the remo val of the

contents of the exhi

bits.

II. Conclusions of Law This court has previously found he adings 7010.91.50 and 7013.39.20 to be “principalCourt No. 99-06-00365 Page 8

4 Indeed, Customs has concluded hea dings 7010 and 7013 are “principal use” tar iff provisions. See Treasury Decision 96-7; Tariff Classification of I mported Glassware: Change of Practice , 30 Customs Bulletin 30, 32, 61 Fed. Reg. 223, 224 (Jan. 3, 1996) (“Currently , tariff classifi cation un

der both s ubheadin g 7010.9 1.50 and 7 013.39, H TSUS, is det ermined by t he use of the class or kind of articles to which the imported merchandise be longs. As such, they are considered provisions controlled by Additional U.S. Rule of Interpretation 1(a), H TSUS. Customs pro

posed tha t subhead ings 701 0.91.50 a

nd 7013.39

would re main princ ipal use provision s. There fore, f

or an imported go od to be cl assifiab le in eithe r of thes e subhea

dings, it must be of a class or kind classifiable in these subheadings. Whether it is of the c lass or kind of articles classifiable in either subheading will be dete rmined by its principal use.”)

. use” provisions governed by the HTSUS Additional Rules of Interpretation (“ARI ”). See Group Italglass U.S.A., I

nc. v. United States , 17 CIT 226, 228 (1993) (“ Ital glass I ”). Neither Plaintiff nor the Government disputes this finding. (Pl.’s Post-Trial Mem. at 8; Def.’s Post-Trial Mem. at 22.) 4 Accordingly , the ARI provide:

1. In the absence of

special language or c ontext which otherwis e requir

es— (a) a tariff classification controlled by use (other than act ual use)is to be de

termined in accordance with the use in the United States at, or immediately prior to, the da te of importati on, of g oods of tha t class or kind to which the imported goods belong, and the controlling use is the principal use . . . . ARI 1 (a). Thu s, “[t]he pr incipal u se of the

class or kind of g oods to whi ch an import belong s is controlling, [and] not the principal use of the specific import.” E.M. Chems. v. United States , 20 CIT 382, 387–88, 923 F. Supp. 202, 208 (1996) ( citing Group Italglass, U.S.A., I nc. v. United States , 17 CIT 1177, 1177, 839 F. Supp. 866 (1993) (“ Ital gla ss II ”), see id. at 388, (“‘Principal use’ is defined as the use ‘which exceeds any other single

use.’ . . . As a result, ‘the fact that the merchandise may

have numerous significant uses does not prevent the Court fr om classifying the mercha ndise ac cording

to the prin

cipal use of the cl ass or kin

d to which

the merc handiseCourt No. 99-06-00365 Page 9

5 Following the decisions in Kraft , G. Heilman Brewing Co. v. United States , 14 CIT 614 (1990) and United States v. Carborundum Co. , 536 F.2d 373 (C.C.P.A. 1976), see Tariff Classific ation of I

mported G lasswar

e: Propose d Change

of Pract ice; Solic itation of

Comments , 59 Fed. Reg. 51,659, 51,659 (Oct. 12, 1994), Customs issued T.D. 96-7 , which states that the following characteristics

are indi cative, but not con clusive o f whethe

r a part icular glass article qualifies as part of the class “containe rs of glass of a kind used for the conve

ya nce or pa cking o f goods .” These charac teristic s would inc lude cont ainers o f all shap es and size s: 1. gener

ally having a larg e opening , a short neck (if any ) and as a rule, a l ip or flan

ge to ho ld the lid or

cap, mad e of ordi nary glass (colorless or colored) and manufacture d by machines which automatically fee d molten glass into molds where the finished articles are formed by

the action of compressed air; 2. in which the ultimate purchas er’s pr

imary expectat ion is to discard the container after the conve yed or pac

ked goods belong s.’” (c itations om

itted, emphasis in or

iginal) ). Final ly, “[a]lthoug h by statute Cu stoms’ classifi cation un

der subhe ading 7 013.39.20 must be de emed as presumptiv ely correct (28 U.S.C. § 2639(a )(1)), . . . plaint

iff automatically

overcomes the pr

esumption

of corr ectness attachin g to Customs’ c lassific ation unde r headin g 7013.3 9.20 simply

by e stablishin

g that its glassw are is classifiable under heading 7010.” Ital glass I , 17 CIT at 227.

The Gove rnment c ites Customs ’ finding in Headq uarter s Ruling Letter 96 2378 (“H QRL 962378”), that the Merchandise is not principally used for the convey

ance or packing of g oods and is, thus, precluded from being classifiable under heading 7010. In its pape rs, the Governm ent conte

nds that th

is finding was made

in accor dance w ith the g uideline s announc ed in T.D. 96-7; Tariff Classification of I mported Glassware: Change of Practice , 30 Customs B ulletin 30 (1996), 61 Fed. Reg. 223 (Jan. 3, 1996) (“ T.D. 96-7 ”). 5 As such, theCourt No. 99-06-00365 Page 10

are used; 3. sold from the importer to a wholesaler/distributor who then packs the m with goo ds; 4. sold in an environment of sale that features the goods packed in the jar and not the jar itself; 5. used to commercia lly c onvey

foodstuf fs, beve rages , oils, meat extracts, etc.; 6. capable of being used in the hot packing process; and 7. recognized in the trade as used primarily to pack and convey g oods to a consumer who then discards the container after this initial use. T.D. 96-7 , 30 Customs Bulletin at 32–33, 61 Fed. Reg. at 224. The Government urg es that HQRL 962378 “complied with the standards set for th” in T.D. 96-7 , and is the refore entitled t o deference under Skidmore v. Swift & Co. , 323 U.S. 134 (1944) (Def.’s Post Trial Mem. at 10); see Rocknel Fastener, I

nc. v. United States , 267 F.3d 1354, 1357 (Fed. Cir. 2001) (holding Skidmore defere

nce is ap propria te where Customs’ c lassific ation dec ision rev ealed Cu stoms’ thorough analy sis). In Rocknel , the Court of Appeals for the Federal Circuit observe d: “The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which g ive it power to persuade, if lacking power to control.” Rocknel , 267 F.3d at 1358 (q

uoting Sk idmore, 3 23 U.S. at 1 40). Her e, Customs’ determination tha

t the Merc

handise i s not clas sifiable under subheading

7010.91.5 0 is both selective and conclusory , and simply does not follow from the cr iteria set out in T.D. 96-7 , Carborundum , and Kraft . For exa mple, HQRL

962378 cl aims that t

he Merchandise “ is configured to hold a rubber lined, wooden lid.” (D ef.’s Post-Trial Mem. Ex. 1 at 4.) This is true as far a s it goes , and inde ed such a lid was use d on the Me

rchandi se packe d with bisc otti when i t was sold at retail. Customs chose to ignore, however, that the Merc handise has lugs, which are an integ ral par t of the Me

rchandi se’s Fin

ish. I t is these l

ugs that make the Mercha ndise abl e to accept a standa rd closur e capab le of for

ming a sa nitary seal, an d that allows the Mer

chandise to be used in the hot packing process. By ignoring the presence of

the lugs, Customs disregarded one of the seven fa ctors “in dicative but not con

clusive” of prope r classif ication o f merch andise under 7010. See T.D. 97-6 , 30 Customs B ulletin at 32, 61 Fe d. Reg. a

t 224. Fur

ther, wh ile Customs concluded that the Merchandise “appears to be manuf actured by

automatic machines from ordinary

glass” it gives no weight to this factor, e ven though it is enumerated as part of T.D. 96-7 . Finally

, HQRL 962378 sta

tes, witho ut any form of explanation : “The co st of the c ookie filled article ($16.00) supports the conclusion that the glass jar is the primar y focus of theCourt No. 99-06-00365 Page 11

purchaser with the contents simply emphasizing a suggested use of the r eusable jar.” (Def.’s Post-Trial Mem. Ex. 1 at 5.) This conclusion without more is simply unconvincing. Therefore, the court finds that HQRL 962378 does not have “ power to persuade” and, thus, does not qualify for Skidmore deference. See Mead Corp. v. United States , 283 F.3d 1342, 1350 (“The classifi cation r

uling at issue her e lacks t he power to persua de under the princ iples set f

orth in Skidmore .”). Government urges that HQRL 962378 be accorded deferenc e pursuant to Skidmore v . Swift & Co. , 323 U.S. 134 (1944). Thus, at trial, the Government made only a limited attempt to justify its classification of the Merchandise as “Glassware of a kind used for table, kitchen . . . indoor decoration, or similar purposes” under subheading 7013.39.20 . Rather, the Government focused its efforts on refuting Plaintiff’s asserted classifica tion.

In a pply ing the l aw to the e stablishe d facts, the cour t first tur ns to the f

actors s et forth i

n United States v. Carborundum Co. , 536 F.2d 373 (C.C.P.A. 1976). The court in Carborundum listed several “[f]actors which have been considere d by courts to be per tinent in determining whether imported merchandise” is classifiable under a particular “principal use” tariff pr ovision: (1) the “ gener

al physical ch aracte

ristics of the merc handise” ; (2) “the

expectat ion of the ultimate purchasers”; (3) “the channe ls, class or kind of trade in which the merchandise moves”; (4) “ the environment of the sale,” (i.e., the manner in which the mer chandise is advertised and displayed)”; (5)

“the use, if any , in the same manner as merchandise which def ines the class”; (6) “the economic practicality of so using the import”; and finally (7) “the recognition in the trade of this use.” Id. at 377 (citations omitted).

The Kraft court ap plied the se fact

ors and f ound that t

he merchandise a

t issue the re—gla ssCourt No. 99-06-00365 Page 12

6 It is undisputed in this litigation that subheading 545.27 TSUS is the predecessor provision of heading 7010.91. ( See Pl.’s Post-Trial Mem. at 11 n.2 (“In the USITC’s report on the conve rsion of the TSUS to the

HTSUS, I

tem 545.27 , TSUS, is cr

oss-ref erence d direct

ly to HTSUS subhe ading 7 010.91.” (citatio n omitted) ); see also Def.’s Pre-Trial Mem. at 24 (“I tem 545.27 [TSUS] . . . [is] the predecessor provision to Heading 7010, HTSUS, one of the provisions at issue here.”).) jars molde d into the s hape of small bear s, packe d with gr

ape jelly or straw berry jam for r etail sale, an d used in a

promotion al campa

ign cre ated to ma

rket the ir conte

nts—was c lassifia

ble under subheading 545.27 of the Tariff Sche dule of the United States (“TSUS”). 6 See Kraft , 16 CIT at 487, 489. I

n applying the Carborundum factors, the court found convincing, among other things, t hat: (1) t he glas s jars at i ssue wer

e capab le of bei

ng used in the “ho t packing” proce ss ( id. at 489); (2) that a comparison of the price of the c ontents with the price of the jar indicated that consumers would not purchase the contents as a means of a cquiring the container ( id. ); (3) that glass containers for food products g enerally go directly from the ma nufacturer to the packing plant ( id. ); and (4) that the design of glass conta iners and packing are important in marketing food products, because they can be used to attract consumers’ attention in order to incr ease sales ( id. ). Accordingly , the court found that “although [the bear jars’] shape is more e laborate than straig ht-sided jars, it is not more e laborat

e than se veral we ll-known j ars . . . c ommonly used to pack and market food products. The bear jars are bey

ond doubt chiefly so used.” Kraft , 16 CIT at 489.

Thi s co urt to o fi nds th at t he M erc han di se i s pr ope rly c las si fia bl e un der hea di ng 7 010 . In reaching this conclusion, the court applies the fac tors that were announced in Carborundum , amplified in Kraft , and enumerated in T.D. 96-7 . First, the general phy sical characteristics of theCourt No. 99-06-00365 Page 13

Merchandise demonstrate its capacity to be used as a container for the convey ance or packing of goods. See Carborundum , 536 F.2d at 377; ( see also

Pl.’s Tria l Ex. 1.) The

Mercha ndise has a large opening, a short nec k, and is “made of ordinary glass . . . and manufactured by machines which automatically fe ed molten glass into molds where the finished articles are f ormed by the action of compressed air . . . .” See T.D. 96-7 , 30 Customs Bulletin at 32, 61 Fed Reg. at 224 (providi ng that s uch phy sical ch aracte

ristics a re “indi cative”

of merchandise properly

classifi able under sub heading 7010.91.5 0). More over, the Mercha ndise has a lug F inish desig

ned to ac cept a standard-size closure which, when twisted on, is capable of forming a sea l sufficient for the Merchandise to convey

food in a sanitary ma

nner. See Kraft , 16 CIT at 487 (“Glass containers used to pa

ck, . . . or market f ood produ

cts have . . . parts . . . includ [ing] a sea

ling sur face, g lass lugs used to attach the closure, [and] the finish . . . . These parts are e ssential in order for the containers to function as a sanitary container for food products . . . .”). I n addition, the Merchandise is capable of withstanding the “ hot packing” process. See Kraft , 16 CIT at 489 (finding that glass containers classifiable unde r subheading 545.27, TSUS, “must be designed for use in the hot pack p

rocess. ”); T.D. 96-7 , 30 Customs Bulletin at 33, 61 Fed. Reg. at 224.

Secondly, while neither pa rty produce d credible evidence as to what the expectations of the ultimate purchaser might be with respect to keeping or discarding the Merchandise af ter the biscotti were removed, the evidence of the re tail value of the biscotti alone is probative as to a purchaser’s motivation in selecting the goods. The retail value of the biscotti was between $22 and $25. Costco, a retail discounter, offered the Mer chandise filled with biscotti for between $15 and $16. T

his evide nce sug gests th at consum ers would conclude that they were g etting a

barga inCourt No. 99-06-00365 Page 14

on the bisc otti alone . Thus, as the pric e of the M erchan dise packed with the biscotti was dire ctly correlated to the retail value of the twenty -two biscotti, the court finds that “[a]cquisition of the container [was] incidental” to the purchase of the biscotti. Kraft , 16 CIT 489. I ndeed, there is no indication that the

relation ship betwe en the co st to the pa cker of the Merc handise ( approxima

tely $1.53) to the wholesale cost of the biscotti packed inside (approximately $5.50) would not continue at the re tail leve l. This re lationship does not a

ppear to reveal an inver se ratio t

hat would indicate that the Merchandise—and not the biscotti—was the item being of fered for sale. Compare Kraft , 16 CIT at 489 (“Evidence of the price of the products in comparison with the price of the jar in dicates the consu

mers ord inarily would not p

urchase the food product a s a means to acquire the container.”), with Minnetonka Brands, Inc . v. United States , 24 CIT __, __, 110 F. Sup

p. 2d 1020, 1024 (200 0) (find ing con sumers “

purchas e[d] the subj ect merc handise mainly for the a musement v alue of t

he conta iner, ra ther tha n the bubb le bath in side,” in part, because “[t]he suggested retail price of the subject merchandise [was] many times greater than that of a plain, flat-sided container filled with more bubble bath.”). I n addition, the court’s observation of the Merchandise, particularly in comparison with the exhibits provided by the Government, confirms that the Merchandise is neither as a ttractive nor of the same quality as these exhibits; and because of its smaller opening is not capable of providing the same utility. This being the case, it is simply not likely that “[b]ecause of the unusual and attractive shape, an ultimate purchaser’s primary expectation would be to reuse the article after the conve yed or packed goods are used . . . .” ( See Def.’s Post-Trial Mem. Ex. 1 at 5.)

Third, the channels of trade in which the Mercha ndise moved tend to bolster Plaintiff’sCourt No. 99-06-00365 Page 15

case. H ere, the

Mercha ndise wa s shipped e

mpty from the s

upplier to the compa

ny t hat pack ed it with biscotti. See Kraft , 16 CIT at 489 (“Glass containers used for food products generally move through channels of trade which run dire ctly from the manufa cturer to the packing plant where the jars a re used t o pack fo od products.”); see also T.D. 96-7 , 30 Customs Bulletin at 33, 61 Fed. Reg. at 224. The Merchandise was not sold at wholesa le for any purpose other than that of being used as a container for convey ing or packing food. Nor was the Merchandise ever sold empty at retail, or offered for sale to the public unless pac ked with food. See Kraft , 16 CIT at 489 (finding it probative that “[t]hese glass containers are never sold dire ctly to the consumer.” ).

Fourth, the environment in which the Merchandise packe d with the biscotti was sold at retail favors Plaintiff’s proposed classification. See Carborundum , 536 F.2d at 377 (“[T]he environment of the sale [includes] the manner in which the merchandise is advertised a nd display ed . . . .” (citation omitted) ). Costco ( the sole r etailer ) sold the Mercha ndise in its “seasonal gift aisle” where it wa s displayed for sale with other food items. The Merchandise was never displaye d or sold in an area where empty glassware, kitchen, or storag e containers were sold. See T.D. 96-7 , 30 Customs Bulletin at 33, 61 Fed. Reg. at 228 (stating it to be indicative of merchandise properly

classifiable under subheading 7010.91.50 that it is “sold in an environment of sale that featu

res the g oods pac ked in the jar and n ot the jar itself . . . .”). I

n addition , while there is no evidence that the Merchandise pac ked with biscotti was advertised, there is evidence that Acme—the company that chose to pack biscotti in the Merchandise rather than an opa que container—did so because the Merchandise was relatively unique and emphasized the frosting on the biscotti. As such, Acme hoped that consumers would respond to the uncommon shape of theCourt No. 99-06-00365 Page 16

Mercha ndise and find it att ractive for pre sentation

as a gif t. In a ddition, by

packing the bisco tti in the Mer

chandise with the f

rosting facing out and, th

us, clea rly visible thr

ough the glass to consumers, it was hoped that consumers would be attracted to the food pr oduct itself. See Kraft , 16 CIT at 489 (“Packag

ing plays a

key role in the mar

keting of food products . . . [in that] the packaging attracts the c onsumer’s attention and is designed to increase sales of the food product packed in the container.”).

Fifth, the court in Carborundum found tha

t the use to

which mer

chandise is actua lly p ut is probative of the class to which it belongs. Carborundum , 536 F.2d at 377 (finding that the subject me

rchandi se was a

ctually used in a d

iffere nt manner

than the m erchan

dise cla ssifiable under the particu lar tari ff provi sion at issu e); see T.D. 96-7 , 30 Customs Bulletin at 33, 61 Fed. Reg. at 224. Her

e, it is und

isputed th at the Me

rchandi se was a

ctually used as a containe r into which food was packed and convey ed.

Sixth, neither party introduced direct e vidence as to the economic practicality of using the Mercha ndise to c onvey

food (al though there wa s testimony that Acme

selecte d the Mer

chandise because it was “inexpensive”). Carborundum , 536 F.2d at 377; T.D. 69-7 , 30 Customs B ulletin at 33, 61 Fed. Reg. at 224.

Finally, neither pa

rty offer ed credible evidence as to whether the Merchandise would be recognized by

the trade as “Other containers, of g lass, of a kind used for the convey ances or packi ng of goo ds” un der su bhead ing 7010.91.50. See Carborundum , 536 F.2d at 377, T.D. 69-7 ,Court No. 99-06-00365 Page 17

30 Customs Bulleting at 33, 61 Fed. Reg. at 224.

Thus, while the shape of the Merchandise may be different from that of other containers classifi able unde

r headin g 7010, t hese dif ferenc es do not pr

event the Mercha ndise fr om being so classified, see Kraft , 16 CI T at 488; ( compare Pl.’s Trial Ex. 1, with Court Trial Exs. 1, 2), and the clea r eviden ce addu ced at tr ial suppor ts the con clusion th at the Me

rchandi se is prop erly classified under 7010.91.50.

CONCLUSION In accorda

nce with the foregoing finding s of fact and conclusions of law, the court finds that Plaint

iff has o vercome

the pres umption of

correctness tha

t attache d to Customs’ classifi cation r

uling und er subhe ading 7 013 by

clearly establish ing that the Merc handise i s classifiable under heading 7010, and that the Mer chandise is a glass container of a kind used f or the conveya

nce or packing of goods a nd, thus, is properly classified unde r subheading 70 10 .9 1. 50 of

th e H TS US . J ud gm en t i s e nt er ed ac co rd in gl y.

___________________________ Richa rd K. E aton, Judge Dated: October 5 , 2002 New York, New York