Modification of New York Ruling Letter (NYRL) 816470; SeashellHurricane Candles

HQ 958778 September 17, 1996 CLA-2 RR:TC:FC 958778K CATEGORY: Classification TARIFF NO.: 3406.00.0000 Mr. Thomas Davidson Manager Pacific Seashell 114 Water St (Gastown) Vancouver, BC, Canada V6B 1B2 RE: Modification of New York Ruling Letter (NYRL) 816470; Seashell Hurricane Candles Dear Sir: In your letters December 20, 1995 and April 12, 1996, you requested modification of NYRL 816470, dated December 1, 1995, to include treatment for Seashell Hurricane Candles under the North American Free Trade Agreement (NAFTA). This letter is to inform you that NYRL 816470 no longer reflects the views of the Customs Service and is modified in accordance with section 177.9(d) of the Customs Regulations (19 CFR 177.9(d)). Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. 1625), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), hereinafter, section 625), notice of the proposed modification of NYRL 816470 was published on August 14, 1996, in the Customs Bulletin, in Volume 30, No. 33 . The following represents our position. FACTS: Items 20-002 and 20-003, are referred to as Seashell Hurricane Candles. Each candle is packaged with its own box, label and a cowry shell coaster. The candles are made in Canada from the following components: wax that originates in Canada, wick, scent, hardener, and dye that originate in the United States, and sea shells that originate in Canada and the Philippines. The Cowry shell coasters originate from the Philippines and are used as fireproof bases under the candles. A sample was submitted with the requests for reconsideration. NYRL 816470 held that the candles packaged and sold together with the cowry coasters were sets and since the essential character of the sets is imparted by the candles, they were classified in subheading 3406.00.0000, Harmonized Tariff Schedule of the United States (HTSUS), as candles, tapers and the like with duty at the 1995 general rate of 4.6 percent ad valorem. However, the ruling also held that because some of the shells and the cowry coasters are from a non-originating country , the Philippines, the Seashell Hurricane Candles were not wholly obtained or produced in the territory of a NAFTA country. ISSUE: The issue is whether the Seashell Hurricane Candles, as described above, qualify for NAFTA treatment under General Note 12(b)(ii)(A), HTSUS. LAW AND ANALYSIS: If imported directly into the United States from the Philippines, the sea shells would be classified under heading 0508, and the cowry coasters under heading 6912, HTSUS. The Seashell Hurricane Candles with the coasters were classified as sets in subheading 3406.00.0000, HTSUS. General Note 12(b)(ii)(A), HTSUS, provides, in part, that goods imported into the United States are eligible for NAFTA treatment if "they have been transformed in the territory of Canada, Mexico and/or the United States so that--(A) except as provided in subsection (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s), (and (t)." General Note 12(t) provides that a change to heading 3406 from any other heading constitutes a change that creates an originating good for NAFTA purposes. Accordingly, the Seashell Hurricane Candles are goods originating in the territory of a NAFTA party. HOLDING: The Seashell Hurricane Candles described above are classified as candles, tapers and the like, in subheading 3406.00.0000, HTSUS, and qualify as originating goods for NAFTA purposes. NYRL 816470, dated December 1, 1995, is modified. The cowry coasters should be properly marked to indicate the country of origin. In accordance with 19 U.S.C. 1625, this ruling will become effective 60 days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625 does not constitute a change of practice or position in accordance with section 177.10(c)(1), of the Customs Regulations (19 CFR 177.10(c)(1)). Sincerely, John Durant, Director Tariff Classification Appeals Division