Plastic carrying case; Proposed Revocation of NY M84715

HQ H003715 June 30, 2010 CLA-2 OT:RR:CTF:TCM H003715 PJG CATEGORY: Classification TARIFF NO.: 4202.92.45 Mr. Robby Menon Global Sourcing & Purchasing Manager Robeez Footwear Ltd. 7979 Enterprise Street Burnaby, BC V5A 1V5 Canada Re: Plastic carrying case; Proposed Revocation of NY M84715 Dear Mr. Menon: This letter is in response to your request for reconsideration, dated October 4, 2006, of New York Ruling Letter (NY) M84715, which was issued to your company, Robeez Footwear Ltd. (“Robeez”), by U.S. Customs and Border Protection (“CBP”) on July 13, 2006. At issue in NY M84715 was the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of a carrying case from China used to package and protect children’s footwear. We have reviewed your request for reconsideration as well as the accompanying photographs and sample that you provided to our office. FACTS: In NY M84715, the plastic carrying case was described as follows: The submitted sample is a carrying case for footwear. It is wholly of polyvinyl chloride (PVC) plastic sheeting. It features a top zippered opening and a carrying handle of braided cord. It measures approximately 6’’ (H) x 5’’ (W) x 3’’ (D). It is designed and principally used for the storage, protection and organization of clothing and other personal accessories during travel. It is also designed for repetitive reuse. In your request for reconsideration, you further describe that the subject merchandise “is imported as an empty bag” and the shoes and paper card insert are added to the bag after importation. CBP classified the subject merchandise under subheading 4202.92.4500, HTSUS. ISSUE: Whether the plastic carrying case should be classified under subheading 4202.92.45, HTSUS as “Travel, sports and similar bags: Other”, or under subheading 3923.29.00, HTSUS as “Sacks and bags (including cones): Of other plastics”. LAW AND ANALYSIS: Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (“GRIs”). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 GRIs 2 through 6 may then be applied in order. In addition, the Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”), while not binding law, are the “official interpretation” of the Harmonized System at the international level and “provide a commentary on the scope of each heading” of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989); see also, Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1309 (Fed. Cir. 2003) (noting that Explanatory Notes are “intended to clarify the scope of HTSUS subheadings and to offer guidance in their interpretation”). The 2010 HTSUS provision under consideration are as follows: 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: * * * Sacks and bags (including cones): 3923.29.00 Of other plastics * * * * * * * * * * * * 4202 Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: * * * Other In your request for reconsideration, you state that the subject merchandise has the “shoe size . . . screen-printed on the bottom right corner of each vinyl bag.” You state that the primary purpose of the 0.18 mm thick (approximately 7 mils) subject merchandise is to package the children’s footwear and prevent it from “getting crushed so [your] products can be properly displayed and sold at the stores.” You further assert that the braided cord attached to the top of the subject merchandise is primarily for hanging the merchandise from store shelf racks. In your request for reconsideration, you assert that the subject merchandise should be classified under subheading 3923.29.00, HTSUS, as an “[a]rticle[] for the conveyance or packing of goods, of plastics; . . . [s]acks and bags . . . : [o]f other plastics.” You base your request on CBP Headquarters Ruling Letter (HQ) 962363, dated Jan. 19, 2000, (referring to bag one), and HQ 963112, dated Feb. 16, 2000, (referring to bag four), and New York Ruling Letter (NY) 864257, dated June 25, 1991, NY M83993, dated June 27, 2006, NY L83931, dated April 19, 2005, NY 812438, dated July 26, 1995, and NY E85031, dated Aug. 6, 1999. You also assert that the subject merchandise should be classified under heading 3923, HTSUS because the “braided cord is used primarily for display hanging purposes at the stores’ shelve racks,” it is “not of a type that is sold at retail on its own,” and it is screen-printed, thus indicating that it “is only designed to package the specific product.” The EN to heading 39.23 states that heading 3923 “covers all articles of plastics commonly used for the packing or conveyance of all kinds of products” including “sacks and bags,” but excludes “containers of heading 42.02.” According to Chapter 42, Note (2)(A)(a), HTSUS, “heading 4202 does not cover . . . [b]ags made of sheeting of plastics, whether or not printed, with handles, not designed for prolonged use.” Therefore, “[b]y implication, bags composed of plastic sheeting which are designed for prolonged use may be classified in Heading 4202” and are thereby not classifiable under heading 3923, HTSUS. See HQ 954715, dated Feb. 17, 1994. Accordingly, to determine whether an article is classified under heading 3923, HTSUS or heading 4202, HTSUS, we must consider whether the bag is “designed for prolonged use.” In prior rulings, CBP has determined whether an article is “designed for prolonged use” by considering whether the article is reusable. See HQ W968181, dated Oct. 3, 2006. The test used by CBP to determine whether a plastic bag is designed for prolonged use involves considering “whether or not the bag: (1) is of a kind sold at retail on its own merits; and (2) is of a kind normally sold as packaging with contents.” See HQ W968181. When both factors are satisfied, then the first factor is “the determining factor.” See HQ W968181 (citing to HQ 962363). In determining whether a bag “that [is] composed of clear, unembossed, PVC plastic sheeting” is designed for prolonged use, CBP also “consider[s] the thickness of . . . [the] plastic sheeting.” See HQ 962363. If the plastic sheeting measures 4 mils or greater, then that usually means the bag is durable and “is designed for prolonged use to carry personal effects (UNLESS the container is not of a kind normally sold at retail on its own merits; and ABSENT single use indicators such as hangers, cutouts, tabs, odd shapes, etc. . . . ).” See HQ 962363. If the plastic sheeting measures less than 4 mils, then that is generally indicative of a container that is “less durable and not designed for prolonged use.” See HQ 962363. First, we must consider whether the subject merchandise may be “sold at retail on its own merits.” See HQ W968181. Although you assert that the primary purpose of the subject merchandise is to package the children’s footwear and prevent it from “getting crushed so that [your] products can be properly displayed and sold at the stores,” we find that the zipper feature on the carrying case allows the consumer to reuse the carrying case for carrying personal effects, such as toiletry, or for storing the children’s shoes. In fact, we find that the zipper feature, and the thickness of the plastic sheeting, which we will discuss later, shows that the bag is capable of being sold at retail on its own merits. In fact, we have determined that the bag may be sold at retail on its own merits by finding similar empty bags for sale on consumer websites. For example, Amazon.com (http://www.amazon.com/Clear-Totes-Train-Case-7-1/dp/B003DWM4LK/ref=pd_sim_bt_9) sells the Clear Totes Train Case, which is a zippered, clear, vinyl bag with a handle. Second, we must consider whether the subject merchandise is “normally sold as packaging with contents.” See HQ W968181. We find that such bags are normally sold with contents as well. For example, Kohl’s Illinois, Inc. (http://www.kohls.com/kohlsStore/beauty/bathbody/accessories/PRD~598221/Earth+Therapeutics+QuickDry+Hair+and+Body+Towel.jsp) sells a product called “Earth Therapeutics Quick-Dry Hair & Body Towel” that is packaged in what they refer to as a “reusable pouch” that is similar to the subject merchandise. Since both factors are met, the first factor is the “determining factor”, and we therefore consider the subject merchandise salable on its own. See HQ W968181 (citing to HQ 962363). Another factor supporting the prolonged usability of the subject merchandise is the thickness of its plastic sheeting and the absence of single use indicators. See HQ 962363. The subject merchandise is designed for prolonged use, in part, because it is “composed of clear, unembossed, PVC plastic sheeting” that measures approximately 7 mils, and it does not have “single use indicators” such as hangers or cutouts. See HQ 962363. Although the subject merchandise has a company name tag sewn on its front side and information screen-printed on its surfaces, these factors do not preclude the merchandise from being classified under heading 4202, HTSUS because the printings are “not . . . special design feature[s] that would limit its use to retail packaging.” See HQ W968315 (finding that the prescription drug name and internet address imprinted on the PVC pouch did not limit the use of the pouch to retail packaging). Therefore, the printing does not prevent the consumer from reusing the subject merchandise for purposes such as storing the children’s footwear or for carrying toiletry. See HQ W968315. In applying the tests indicated above, we have determined that the subject merchandise is designed for prolonged use and therefore is classifiable under heading 4202, HTSUS. Heading 4202, HTSUS contains a list of examples of items that should be classified under the heading. It also contains the general phrase “similar containers.” To “determine the scope of [a] general . . . phrase”, the United States Court of International Trade has used the rule of ejusdem generis. A.D. Sutton & Sons v. United States, 30 I.T.R.D. (BNA) 1949, 9-10 (Ct. Int’l Trade 2008) (citing Aves. In Leather, Inc. v. United States, 178 F.3d 1241, 1244 (Fed. Cir. 1999). Under the rule of ejusdem generis, “‘the general word or phrase is held to refer to things of the same kind as those specified.’” Id. at 9 (citing Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1392 (Fed. Cir. 1994). The Court of International Trade has noted that “[i]t is established that the exemplars in heading 4202 possess ‘the essential characteristics of organizing, storing, protecting, and carrying various items.’” Id. at 10 (citing Totes, Inc. v. United States, 69 F.3d 495, 498 (Fed. Cir. 1995). In your request for reconsideration, you concede that the subject merchandise is used for protecting the footwear. The subject merchandise’s zipper, braided cord handle, and durable plastic sheeting also make it possible to store and carry items. Therefore, the subject merchandise does “possess ‘the essential characteristics’” of the “exemplars in heading 4202.” Id. (citing Totes, Inc. v. United States, 69 F.3d 495, 498 (Fed. Cir. 1995). Furthermore, EN 42.02 states that the “the expression ‘similar containers’” in heading 4202 includes shoe-cases. The subject merchandise is a carrying case that is used as a shoe-case by Robeez. According to EN 39.23, heading 3923, HTSUS excludes containers of heading 4202, HTSUS. As such, the subject merchandise is classified under heading 4202, HTSUS. Specifically, the subject merchandise is classifiable under subheading 4202.92.45, HTSUS as “similar containers, . . . of sheeting of plastics, of textile materials, . . . or wholly or mainly covered with such materials . . . : Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other.” In your request for reconsideration you cite to several prior rulings to support your argument that the subject merchandise should be classified under 3923.29.00, HTSUS. These rulings are distinguishable from the subject merchandise for the following reasons. Bag one in HQ 962363 (referred to as “item number one” in the ruling) had two single use indicators; specifically, it had a cutout and a flimsy plastic hanger. Similarly, the bag in NY M83993 had a single use indicator in the form of a cutout, and the bags in NY L83931 had a flimsy plastic hanger. The bags discussed in ruling NY 812438 were properly classified under subheading 3923.29.00, HTSUS because they were “flimsily constructed, and [were] not capable of prolonged use.” In your request for reconsideration, you also referred to bag four in HQ 963112; however, the ruling did not in fact contain a “bag four” or “item number four.” In any case, the two bags discussed in the ruling (referred to as “item number two” and “item number three” in the ruling) were properly classified based on their durability, prolonged usability, and the likelihood of being sold on their own at retail. In NY 864257, the ruling did not find that the bag was used for any purpose other than to be “used to display the shoes, and serve as a retail packing for transporting the shoes home.” For NY E85031, there is not enough information in the ruling to analogize or distinguish the bag classified therein with the subject merchandise. Therefore NY E85031 neither helps your argument nor detracts from it. Moreover, please note that the marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, “every article of foreign origin (or its container . . . ) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.” Section 134.11 of the CBP regulations (19 CFR 134.11) implements 19 U.S.C. 1304. Moreover, section 134.1(d) defines the “ultimate purchaser” as “generally the last person in the United States who will receive the article in the form in which it was imported.” Where the articles imported constitute containers, 19 CFR Part 134 Subpart C is applicable. The country of origin marking requirements for reusable containers is governed in part by 19 CFR 134.23(b), which states that “[c]ontainers . . . which give the whole importation its essential character, as described in General Rule of Interpretation 5(a) (19 U.S.C. 1202), must be individually marked to clearly indicate their own origin with a marking such as, ‘Container made in (name of country).’” Here, the ultimate purchaser of the bag is Robeez, which receives the empty bag in the form in which it was imported and fills it with children’s footwear and a cardboard insert. As indicated earlier, the bag is reusable. Accordingly, the marking provisions of 134.23(b) are applicable and each bag must be individually marked with the country of origin. An appropriate marking for the bags would be “Container made in China.” HOLDING: By application of GRI 1, the plastic carrying case is classified under heading 4202, HTSUS, and specifically, provided for under subheading 4202.92.45, HTSUS, as: “traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other.” The 2010 general, column one rate of duty is 20%. EFFECT ON OTHER RULINGS: None. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division