Revocation of NY R03851; Classification of a water tank set

HQ H044958 August 2, 2011 CLA-2 OT:RR:CTF:TCM H044958 JRB CATEGORY: Classification TARIFF NO.: 3926.90.99 Mr. Troy D. Crago Atico International USA, Inc.501 South Andrews Avenue Fort Lauderdale, FL 33301 RE: Revocation of NY R03851; Classification of a water tank set Dear Mr. Crago: This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered New York Ruling Letter (NY) R03851, issued to you on May 30, 2006, concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a water tank set. The merchandise was classified under heading 8481, HTSUS, which provides for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof.” We have reviewed that ruling and found it to be in error. Therefore, this ruling revokes NY R03851. Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), 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), notice of the proposed modification was published on June 9, 2010, in the Customs Bulletin, Volume 44, No. 24. No comments were received in response to this notice. FACTS: The merchandise at issue was described as follows in NY R03851: [A ] water tank set, item number W038BA03046. The set is comprised of a refillable water bottle, a ceramic dispenser pot with plastic ring and valve, and a metal stand. The water bottle dispenser and stand are imported together and are presumably packed together ready for retail sale. The dispenser pot incorporates a hand-operated valve with a spout to control the flow of water from the storage bottle. In addition, to the facts provided for in NY R03851, CBP reviewed the initial request from you and wishes to include that the refillable bottle is made of polycarbonate plastic. ISSUE: Whether the water tank set is classified in heading 8481, HTSUS, as a valve or heading 3926, HTSUS, as an other article of plastic, heading 6914, as other ceramic articles or heading 7323, HTSUS, as table, kitchen or other household articles of steel. LAW AND ANALYSIS: Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRIs may then be applied. The relevant HTSUS provisions are as follows: 3926: Other articles of plastics and articles of other materials of headings 3901 to 3914: 7323: Table, kitchen or other household articles and parts thereof, of iron or steel; iron or steel wool; pot scourers and scouring or polishing pads, gloves and the like, of iron or steel: 8481: Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: The merchandise at issue consists of a refillable water bottle of heading 3926, HTSUS and ceramic dispenser pot incorporating a plastic ring and a valve with a spout (a tap) of heading 8481, HTSUS and a steel stand. When goods are, prima facie, classifiable in two or more headings, they must be classified in accordance with GRI 3, which provides, in relevant part, as follows: (a)     The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (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), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.  *          *          *          * In this case, headings 3926, 7323 and 8481, HTSUS, each refer to only part of the merchandise. Thus, pursuant to GRI 3(a), we must consider the headings equally specific in relation to the goods. Accordingly, the goods are classifiable pursuant to GRI 3(b) as a set because they are prima facie classifiable in more than one heading, are used for the specific activity of dispensing water and are put up for sale without repacking. See EN X to GRI 3(b). Infra.      In classifying the articles pursuant to a GRI 3(b) analysis, the goods are classified as if they consisted of the component that gives them their essential character. In relevant part, the ENs to GRI 3(b) state:       In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods. (X) For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which: (a) consist of at least two different articles which are, prima facie, classifiable in different headings . . .; (b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards). *          *          * There have been several court decisions on "essential character" for purposes of GRI 3(b). These cases have looked to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (citations omitted) (2005), "the essential character of an article is that which is indispensable to the structure, core or condition of the article, i.e., what it is." See also Conair Corporation v. United States, 29 Ct. Int’l Trade, 888, 895 (citations omitted) (2005), (discussing "the concept of ‘essential character’ found in GRI 3(b)"). In this instance, the refillable water bottle provides the indispensable role of storing the water and being the tank in the water tank set. The pot with its valve distributes the water but is dependent upon the refillable water bottle for its water supply and will only be used when the consumer dispenses the water. In contrast, the refillable water bottle continuously stores the water. The metal stand merely elevates the tank but does not affect its water storage capacity. As such, we find that the essential character of the water tank set is provided by the refillable water bottle. HOLDING: By application of GRI 3(b), the water tank set is classified in heading 3926, HTSUS. It is provided for in subheading 3926.90.99, HTSUS, which provides for: “Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other.” The column one, general rate of duty is 5.3% ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the world wide web at www.usitc.gov. EFFECT ON OTHER RULINGS: NY R03851, dated May 30, 2006, is revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division