Reconsideration of NY N033901, dated May 3, 2013; classification of an “Executor’s Toolkit”

HQ H063897 July 30, 2014 CLA-2 OT:RR:CTF:TCM:ERB CATEGORY: Classification TARIFF NO.: 4202.12.20 Jean Lavictoire Operations & Logistics Inevitable Exodus, Inc. 1-2627 Edinburgh Place Ottawa, Ontario Canada K1B 5M1 RE: Reconsideration of NY N033901, dated May 3, 2013; classification of an “Executor’s Toolkit” Dear Mr. Lavictoire: This is in response to your correspondence, dated May 27, 2009, on behalf of Inevitable Exodus, Inc. (Inevitable Exodus) requesting that U.S. Customs and Border Protection (CBP) reconsider New York Ruling Letter (NY) N033901, dated August 18, 2008. NY N033901 pertains to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of the “Executor’s Toolkit,” consisting of a CD, a workbook (the contents of which is on the CD), a lined notepad, a rigid poly file folder, and a portfolio composed of PVC (polyvinyl chloride, or plastic). Two samples were submitted for analysis. Our response follows. FACTS: A sample of the entire kit was submitted with the original ruling request. In NY N033901, CBP stated the following: The sample submitted is referred to as an “Executor’s Toolkit.” The item is a set marketed to individuals responsible for taking care of a family member’s affairs after their death. The set is comprised of a polyvinyl chloride (PVC) briefcase, an accordion file folder, an instructional workbook, a compact disc [CD], and a notepad. For classification purposes, the “Executor’s Toolkit” will be classified as a set. Explanatory Note X to the General Rules of Interpretation (GRI) 3(b) states that a “set” for tariff classification purposes: Consists of at least two different articles which are prima facie, classifiable in different headings; Consists of products or articles put up together to meet a particular need or carry out a specific activity; Are put in a manner suitable for sale directly to users without repacking. The briefcase, file folder, workbook, compact disc, and notepad together meet the qualifications of “goods put up in sets for retail sale.” The components consist of at least two different articles which are prima facie classifiable in different subheadings. They are put up together to meet a particular need or carry out a specific activity, and they are packed for sale directly to users without repacking. GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. It is the briefcase that provides the essential character to the set. The applicable subheading for the “Executor’s Toolkit” will be 4202.12.2035, Harmonized Tariff Schedule of the United States, which provides for briefcases and similar containers, with outer surfaces of plastics, other. The rate of duty will be 20 percent ad valorem.  The first sample submitted to CBP for purposes of this reconsideration is a portfolio style case. The second sample contained two retractable handles and a full zipper which fully enclosed the interior. The contents of both were identical. Inevitable Exodus asserts that the correct classification of the kit is under heading 8523, HTSUS, as “Discs, tapes, solid-state non-volatile storage devices, “smart cards” and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of chapter 37.” ISSUE: Whether the subject “Executor’s Toolkit” comprised of a briefcase, file folder, workbook, compact disc, and note pad, are classified under heading 4202, HTSUS, which provides for briefcases and similar containers or under heading 8523, HTSUS which provides for compact discs. LAW AND ANALYSIS: Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods 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 the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. The HTSUS provisions under consideration are as follows: 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: 4202.12 Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels and similar containers: With outer surface of plastics or of textile materials: *** 8523 Discs, tapes, solid-state non-volatile storage devices, “smart cards” and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of chapter 37. In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the Harmonized System at the international level, may be utilized. The ENs, although not dispositive or legally binding, provides a commentary on the scope of each heading, and is generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The EN to 42.02 states, in relevant part: This heading covers only the articles specifically named therein and similar containers. Since no heading by itself covers the subject merchandise, classification cannot be determined by GRI 1. GRI 2 is not relevant, as the subject merchandise is not incomplete or unfinished in its imported condition, nor is it a mixture. Therefore, our analysis will turn on the application of GRI 3. Specifically, GRI 3(b) which provides for “sets.” GRI 3(b) provides as follows: 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. The EN (VIII) to GRI 3(b) provides as follows: 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. The EN (X) to GRI 3(b) and provides as follows: For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which: Consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule; Consist of products or articles put up together to meet a particular need or carry out a specific activity; and Are put up in a manner suitable for sale directly to users without repacking (e.g. in boxes or cases or on boards). As stated above, the Executor’s Toolkit comes with a briefcase, a file folder, workbook, and notepad, and a compact disc (CD). Together, the components are meant to be used by an executor of an estate to assist with the obligations and responsibilities of executing a person’s last will and testament. Lastly, they are put up together for sale and are not repackaged after importation. Therefore, the subject merchandise meets the three requirements found in the EN (X) to GRI 3(b) and is a “set” for tariff purposes. CBP must next determine which component imparts the essential character of the set, for classification purposes. Inevitable Exodus argues that the subject merchandise is not a briefcase or similar container under heading 4202, HTSUS. Rather, the essential character of the subject merchandise is imparted by the CD which contains an electronic version of the same information provided in the workbook. In Headquarters Ruling Letter (HRL) 953916, dated June 11, 1993 CBP noted the following: In prior rulings, we have concluded that the container provides the essential character to substantially similar kits or sets. See Headquarters Ruling Letter (HRL) 088323, dated June 7, 1991 (pencil box containing pens, pencils, ruler, and sharpener classified as a set, with the container providing its essential character); HRL 087026, dated July 24, 1990 (Pencil pouch containing pencil ruler and eraser classified as a set, with the pouch lending its essential character; HRL 086774, dated July 17, 1990 (Stationery and pencil boxes containing various items classified as a set, with the container providing their essential character). In these decisions, the container imparted the essential character to the set when it possessed one or more of the following features; 1. It comprised a substantial portion of the bulk and value of the set; 2. Was suitable for repeated use (even after the writing implements and paper were used; 3. Served a decorative or useful purpose that played an essential role in the marketing of the kit; 4. Was designed specifically and carefully for its particular use. CBP also noted in HRL 953916 that the relative importance of these features would vary on a case-by-case basis. Here, Inevitable Exodus’ briefcase provides the majority of the overall product’s bulk and weight and is thus the most prominent component of the set. With respect to its role in the set, the briefcase was designed to provide storage, portability, organization, and protection to the other components, and also has space for additional items. The briefcase is well made of durable PVC and is suitable for repeated future use. Conversely, the workbook, notebook, and CD will likely be used and then discarded. Inevitable Exodus notes in its submission that the product cost breakdown indicates that the CD and workbook are individually more valuable than the briefcase. However, cost is only one factor CBP must consider in determining a set’s essential character. In light of the above characteristics of the briefcase, including that it is a substantial portion of the bulk and weight of the set, is suitable for repeated use (even after the workbook, notebook and CD are discarded), serves an essential role in the marketing of the set, and that it was designed to provide storage, portability, organization, and protection of the other components, along with additional items belonging to the user, CBP thus concludes that the briefcase imparts the essential character of the subject merchandise. HOLDING By application of GRI 3(b), the subject merchandise is classified under heading 4202, HTSUS. Specifically, it is provided for under subheading 4202.12.20, HTSUS, which provides for “Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels… and similar containers; …: With outer surface of plastics or of textile materials: With outer surface of plastics.” The column one duty rate is 20 percent ad valorem. EFFECT ON OTHER RULINGS New York Ruling Letter N033901, dated August 18, 2008 is AFFIRMED. In accordance with 19 U.S.C. §1625(c), this ruling will be effective 60 days after its publication in the Customs Bulletin. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division