Application for Further Review of Protest No. 4701-06-100691; Classification of Santa hat with team logo

HQ H095406 December 09, 2010 CLA-2 RR:CTF:TCM H095406 JPJ CATEGORY: Classification TARIFF NO.: 9505.10.25 Port Director U.S. Customs and Border Protection Attention: Chief, Trade Operations Branch D, Building 77 JFK International Airport Jamaica, NY 11430 RE: Application for Further Review of Protest No. 4701-06-100691; Classification of Santa hat with team logo Dear Port Director: This is our reply to your memorandum dated February 19, 2010, forwarding the Application for Further Review (“AFR”) of Protest Number 4701-06-100691, timely filed by Meeks, Shepherd, Leo & Pillsbury on behalf of Team Beans, LLC, (“Team Beans”) concerning the classification of a Santa hat with team logo under the Harmonized Tariff Schedule of the United States (“HTSUS”). On November 4, 2010, a meeting was held with protestant and members of my staff. A sample was also submitted to this office for examination. FACTS: The sample hat consists of a conical-shaped red and white Santa hat made of knit man-made fiber fabric with a white faux fur trimmed cuff, and a white pom-pom at the hat’s peak. On the hat’s cuff, there is a name of a sports, or university, or college football team, in this case, “Arkansas” (although the team name will vary depending on the Santa hat), and five embroidered sprigs of holly with leaves and berries. The front cone portion of the hat features a white fabric strip running down the middle and a sewn-on patch with the team logo, in this case, a razor-back hog (although the logo will vary depending on the Santa hat). The Santa hat with team logo is sold, along with other Christmas merchandise, by Team Beans during the Christmas season in their holiday catalog. The decision protested is the classification and rate and amount of duties chargeable on six entries of “Santa hats” made from November to December, 2005. The entries at issue liquidated on respective dates from June to August, 2006, with the merchandise classified in subheading 6505.90.8090, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), which provides for: “Hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed; hair-nets of any material, whether or not lined or trimmed: Other: Of man-made fibers: Other: Not in part of braid, Other: Other: Other.” Protest No. 4701-06-100691, which included an Application for Further Review (“AFR”), was timely filed by Team Beans on September 21, 2006. ISSUE: Whether the Santa hat with team logo is classified in heading 9505, HTSUS, as festive, carnival or other entertainment articles or in heading 6505, HTSUS, as hats and other headgear. LAW AND ANALYSIS: Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 4701-06-100691 was properly accorded to protestant pursuant to 19 C.F.R. § 174.24(c) because the decision against which the protest was filed involves matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling. Protestant also complied with the requirements of 19 CFR §174.25 and, in that process, provided a “a statement of any facts or additional legal arguments, not part of the record, upon which the protesting party relies ….” Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). 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 if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied. The 2005 HTSUS provisions under consideration are as follows: 6505 Hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed; hair-nets of any material, whether or not lined or trimmed: * * * 9505 Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: * * * The Harmonized Commodity Description and Coding System Explanatory Notes ("EN") constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989). The General ENs to chapter 65, HTSUS, state, in relevant part: With the exception of the articles listed below this Chapter covers hat-shapes, hat-forms, hat bodies and hoods, and hats and other headgear of all kinds, irrespective of the materials of which they are made and of their intended use (daily wear, theatre, disguise, protection, etc.). * * * The ENs to heading 9505, HTSUS, state, in relevant part, that the heading covers: (A) Festive, carnival or other entertainment articles, which in view of their intended use are generally made of non-durable material. They include: (1) Festive decorations used to decorate rooms, tables, etc. (such as garlands, lanterns, etc.); decorative articles for Christmas trees (tinsel, coloured balls, animals and other figures, etc); cake decorations which are traditionally associated with a particular festival (e.g., animals, flags). (2) Articles traditionally used at Christmas festivities, e.g., artificial Christmas trees, nativity scenes, nativity figures and animals, angels, Christmas crackers, Christmas stockings, imitation yule logs, Father Christmases. (3) Articles of fancy dress, e.g., masks, false ears and noses, wigs, false beards and moustaches (not being articles of postiche - heading 67.04), and paper hats. However, the heading excludes fancy dress of textile materials, of Chapter 61 or 62. (4) Throw-balls of paper or cotton-wool, paper streamers (carnival tape), cardboard trumpets, “ blow-outs ”, confetti, carnival umbrellas, etc. * * * The protestant argues that the Santa hat with team logo at issue is classified in subheading 9505.10.25, HTSUS, which provides for: “Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof: Christmas ornaments: Other: Other.” In Michael Simon Design, Inc. v. United States, 452 F. Supp 2d. 1316 (Ct. Int’l Trade 2006), aff’d 501 F. 3d 1303 (Fed. Cir. 2007) reh’g denied (Fed. Cir. April 2, 2008) (“Michael Simon”), the Court of International Trade, citing Park B. Smith, Ltd. v. United States, 25 Ct. Int’l Trade 506 (2001), aff’d in part, vacated in part, and remanded, 347 F. 3d 922 (Fed. Cir. 2003), reh’g denied (Fed. Cir. March 16, 2004) (“Park B. Smith”), citing Midwest of Cannon Falls, Inc. v. United States, 20 Ct. Int’l Trade 123 (1996), aff’d in part, rev’d in part, 122 F. 3d 1423 (Fed. Cir. 1997) (“Midwest”) regarding the scope of heading 9505, HTSUS, and the class or kind of merchandise termed “festive articles”, applied a two-prong test for determining whether a particular article is classifiable as a good of heading 9505, HTSUS: “[C]lassification as a ‘festive article’ under Chapter 95 requires that the article satisfy two criteria: (1) it must be closely associated with a festive occasion and (2) the article [be] used or displayed principally during that festive occasion.” Additionally, the Court stated that the items must be “closely associated with a festive occasion” to the degree that “the physical appearance of an article is so intrinsically linked to a festive occasion that its use during other time periods would be aberrant.” CBP rulings have recognized the Santa Claus and the Santa Claus hat as a Christmas motif. See NY N045124, dated December 3, 2008; NY F89474, dated July 27, 2000; NY G88754, dated April 18, 2001; NY H80240, dated May 17, 2001; NY H83646, dated August 3, 2001; NY H86098, dated December 12, 2001; NY I83657, dated July 18, 2002; NY K80499, dated November 18, 2003; NY K82535, dated February 4, 2004; NY N003580, dated December 21, 2006; and HQ 084288, dated July 6, 1989. Applying the Park B. Smith two-part test to the Santa hat at issue in this case, we find that it is closely associated with Christmas, and that it is principally used or displayed at Christmas. The physical appearance of the Sant hat is so intrinsically linked to Christmas that its use or display at any other time would be aberrant. In addition to the guidelines set forth above, general criteria for determining “class or kind” with respect to classification were set forth in United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (1976).  Those criteria include: general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use.   The importer’s submission establishes that the environment of sale will be protestant’s holiday catalogs along with Christmas stockings, Christmas ornaments, and other Christmas or holiday items. The importer also indicates that the merchandise will only be sold during the Christmas season. Therefore, the recognition of the trade, the channels of trade, and the environment of sale all recognize these articles as Christmas holiday articles. The manner of advertisement and display as well as the physical and symbolic characteristics of the subject merchandise are sufficient to establish the economic practicality and the expectation of the ultimate purchaser that he is purchasing a Christmas article, and that the use of the article is likely to be limited to Christmas. Accordingly, we find that the merchandise is of a class or kind of merchandise described as festive articles of heading 9505, HTSUS. The Explanatory Notes to heading 6505, HTSUS, further identify the class of goods covered by Chapter 65, HTSUS, as hats and other headgear of all kinds, irrespective of the materials of which they are made and of their intended use (daily wear, theatre, disguise, protection, etc.). Therefore, we also recognize that the merchandise are of a class or kind of merchandise described as hats and headgear in heading 6505, HTSUS. Since the merchandise is prima facie classifiable in two headings, 9505 and 6505, HTSUS, we believe that GRI 3 must be consulted. According to GRI 3(a), the heading which provides the most specific description of the merchandise shall be preferred to headings providing a more general description. Under this so-called rule of relative specificity, we look to the provision with requirements that are more difficult to satisfy and that describe the merchandise with the greatest degree of accuracy and certainty. See Orlando Food Corp. v. United States, 140 F. 3d 1437, 1441 (1998) (citing United States v. Siemens Am., Inc., 68 C.C.P.A. 62, 653 F. 2d 471, 477 (1981) and United States v. J. Gerber & Co., 58 C.C.P.A. 110, 436 F. 2d 1390, 1392 (CCPA 1971)). We conclude that heading 9505, HTSUS, which provides for festive articles, is more specific than heading 6505, HTSUS, which covers hats and other headgear. It is clear that the requirements of the festive articles provision are more difficult to satisfy. In contrast, the hats provision encompasses items of all construction and for all purposes and uses. Therefore, because the requirements of the festive articles provision are more difficult to satisfy, it is the more specific heading, and under the rule of relative specificity, it governs the classification of the merchandise. See Orlando Food Corp. v. United States, 140 F. 3d 1437, 1441 (1998) (citing United States v. Siemens Am., Inc., 68 C.C.P.A. 62, 653 F. 2d 471, 477 (1981) and United States v. J. Gerber & Co., 58 C.C.P.A. 110, 436 F. 2d 1390, 1392 (CCPA 1971)). Our decision is consistent with Headquarters Ruling Letter (HQ) 084288, dated July 6, 1989, in which a Santa Claus hat made of durable material was classified in heading 9505, HTSUS, as a festive article, and not in Chapter 65, HTSUS. In that ruling we stated that: The Santa Claus hat is an article traditionally used at Christmas festivities during the Christmas season. We believe it most specifically falls within the heading for festive, carnival or other entertainment articles in Chapter 95, in the provision for articles for Christmas festivities and parts and accessories thereof. See also HQ 088410, dated April 18, 1991; New York Ruling Letters (NY) B86115 dated July 2, 1997; B88894 dated October 16, 1997; NY C89727, dated August 5, 1998; NY C89124 dated July 8, 1998; and NY 805111, dated January 6, 1995. Finally, our decision is consistent with HQ H076796, dated December 17, 2009, which classified a Christmas tree shaped hat, a Santa shaped hat, and an Elf shaped hat in heading 9505, HTSUS, as a festive article, and not in Chapter 65, HTSUS. Therefore, in accordance with GRI 3(a), we find that the merchandise is classified in heading 9505, HTSUS, as festive articles. HOLDING: In accordance with GRI 3(a), the Santa hat is classified in heading 9505, HTSUS. It is specifically provided for in subheading 9505.10.25, HTSUS, as: "Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof: Christmas ornaments: Other: Other.” The 2005 general, column one rate of duty was Free. Protest No. 4701-06-100691 is ALLOWED. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to the mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division