Revocation of NY N084615, dated December 11, 2009; classification of Amalfi Lanterns from India

HQ H097728 March 28, 2014 CLA-2 OT:RR:CTF:TCM H097728 DSR CATEGORY: Classification TARIFF NO.: 9405.50.40 Mark K. Neville, Jr., Esq. International Trade Counsellors 80 Midland Street Bridgeport, CT 06605 RE: Revocation of NY N084615, dated December 11, 2009; classification of Amalfi Lanterns from India Dear Mr. Neville: This is in response to your letter, dated March 11, 2010, requesting reconsideration of New York Ruling Letter (NY) N084615, dated December 11, 2009. NY N084615 pertains to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of decorative glass articles referred to as “Amalfi Lanterns.” We have reviewed the tariff classification of the articles and have determined that the cited ruling is in error. 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 Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), a notice was published in the Customs Bulletin, Vol. 47, No. 50, on December 18, 2013, proposing to revoke NY N084615 and proposing to revoke any treatment accorded to substantially identical transactions. No comments were received in response to the notice. Therefore, NY N084615 is revoked for the reasons set forth in this ruling. FACTS: According to the information submitted, each of the articles has the form of a glass box with a metal frame. Each has a handle that would allow the articles to be hung from a projection. The articles may also be placed upon flat surfaces. The sizes of the articles are as follows: 6.5 inches high, 10.75 inches high, 15.25 inches high, 19.75 inches high and 24.5 inches high. In addition, the submitted information indicates that the unit value of each of these products is over five dollars. The requestor, Restoration Hardware, Inc. (“Restoration”), asserts that the articles are designed, intended, and marketed for use as lanterns that hold appropriately sized candles. In NY N084615, CBP classified the articles in subheading 7013.99.90, HTSUS, and described the articles as “general purpose decorative glass articles capable of holding a wide variety of items” and that “do not have clear design features for stabilizing burning candles.” In addition, we noted that, according to the information submitted with the ruling request, the articles failed testing requirements for use as candle accessories according to ASTM standards F2417 and F2601. Restoration asserts that the articles are instead classifiable under subheading 9405.50.40, HTSUS, as non-electrical lamps, not elsewhere or specified or included, or, in the alternative, under subheading 7326.90.85, HTSUS, as other articles of iron or steel. ISSUE: Whether the Amalfi Lanterns are classified in subheading 7013.99.90, HTSUS, which provides for other glassware valued over five dollars each; in subheading 9405.50, HTSUS, as non-electrical lamps, not elsewhere specified or included; in subheading 7326.90, HTSUS, as other articles of iron or steel; or subheading 8306.29, HTSUS, as statuettes and other ornaments of base metal? 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 if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized.  The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 8980, 54 Fed. Reg. 35127 (August 23, 1989). The HTSUS provisions under consideration in this case are as follows: 7013 Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes (other than that of heading 7010 or 7018) * * * Other glassware: * * * 7013.99 Other: * * * Other: * * * Other: Valued over $3 each: * * * Other: * * * 7013.99.90 Valued over $5 each. 7326 Other articles of iron or steel: * * * 7326.90 Other: * * * Other: * * * Other: * * * 7326.90.85 Other: * * * * 8306 Bells, gongs and the like, nonelectric, of base metal; statuettes and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal and base metal parts thereof: * * * Statuettes and other ornaments, and parts thereof: * * * 8306.29.00 Other. * * * * 9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included: * * * * 9405.50 Non-electrical lamps and lighting fittings: * * * Other: * * * 9405.50.40 Other. * * * * Restoration makes two assertions regarding the procedural aspects of the issuance of NY N084615. First, Restoration asserts that CBP has created an established and uniform practice (“EUP”) with regard to the classification of the subject articles under subheading 9405.50, HTSUS, and, by implication, that CBP has failed to comply with the requirements of 19 U.S.C. §1315(d), which concerns the effective date of administrative rulings resulting in higher rates. Alternatively, Restoration argues that CBP has “previously accorded substantially similar articles with a ‘treatment’ amounting to an EUP,” and the issuance of NY N084615 was not done in accordance with the notice and comment provisions of 19 U.S.C. § 1625(c). a. Section 1315(d) 19 U.S.C. § 1315(d) sets forth the publication requirement for administrative rulings that result in higher duty rates. It states the following: No administrative ruling resulting in the imposition of a higher rate of duty or charge than the Secretary of the Treasury shall find to have been applicable to imported merchandise under an established and uniform practice shall be effective with respect to articles entered for consumption or withdrawn from warehouse for consumption prior to the expiration of thirty days after the date of publication in the Federal Register of notice of such ruling.       The plain language of the statute bars the imposition and collection of duty increases where an EUP exists that charges a lower tariff rate on the particular merchandise, unless the higher rate has been fixed by an administrative ruling, notice of which has been published in the Federal Register. The corresponding regulatory provision, 19 C.F.R. 177.10, provides the following: (c) Changes of practice. Before the publication of a ruling which has the effect of changing an established and uniform practice and which results in the assessment of a higher rate of duty within the meaning of 19 U.S.C. 1315 (d), notice that the practice (or prior ruling on which that practice was based) is under review will be published in the Federal Register and interested parties will be given an opportunity to make written submissions with respect to the correctness of the contemplated change . . . . (e) Effective dates. Except as otherwise provided in § 177.12(e) or in the ruling itself, all rulings published under the provisions of this part will be applied immediately. If the ruling involves merchandise, it will be applicable to all unliquidated entries, except that a change of practice resulting in the assessment of a higher rate of duty or increased duties shall be effective only as to merchandise entered for consumption or withdrawn from warehouse for consumption on or after the 90th day after publication of the change in the Federal Register. The Court of International Trade has spoken to the issue of which types of importing scenarios serve to create an EUP, stating that such a determination can be made on a case-by-case basis according to certain guiding principles, with consideration of the following factors: ...the number of entries resulting in the alleged uniform classifications, the number of ports at which the merchandise was entered, the period of time over which the alleged uniform classifications took place, and whether there had been any uncertainty regarding the classification over its history. In essence, the question is whether a uniform and established practice existed that would lead an importer, in the absence of notice that change in classification will occur, reasonably to expect adherence to the established classification practice when making an importation. Heraeus-Amersil, Inc. v. United States, 617 F. Supp. 89, 93, 9 C.I.T. 412, 415-16 (1985), aff’d 795 F.2d 1575 (Fed. Cir, 1986). Here, Restoration alleges that an EUP existed because “substantially similar items have been imported by [Restoration] and other home furnishings companies for years,” specifically citing to a single ruling letter, , dated May 18, 2007, in which CBP classified one entry of “Napa style” brass lanterns in subheading 9405.50, HTSUS, as non-electric lamps and lighting fittings. One ruling concerning one entry at one port does not an EUP make. See Emil Dienert v. United States, 9 Cust. Ct. 411, Abs. 47,544 (1942) (the court found that 5 to 8 years of classifying merchandise as a particular article constituted an established and uniform practice); compare Siemens America, Inc. v. United States, 692 F.2d 1382 (Fed. Cir. 1982), aff'g 2 C.I.T. 136 (1981) (100 entries of merchandise classified under a particular item number over possibly 2 years at a single port was not enough to create de facto an established and uniform practice). Additionally, there is some question as to whether the item considered in HQ W563490 is substantially similar to the subject Amalfi lanterns. HQ W563490 involved an analysis of the “value-content” requirements of the country of origin rules of the GSP, and the articles’ resultant eligibility for preferential treatment. It did not address the classification of the goods or the characteristics that would make them suitable for use as lanterns. There was no discussion regarding the typical features of a non-electric lamp or lighting fitting, nor was there discussion of the roles of the articles’ component materials. While both styles of lanterns visually appear to be able to hold candles and be placed on flat surfaces, that is insufficient information with which to find them to be “substantially similar.” Considering the above, we determine that the evidence is insufficient to demonstrate that an EUP classifying identical or similar merchandise in subheading 9405.50, HTSUS, was in effect at the time of entry or liquidation of the subject merchandise. b. Section 1625(c)(2) 19 U.S.C. § 1625(c) sets forth the notice and comment requirements for the modification of treatment previously accorded to substantially similar transactions. It states the following: A proposed interpretive ruling or decision which would – (1) modify (other than to correct a clerical error) or revoke a prior interpretive ruling or decision which has been in effect for at least 60 days; or (2) have the effect of modifying the treatment previously accorded by the Customs Service to substantially identical transactions; shall be published in the Customs Bulletin. The Secretary shall give interested parties an opportunity to submit, during not less than the 30-day period after the date of such publication, comments on the correctness of the proposed ruling or decision. After consideration of any comments received, the Secretary shall publish a final ruling or decision in the Customs Bulletin within 30 days after the closing of the comment period. The final ruling or decision shall become effective 60 days after the date of its publication. Title 19 of the Code of Federal Regulations (CFR) sets forth the evidentiary standards for determining whether treatment was previously accorded to substantially similar transactions. 19 CFR 177.12(c)(1) provides, in pertinent part, as follows: (i) There must be evidence to establish that: (A) There was an actual determination by a Customs officer regarding the facts and issues involved in the claimed treatment; (B) The Customs officer making the actual determination was responsible for the subject matter on which the determination was made; and (C) Over a 2-year period immediately preceding the claim of treatment, Customs consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other Customs actions with respect to all or substantially all of that person's Customs transactions involving materially identical facts and issues; … (iv) The evidentiary burden as regards the existence of the previous treatment is on the person claiming that treatment. The evidence of previous treatment by Customs must include a list of all materially identical transactions by entry number (or other Customs assigned number), the quantity and value of merchandise covered by each transaction (where applicable), the ports of entry, the dates of final action by Customs, and, if known, the name and location of the Customs officer who made the determination on which the claimed treatment is based. In addition, in cases in which an entry is liquidated without any Customs review (for example, the entry is liquidated automatically as entered), the person claiming a previous treatment must be prepared to submit to Customs written or other appropriate evidence of the earlier actual determination of a Customs officer that the person relied on in preparing the entry and that is consistent with the liquidation of the entry. In support of its argument, Restoration has provided photos from catalog photographs of the Napa style lanterns of HQ W563490 and the instant Amalfi lanterns, with the blanket assessment that the Napa style lanterns are “quite obviously identical [to the Amalfi lanterns] in overall style and intended use.” Restoration’s letter, supra, at 2. However, as discussed supra, HQ W563490 did not address the classification of the goods or the characteristics that would make them suitable for use as lanterns. Even if one were to favor Restoration’s contention that the Napa style lanterns of HQ W563490 are “quite obviously identical [to the Amalfi lanterns] in overall style and intended use,” Restoration has failed to show that, over a 2-year period immediately preceding its claim of treatment, CBP consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other CBP actions with respect to all or substantially all of Restoration’s CBP transactions involving materially identical facts and issues. Therefore, we find that the notice and comment requirements of 19 U.S.C. § 1625(c) were inapplicable with regard to the issuance of NY N084615. Proceeding to the classification of the subject articles, Note 1(e) to Chapter 70, HTSUS, states that Chapter 70 does not cover “Lamps or lighting fittings, illuminated signs, illuminated name-plates or the like, having a permanently fixed light source, or parts thereof of heading 9405.” EN 70.13(f) echoes that exclusion with regard to heading 7013. Also, Note 1(k) to Section XV (which includes heading 7326, HTSUS) excludes articles of Chapter 94 from coverage in that Section. EN 73.26 notes that heading 7326, HTSUS, does not cover articles included in Chapters 82 or 83, HTS, or articles more specifically covered elsewhere in the Nomenclature. Finally, EN 83.06 states the following: [Statuettes, and other ornaments, of base metal] comprises a wide range of ornaments of base metal (whether or not incorporating subsidiary non-metallic parts) of a kind designed essentially for decoration, e.g., in homes, offices, assembly rooms, places of religious worship, gardens. It should be noted that the group does not include articles of more specific headings of the Nomenclature, even if those articles are suited by their nature or finish as ornaments. The group covers articles which have no utility value but are wholly ornamental, and articles whose only usefulness is to contain or support other decorative articles or to add to their decorative effect (emphasis added) … Therefore, if the articles at issue are classifiable in heading 9405, HTSUS, as “lamp[s] or lighting fitting[s],” then, by virtue of Note 1(e) to Chapter 70, HTSUS, and EN 70.13, the articles are excluded from heading 7013, HTSUS. They would be excluded from heading 7326, HTSUS, by application of Note 1(k) to Section XV. Finally, if the articles possess utility value, they are excluded from heading 8306, HTSUS, by the EN to that heading. Heading 9405, HTSUS, provides, in relevant part, for “Lamps,” which are not defined in the HTSUS. In Headquarters Ruling letter (HQ) HQ 965248 July 26, 2002, CBP utilized the dictionary definitions of lamps. See also HQ H042586, dated January 26, 2009. In HQ 965248, we noted: "Lamp" is defined in The Random House College Dictionary, Random House, Inc. (1973), at 752, as "a device providing an isolated source of artificial light". Webster’s New Collegiate Dictionary, G. & C. Merriam Company (1979), at 639, defines "lamp" as "any of various devices for producing light or heat." Restoration states that the subject articles are not decorative glass articles but are instead of a utilitarian nature, and are classified under subheading 9405, HTSUS, as lamps. Restoration asserts that (with the exception of the smallest sized articles) the articles possess circular stamped depressions in their metal bases that provide stability for candles that are placed inside of the articles. The smallest sized articles do not possess such depressions and are designed only for use with very stable tea light candles. The articles also possess four glass panels to protect a candle’s flame, with one panel opening for candle placement, lighting, and extinguishing. The articles’ warning labels indicate that they are used as lanterns with candles. The articles also possess vented tops for heat dissipation and handles for placing the candles on hooks or stanchions. Finally, Restoration states that the marketing literature for the articles shows that they are used in outdoor settings (decks, porches). We do not dispute Restoration’s contention that the glass panels can help to protect a candle’s flame from gusts of wind or breezes, and that one panel can open to accommodate candle placement, lighting, and extinguishing. Nor do we dispute that the vented tops may aid in heat dissipation. Restoration also claims that the existence of handles is an essential criterion for classification of articles as lanterns, citing NY 073809, HQ W968278 (flashlights v. lanterns). Restoration’s reliance on HQ W968278 and NY 073809 is misguided. At issue in those rulings was the applicability of heading 8513, HTSUS, and its requirement of portability. While we note that that the ENs to heading 9405, HTSUS, describe “portable lamps,” which includes “hand lanterns,” they also have two references to lamps for exterior lighting and refer to “porch and gate lamps,” with no reference to the portability of such lamps. As explained below, the instant analysis of the applicability of heading 9405, HTSUS, is not driven by the portability of the subject articles but by ability of the articles to provide lighting. CBP has consistently noted that a non-electric lamp or lighting fitting should include design features to contain or stabilize a burning source of light while providing unobstructed light to the surrounding area. See NY N094121, dated March 4, 2010; NY N134835, dated December 28, 2010; NY N113545, dated July 19, 2010; NY N064544, dated July 7, 2009. Here, the articles contain flat surfaces with faint, circular depressions that are designed to support a candle. Although there may be some doubt as to whether the depressions are deep enough to effectively stabilize a candle while the articles are being carried by hand and moving about, there is no doubt that while stationary at least, the articles can act as “lamps” by "providing an isolated source of artificial light" or “producing light or heat." While ASTM standards F2417 and F2601 may be helpful in determining the extent to which the articles may effectively be used when carried by hand, the fact remains that the articles possess characteristics that allow them to act as lamps. We therefore find that the subject articles are classifiable under heading 9405, HTSUS, as lamps, and are therefore excluded from all other headings under consideration. Finally, in your letter you inquired about the applicability of the Generalized System of Preferences (GSP) to this merchandise. Articles classifiable under subheadings 9405.50.40, HTSUS, which are products of India, may be entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, you may visit www.cbp.gov and search for the term “GSP.”  This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. HOLDING: By application of GRI 1, the subject “Amalfi Lanterns” are classified in heading 9405, HTSUS, and specifically in subheading 9405.50.40, HTSUS, as “Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included: Non-electrical lamps and lighting fittings: Other: Other.” The column one general rate of duty is 6% ad valorem. However, the articles may be entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUSA and the accompanying duty rates are provided at www.usitc.gov/tata/hts.EFFECT ON OTHER RULINGS: NY N084615, dated December 11, 2009, is hereby 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