CBP Ruling H097736

HQ H097736 March 29, 2011 CLA-2 OT:RR:CTF:TCM H097736 ASM CATEGORY: Classification TARIFF NO.: 9503.00.00 Ms. Karen Cooper-Martin MGA Entertainment 16300 Roscoe Blvd., #150 Van Nuys, CA 91406 RE: Revocation of NY N027455; Tariff Classification of the "Crashing Waves Water Park" Dear Ms. Cooper-Martin: This is in reference to New York Ruling Letter (NY) N027455, dated June 3, 2008, which was issued to you on behalf of the MGA Entertainment company, concerning the tariff classification of the "Crashing Waves Water Park", under the Harmonized Tariff Schedule of the United States (HTSUS). In that ruling, U.S. Customs and Border Protection ("CBP") classified the merchandise as an article for "general physical exercise" under subheading 9506.99.60, HTSUS. We have reviewed NY N027455 and found it to be in error. For the reasons set forth below, we hereby revoke NY N027455. Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. Section 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 revocation of NY N027455, as described below was published in Vol. 44, No. 24, of the Customs Bulletin on June 9, 2010. No comments were received in response to the notice. FACTS: The subject article, "Crashing Waves Water Park", is an inflatable play area that is designed for outdoor water play. The dimensions are 15 feet in width x 17 feet in length x 10 feet in height. The article has a stair climber on one side leading to a center area that resembles a lighthouse. The light house contains a water cannon. On the other side is a curved water slide that empties into a shallow splash landing area. There is also a crawl-through tunnel under the lighthouse that leads to the splash landing area. A lawn hose connects to the item's tubing to provide the water to the spray cannons and create a slippery surface for sliding. An electric power blower must be kept on continuously for inflation of the structure. The product is designed for children between the ages of 5 and 10 years. ISSUE: Whether the "Crashing Waves Water Park" is classified in subheading 9503.00.00, HTSUS, as a "toy" or in heading 9506.99.60, HTSUS, as an article for "general physical exercise". LAW AND ANALYSIS: Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) 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. The following headings of the HTSUS are under consideration in classifying the subject article: 9503 Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls, other toys; reduced-scale ('scale') models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof * * * 9506 Articles and equipment for general physical exercise, gymnastics, athletics, other sports (including table-tennis) or outdoor games, not specified or included elsewhere in this chapter; swimming pools and wading pools; parts and accessories thereof: The Harmonized Commodity Description and Coding System Explanatory Notes ("ENs") 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, 35128 (August 23, 1989). The EN's to heading 9503 provide, in relevant part, as follows: This heading covers: * * * (D) Other toys. This group covers toys intended essentially for the amusement of persons (children or adults). . . . This group includes: * * * (ix) Toy sports equipment, whether or not in sets (e.g., golf sets, tennis sets, archery sets, billiard sets; baseball bats, cricket bats, hockey sticks). * * * (xxiii) Play tents for use by children indoors or outdoors. The EN to heading 9506, states, in pertinent part, the following: This heading covers: * * * (B) Requisites for other sports and outdoor games (other than toys presented in sets, or separately, of heading 95.03), e.g.: * * * (12) Equipment of a kind used in children's playgrounds (e.g., swings, slides, see-saws and giant strides). * * * The EN to heading 9503 specifically indicates that "This group covers toys intended essentially for the amusement of persons (children or adults)". In order to be classified as a "toy" of Chapter 95, HTSUS, the toy must be designed and used principally for amusement and should not serve a utilitarian purpose. See HQ 086330, dated May 14, 1990; HQ 952186, dated April 29, 1993; HQ 954132, dated February 15, 1994; HQ 956779, dated September 29, 1994; and HQ 961530, dated October 21, 1998. In Minnetonka Brands, Inc. v. United States, 110 F. Supp. 2d 1020 (CIT 2000), the court classified full-figured, three-dimensional, plastic objects in the form of well-recognized children's characters as ". . . [t]oys representing animals or non-human creatures . . . Other" under subheading 9503.49.00, HTSUS. Id. at 1029. The court found that because the evidence showed that " ... the subject merchandise belongs to the class or kind of merchandise whose principal use is amusement, diversion or play", the merchandise is properly classified as "toys" of heading 9503, HTSUS. Id. at 1028. In Minnetonka, the CIT further noted that because heading 9503, HTSUS, is, in relevant part, a principal use provision, classification under this provision is controlled by the principal use "of goods of that class or kind to which the imported goods belong" in the United States at or immediately prior to the date of importation. See Additional U.S. Rule of Interpretation 1(a), HTSUS.1 The principal use of the class or kind of goods to which an import belongs is controlling, not the principal use of the specific import. (citations omitted). "Principal use" is defined as the use "which exceeds any other single use." (citations omitted). As a result, "the fact that the merchandise may have numerous significant uses does not prevent the Court from classifying the merchandise according to the principal use of the class or kind to which the merchandise belongs. (citations omitted). See E.M. Chems. v. United States, 20 C.I.T. 382, 387-388 (Ct. Int'l Trade 1996). As stated in United States v. The Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2nd 373 (1976), certain factors must be looked at to determine whether imported merchandise is of a certain "class or kind" as that expression is used in Additional U.S. Rule of Interpretation 1(a). These factors include: (1) the physical characteristics of the merchandise, (2) the expectation of the ultimate purchases, (3) the channels of trade of the merchandise, (4) the environment of the sale (accompanying accessories, manner of advertisement and display) (5) use in the same manner as merchandise which defines the class, (6) the economic practicality of so using the import, and (7) recognition in the trade of this use. In the instant case, we apply the Carborundum factors as follows: (1) The general physical characteristics of the merchandise: The use of bright primary colors is especially attractive and amusing to young children. We recognize that the slide and splash landing component is akin to playground equipment listed in EN 95.06. However, in HQ 966135, dated March 28, 2003, CBP classified a plastic sandbox as playground equipment of heading 9506 because it was sturdy enough "... to be stored in all kinds of weather". Even though the article is designed for outdoor use, it is not sturdy enough to be stored outdoors in all kinds of weather. Therefore, it is not "of a kind used in children's playgrounds". Accordingly, this feature weighs in favor of classification as toys. _________________ 1 Additional U.S. Rules of Interpretation 1(a), HTSUS, provides: 1. In the absence of special language or context which otherwise requires-- (a) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use; * * * (2) The expectation of the ultimate purchasers: The ultimate purchasers expect that the product will be used for outdoor domestic family use. Such limited use is more representative of a toy rather than an article of outdoor play equipment. (3 & 4) The channels of trade in which the merchandise moves and environment of sale: The instant merchandise is sold in toy stores and the toy section of department stores, drug stores and supermarkets. This factor weighs in favor of classification as toys. (5) The usage of the merchandise: Compared to the durable rental units that can be used/stored outdoors in all kinds of weather and for accommodation of many children at one time, the subject article is for personal backyard use. This factor weighs in favor of classification as toys. (6) The economic practicality of so using the import: The merchandise is moderately priced compared to the inflatable structures used for carnivals which may be retail priced from $1000.00 to $2300.00 per unit. See New York Ruling (NY) N021533, dated January 31, 2008. This factor weighs in favor of toys. (7) The recognition in the trade of use: The subject merchandise is recognized in the trade as an inflatable play area designed to amuse young children by splashing and sliding in a backyard environment. This factor weighs in favor of toys. On the balance, we find that the merchandise belongs to the class or kind of goods known as toys which are classified in heading 9503, HTSUS. It is the conclusion of CBP, based on the above discussion, that the subject "Crashing Waves Water Park" is primarily used for amusement. As such, the merchandise is classified as a "toy" in heading 9503, HTSUS, and is excluded from classification in heading 9506, HTSUS. See EN 95.06(B). HOLDING: The subject merchandise, identified as the "Crashing Waves Water Park", is correctly classified in subheading, 9503.00.00, HTSUS, which provides for "Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls, other toys; reduced-scale ("scale") models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof, Other". This provision is duty free at the general column one rate of duty. EFFECT ON OTHER RULINGS: NY N027455, dated June 3, 2008, is hereby revoked consistent with the foregoing. In accordance with 19 U.S.C. Section 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 6