Tariff classification of watch boxes covered with paper impregnated with plastic

HQ H190658 December 18, 2012 CLA-2 OT:RR:CTF:TCM H190658 GC CATEGORY: Classification and Marking TARIFF NO.: 4202.99.10 Mr. Robert Eisen, Esq. Baker and McKenzie LLP 1114 Avenue of the Americas New York City, New York 10036 RE: Tariff classification of watch boxes covered with paper impregnated with plastic Dear Mr. Eisen: This letter is in response to your prospective ruling request, dated October 16, 2011, on the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of certain watch boxes imported by your client, E. Gluck Corporation. We apologize for the delay in responding. In the preparation of this ruling, consideration was also given to the independent laboratory report submitted by you via email on August 1, 2012, as well as the report submitted to us by the U.S. Customs and Border Protection Laboratories and Scientific Services (LSS), dated October 5, 2012. FACTS: Your ruling request covers a watch box identified by style number P-B-AKBLU05, which is composed of plastic with paper covering, and features a hinged lid. You indicate that the paper covering of the subject box has been “impregnated” with a plastic material intended to increase the durability of the paper. You submitted two samples of the subject merchandise, along with samples of watch box style number P-B-AKBLU04, which you state is identical in all material respects. With respect to the outer surface of the subject watch box, the LSS Report concludes that the paper is covered, coated or impregnated with a styrene acrylic polymer plastic and acrylic acid. The composition of the outer covering (by weight) is seventy-five percent paper, twenty percent organic polymers, and five percent inorganic material. The “coating/covering is not uniformly applied to the paper”. An inspection of the sample confirms that a uniform layer of plastic is not added to the surface of the paper inasmuch as the visual effect and texture of the paper does not produce a solid coating of plastic. You indicate that the box is intended to be provided to consumers at the point of purchase of watches contained within the box, and is thus not intended for reuse. ISSUE: Whether the outer surface of the subject watch box is composed of a sheeting of plastic or other material? 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. The HTSUS provisions under consideration in this case are as follows: 4202 Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, camera cases, gun cases, holsters and similar containers; traveling 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, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper: Other: * * * 4202.92 With outer surface of sheeting of plastic or of textile materials: * * * 4202.99 Other: Because the instant classification question occurs beyond the four-digit heading level, GRI 6 is implicated. GRI 6 states: For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires. At the six-digit level, the majority of goods under heading 4202, HTSUS, are classified by the material that comprises the “outer surface” of the good. In this instance, the material that comprises the outer layer is a composite material, i.e., the outer layer is composed of a base material of paper to which plastic has been added. CBP addressed this issue in Headquarters Ruling Letter (HQ) 963618, dated August 2, 2002 (citing HQ 087760, dated October 31, 1991), wherein CBP explained: At the four-digit level, heading 4202, HTSUSA, requires that a good be “of or “wholly or mainly covered with” a specified material. However, at the six-digit level, the nomenclature classifies goods by the material which comprises the “outer surface.” In classifying goods such as these, we must distinguish between the requirements of the four and six-digit headings, since they dictate different criteria for classifying goods. This distinction was also discussed in (HQ) 954021[dated November 1, 1993], wherein Customs, noting HQ 087760 [dated October 31, 1991], stated: “Evident in the above are two important distinctions: (1) a covering vs. an outer surface, and (2) classification at the four-digit (or heading) level vs. classification at the six-digit (or subheading) level.” According to the laboratory report, the watch box at issue here is covered with paper coated on its outer surface with a plastics material acrylic type. Thus, at the four-digit, or heading, level, the box is considered to be “wholly or mainly covered” with paper. However, classification at the six-digit level requires consideration of what material constitutes the outer surface. The “outer surface” is that which is both visible and tactile. See HQ 086775, dated July 9, 1990; see also HQ 954021, supra. In a number of rulings, CBP has addressed the issue of whether jewelry box frames, which were made of plastic or metal and were covered with paper backings to which textile materials had been applied, had an outer surface of textiles or paper. Additional U.S. Note 2 of Chapter 42, HTSUS, is instructive in this regard, providing that: For the purposes of classifying articles under subheadings 4202.12, 4202.22, 4202.32, and 4202.92, articles of textile fabric impregnated, coated, covered or laminated with plastics (whether compact or cellular) shall be regarded as having an outer surface of the textile material or of plastic sheeting, depending upon whether and the extent to which the textile constituent or the plastic constituent makes up the exterior surface of the article. The note, and its expression of the concept of “outer surface” by use of the term “exterior surface,” serves as guidance when classifying other articles in heading 4202, HTSUS, which are composed of composite materials. The issue of whether the boxes are covered with “sheeting of plastics” is controlled by Sarne Handbags Corp. v. United States, 100 F.Supp. 2d 1126; 2000 CIT 51 (2000), wherein the court, applying Additional U.S. Note 2 to Chapter 42, HTSUS, found that a handbag made of plastic coated textile was classified as having an outer surface of sheeting of plastic. In Sarne, the Court of International Trade articulated the definition of “sheeting” as “material in the form of or suitable for forming into a broad surface of something that is unusually thin, or is a material in the form of a continuous thin covering or coating.” Id. at 1134. Subsequent to Sarne, CBP has consistently ruled jewelry boxes covered in plastic-coated paper are classifiable in subheading 4202.92, HTSUS. See HQ 966090, dated December 22, 2003; HQ 965563, dated September 24, 2002; HQ 963618, dated August 2, 2002. However, with respect to the watch box at issue, the laboratory report indicates that the plastic added to the paper covering the sample has not in fact been applied uniformly. This is consistent with the visual and tactile inspection of the sample, which reveals an outer surface that has the character of paper and not of plastic sheeting. Thus, applying the principals set forth in Additional U.S. Note 2 of Chapter 42, HTSUS, Sarne, and the rulings following Sarne, we conclude that that the outer surface of the subject jewelry box is not “plastic sheeting” as contemplated in subheading 4202.92, HTSUS, which provides for other articles “with outer surface of sheeting of plastic or of textile materials.” Accordingly, it is classified under subheading 4202.99, HTSUS, which provides for articles with an outer surface of “other” material. HOLDING: By application of GRI 1, the subject watch box, Style P-B-AKBLU05, is classified under heading 4202, HTSUS. By application of GRI 6, it is specifically provided for in subheading 4202.99.10, HTSUS, which provides for, in pertinent part: “[t]runks, suitcases…and similar articles; traveling bags…jewelry boxes…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: Other: Other: Of materials (other than leather, composition leather, sheeting of plastics, textile materials, vulcanized fiber or paperboard) wholly or mainly covered with paper: Of plastics….” The general column one rate of duty, for merchandise classified in this subheading is 3.4 percent ad valorem. Duty rates are provided for your convenience and 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. A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction. Sincerely, Ieva K. O’Rourke, Chief Tariff Classification and Marking Branch