Internal Advice Request; classification of dinnerware

HQ H226264 January 3, 2014 CLA-2 OT:RR:CTF:TCM HQ H226264 TNA CATEGORY: Classification TARIFF NO.: 6911.10.10; 6912.00.20 Port Director, Service Port-New York/Newark U.S. Customs and Border Protection 1100 Raymond Boulevard Newark, NJ 07102 Attn: Miriam Destra, Import Specialist RE: Internal Advice Request; classification of dinnerware Dear Port Director: This is in response to your request for internal advice, dated June 11, 2012, concerning the classification of tableware imported by Marck & Associates (“Marck” or “the importer”) under the Harmonized Tariff Schedule of the United States (“HTSUS”). In reaching our decision, we have taken into consideration additional arguments made during a conference between members of my staff and Marck’s counsel on August 11, 2011 and November 15, 2012, as well as supplemental submissions made on July 7, 2011, November 7, 2011, September 24, 2012, and April 30, 2013. FACTS: The subject merchandise consists of items from the Brighton, Dover, Roma, and Valencia styles of Marck’s dinnerware. Samples of each item were sent to a U.S. Customs and Border Protection (“CBP”) laboratory for testing. Separate laboratory reports were issued for each item. The Brighton Style items at issue consist of six plates, and one platter. All have a finished white body, are translucent and absorb less than 0.5% of their weight in water. CBP’s laboratory found that these items do not contain phosphorous, and all meet the definition of porcelain found in Additional U.S. Note 5(a) to Chapter 69, HTSUS. Furthermore, they all contain a logo identifying them as “ITI, China, 5-1.” Several items of the Dover style are at issue here: one saucer, four bowls, four plates, and a platter. These items all contain a logo identifying them as “ITI, China, 5-1.” CBP’s laboratory found that the items of the Dover line meet the definition of porcelain within the meaning of Additional U.S. Note 5(a) to Chapter 69, HTSUS, contain no phosphorous, and absorb less that 0.5% of their weight in water. In addition, many of the samples obtained by the CBP laboratory contained an adhesive label affixed to the back of the plate that read “International Tableware, Inc.,” and identified the item by item number, style, and item type. At the November 15, 2012 meeting with CBP, counsel conceded that the Dover line of Marck’s merchandise is made of porcelain. Several items of the Roma style are at issue here: three bowls, two plates, and a platter. The samples received by the CBP laboratory all contained a logo in black lettering which reads “ITI China.” After testing these items, the laboratory found that they had off-white bodies, were translucent, absorbed less than 0.5% of their weight in water, and contained no phosphorous. The laboratory concluded that these items are porcelain within the meaning of Note 5(a) to chapter 69, HTSUS. One item of the Valencia style, a plate, is at issue here. The sample received by the CBP laboratory contains a logo on the back of the plate, whose black lettering read “ITI China 6-2.” After testing, the lab found that the plate is white in color and absorbs 0.18% of its weight in water and conforms to the definition of porcelain of Note 5(a) to Chapter 69, HTSUS. Marck has been entering the merchandise of the Roma and Valencia styles under subheading 6912.00.39, HTSUS, which provides for “Ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china: Tableware and kitchenware: Other: Other: Available in specified sets: In any pattern for which the aggregate value of the articles listed in additional U.S. note 6(b) of this chapter is over $38.” Marck has been entering items of the Brighton and Dover styles under subheading 6911.10.37, HTSUS, which provides for “Tableware, kitchenware, other household articles and toilet articles, of porcelain or china: Tableware and kitchenware: Other: Other: Available in specified sets: In any pattern for which the aggregate value of the articles listed in additional U.S. note 6(b) of this chapter is over $56: Aggregate value not over $200.” Marck also claims that 60-65% of the subject merchandise is sold for household use, and that the remaining 35-40% is sold for restaurant or hotel use. ISSUES: 1. Whether the subject merchandise is classified in heading 6911, HTSUS, as porcelain tableware, or under heading 6912, HTSUS, as ceramic tableware? 2. Whether the subject merchandise is classified as for hotel or restaurant use, or for other (household) tableware? 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, GRIs 2 through 6 may then be applied in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs. The HTSUS provisions under consideration are as follows: 6911 Tableware, kitchenware, other household articles and toilet articles, of porcelain or china: 6911.10 Tableware and kitchenware: 6911.10.10 Hotel or restaurant ware and other ware not household ware Other: Other: Available in specified sets: In any pattern for which the aggregate value of the articles listed in additional U.S. note 6(b) of this chapter is over $56: 6911.10.37 Aggregate value not over $200 * * * 6912.00 Ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china: Tableware and kitchenware: Other: 6912.00.20 Hotel or restaurant ware and other ware not household ware Other: Available in specified sets: 6912.00.39 In any pattern for which the aggregate value of the articles listed in additional U.S. note 6(b) of this chapter is over $38 Additional U.S. Note 5 to Chapter 69, HTSUS, states, in pertinent part, the following: For the purposes of headings 6909 through 6914: (a) The terms “porcelain,” “china” and “chinaware” embrace ceramic ware (other than stoneware), whether or not glazed or decorated, having a fired white body (unless artificially colored) which will not absorb more than 0.5 percent of its weight of water and is translucent in thicknesses of several millimeters. The term “stoneware” as used in this note, embraces ceramic ware which contains clay as an essential ingredient, is not commonly white, will absorb not more than 3 percent of its weight of water, and is naturally opaque (except in very thin pieces) even when absorption is less than 0.1 percent… (c) The term “earthenware” embraces ceramic ware, whether or not glazed or decorated, having a fired body which contains clay as an essential ingredient, and will absorb more than 3 percent of its weight of water. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not 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 (Aug. 23, 1989). The EN to heading 6911, HTSUS, provides, in pertinent part: See the Explanatory Note to heading 69.12. The EN to heading 6912, HTSUS, provides, in pertinent part: Tableware, kitchenware, other household articles and toilet articles are classified in heading 69.11 if of porcelain or china, and in heading 69.12 if of other ceramics such as stoneware, earthenware, imitation porcelain (see General Explanatory Note to sub-Chapter II). The General Explanatory Note to sub-Chapter II of heading 6912, HTSUS, provides, in pertinent part: (I) PORCELAIN OR CHINA Porcelain or china means hard porcelain, soft porcelain, biscuit porcelain (including parian) and bone china. All these ceramics are almost completely vitrified, hard, and are essentially impermeable (even if they are not glazed). They are white or artificially colored, translucent (except when of considerable thickness), and resonant. Hard porcelain is made from a body composed of kaolin (or kaolinic clays), quartz, feldspar (or feldspthoids), and sometimes calcium carbonate. It is covered with a colorless transparent glaze fired at the same time as the body and thus fused together. Soft porcelain contains less alumina but more silica and fluxes (e.g., feldspar). Bone china, which contains less alumina, contains calcium phosphate (e.g., in the form of bone ash); a translucent body is thus obtained at a lower firing temperature than with hard porcelain. The glaze is normally applied by further firing at a lower temperature, thus permitting a greater range of underglaze decoration… We first address classification at the heading level as between headings 6911, HTSUS, and 6912, HTSUS. We note that the CBP laboratory concluded that Style Numbers BR-5, TBR-16, BR-6, BR-8, BR-9, DO-2, DO-24, DO-11, DO-10, DO-4, DO-8, DO-31, DO-5, DO-7, DO-34, BR-13, BR-7, WRO-15, RO-10, RO-5, VA-7 are made of porcelain within the meaning of Additional U.S. Note 5(a) to Chapter 69, HTSUS. Furthermore, counsel conceded that Marck’s Dover line is made of porcelain. Hence, these items cannot be classified in heading 6912, HTSUS. To the contrary, they are described by heading 6911, HTSUS, which provides for “Tableware, kitchenware, other household articles and toilet articles, of porcelain or china.” The CBP laboratory concluded that Item Number RO-12 met the definition of ceramic articles and of earthenware within the meaning of Additional U.S. Note 5(a) to Chapter 69, HTSUS. As a result, it is described by the terms of heading 6912, HTSUS, which provides for “Ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china.” The CBP laboratory did not make a specific finding as to the composition of Item Numbers RO-11 and RO-3 within the meaning of Additional U.S. Note 5(a) to Chapter 69, HTSUS. Nonetheless, it made a finding with respect to each of the factors in determining whether an item is porcelain under Note 5(a). All three factors are required for an item to be considered porcelain within the meaning of Note 5(a). See Additional U.S. Note 5(a) to Chapter 69, HTSUS; see also HQ 958647, dated June 16, 1997. As a result, we now examine the remaining items in light of these factors to determine whether they are porcelain. With respect to the Roma bowl, item number RO-11, Laboratory Report NY20111494 concluded that it has a white fired body, is not translucent in a thickness of several millimeters, and absorbs 0.17% of its weight in water. Thus, while RO-11 contains two of the three characteristics of porcelain, it is lacking the third and therefore cannot be classified as porcelain on heading 6911, HTSUS. As a result, RO-11 is described by the terms of heading 6912, which provides for “Ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china.” With respect to the Roma plate, Style Number RO-3, Laboratory Report NY20111492 concluded that it has a white fired body, is not translucent in a thickness of several millimeters, and absorbs 0.53% of its weight in water. Thus, RO-3 lacks two of the three factors of porcelain and cannot be classified as such. As a result, it is described by the terms of heading 6912, which provides for “Ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china.” There is no dispute that the instant merchandise is tableware and kitchenware within the meaning of the six-digit level of both headings at issue under GRI 6. Rather, the issue is whether the instant merchandise belongs to the class or kind of goods described as “hotel or restaurant ware and other ware not household ware.” This provision has been found to be a use provision. See HQ 960552, dated March 2, 1999; HQ W967535, dated July 1, 2005; HQ 959745, dated July 20, 1998. To determine principal use, CBP has consistently applied the factors that the court established in United States v. Carborundum Company. See United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979. These factors include: 1) general physical characteristics; 2) expectation of the ultimate purchaser; 3) channels of trade; 4) environment of sale (accompanying accessories, manner of advertisement and display); 5) usage of the merchandise; 6) economic practicality of so using the import; and 7) recognition in trade of this use. See United States v. Carborundum Company, 63 CCPA 98. See also United States v. The Baltimore & Ohio R.R. Co., 47 C.C.P.A. 1; C.A.D. 719 (C.C.P.A. 1959). See also Lenox Collections v. United States, 20 C.I.T. 194; 18 Int’l Trade Rep. (BNA) 1181; 1996 Ct. Intl. Trade LEXIS 38; SLIP OP. 96-30 (Ct. Int’l Trade 1996). CBP has also applied this principle in subsequent rulings. See, e.g., HQ 082780, dated December 18, 1989. Courts have also stated that principal use is defined as the use which “exceeds all other uses.” See Lenox Collections, 20 C.I.T. 194, 196. See also NY C88291, dated December 11, 1998. In HQ 082780, dated December 18, 1989, CBP classified a number of patterns of china dinnerware that were produced chiefly for household use, but were also marketed and sold to hotels and restaurants for use in their finer dining sections. After reviewing the evidence presented, CBP found that household china is different from hotel china in both physical and design characteristics because hotel china is heavier in weight and is stackable and chip resistant. The restaurant plates also generally do not have a center design. CBP also found that hotel china is generally less expensive than household china and is offered for sale by independent sales representatives to wholesalers or hotel chains, an industry that also has its own trade publications and trade shows. Furthermore, if the dinnerware were marked with the crest or initials of the establishment, this spoke in favor of it belonging to the class chiefly used in hotels or restaurants. By contrast, household china was found to be generally lighter in weight, more expensive, and did not possess some of the characteristics of hotel ware. See HQ 082780. Furthermore, in HQ W967570, dated January 31, 2008, CBP considered whether Pillivuyt’s porcelain tableware and kitchenware was principally for household use or hotel and restaurant use. In an analysis similar to the one undertaken in HQ 082780, CBP cited prior rulings and various reference books to determine what physical characteristics are indicative of household use versus restaurant and hotel use. In American china, such characteristics included composition, translucency, degree of absorption, and a very high mechanical shock resistance. Thickness was also a significant factor, as one cited source divided American hotel china, which it described as “vitrified ware of very high strength,” into three grades based on wall thickness: Grade (1), “Thick china,” which had 5/16 to 3/8 inch walls and is used in lunch counters and army messes; Grade (2), “Hotel China,” which contained 5/32 to ¼ inch walls and were used in hotels and restaurants; and Grade (3), “medium-weight China”, which had less than ¼ inch walls and was used in high-class eating places, home use, and also for numerous jars, trays, etc., in hospitals. See HQ W967570; HQ 959745, dated July 20, 1998; HQ 962208, dated April 19, 2000; Rexford Newcomb, Jr., Ceramic Whitewares, Pitman Publishing Corp., New York (1947) at pp. 222 and 227; Felix Singer & Sonja S. Singer, Industrial Ceramics, Chemical Publishing Co., Inc., New York (1963), at p. 1096. We note that dishes’ thickness has long been considered a relevant factor in determining the use of the merchandise. See, e.g., HQ 959745; HQ W967570. HQ W967570 also examined trade publications to determine the physical characteristics that are standard for restaurant and hotel ware, and stated, “the single greatest thing a hotel demands and we produce are plain, white, round plates.” See HQ W967570, citing an article by Villeroy & Boch, USA at http://findarticles.com/p/ articles/mi_m3072/is_7_219/ai_n6028235. HQ W967570 then examined the rest of the Carborundum factors. Three out of the seven factors conclusively indicated household use, while the remaining four were inconclusive. As a result, HQ W967570 found that Pillivuyt’s French porcelain was for household use. We acknowledge that the standards in the rulings that we have cited here have been developed for merchandise of heading 6912, HTSUS. However, because the terms of the subheadings of headings 6911 and 6912, HTSUS, are identical, these standards are also instructive for products of 6911, HTSUS. In the present case, we apply the Carborundum factors, first to the merchandise that we have classified in heading 6911, HTSUS, as follows: (1) physical characteristics. The styles at issue are white and plain. Each piece is round and stackable. Furthermore, a number are not translucent, and the ones that are translucent are not delicate dishes; to the contrary, many of the styles at issue have been glazed and all of them are heavy dishes that are durable and able to withstand heavy use. In addition, samples that CBP obtained of each of these styles contain the logo of International Tableware Incorporated. International Tableware Incorporated (“ITI”) is Marck’s restaurant supply line. These characteristics are indicative of restaurant or hotel use. Furthermore, one characteristic of commercial china is that it is vitrified. Restaurant China, Volume 1: Identification and Value Guide for Restaurant, Airline, Ship, and Railroad Dinnerware states that “during vitrification the body components fuse together, making the china: (1) non-porous, thus resisting penetration of liquids even when glaze is worn or chipped and (2) more durable, resisting breakage caused by heat and handling.” See Barbara J. Conroy, Restaurant China, Volume 1: Identification and Value Guide for Restaurant, Airline, Ship, and Railroad Dinnerware, Collector Books, Paducah (1998) at p. 7. In the present case, Marck’s website states that the subject merchandise has been vitrified and that it has a low water absorption rate. See www.international tableware.com/aboutus.aspx. Vitrified china is defined as “fired at a higher temperature and vitrified during the first (bisque) firing, then fired at a lower temperature (glaze or gloss firing).” See Barbara J. Conroy, Restaurant China, Volume 1: Identification and Value Guide for Restaurant, Airline, Ship, and Railroad Dinnerware, Collector Books, at page 7 (Paducah 1998). In short, vitrification makes dinnerware more durable and resistant to chipping, factors which indicate restaurant or hotel use. See, e.g., HQ W967570; HQ 957520, dated June 16, 1997. Marck misunderstands the importance of vitrification in the tariff analysis, claiming that their vitrified product is commercial china. However, “commercial china” is not the tariff term we are analyzing here. Rather, the hardness of the dishware is what is indicative of restaurant use. The same is true for the items of the subject merchandise that we have classified in heading 6912, HTSUS. Items of the Roma style are white and plain, round and stackable with a one-quarter inch rim. Furthermore, not all are translucent, and the ones that are translucent are not delicat