HQ 961141

July 21, 1998

CLA-2 RR:CR:GC 961141 PH

CATEGORY: Classification

TARIFF NO.: 3307.90.00; 7013.99.50; 7323.99.90; 9405.50.40

Mr. William Velasquez
Import/Export Coordinator
Endar Corporation
43195 Business Park Drive
Temecula, California 92590-3697

RE: "Holiday potpourri gift set"; glassware with metal stand and
potpourri; candle holder; glassware for table, kitchen,
toilet, office, indoor decoration; principal use; essential
character; composite good; goods put up in sets for retail
sale; GRI 3(b); U.S. Additional Note 1(a); ENs Rule
3(b)(VIII); Rule 3(b)(X); Better Home Plastics Corp. v.
U.S.; HQs 089470; 951126; 955857; 956810; 957794; 960962;
961095; NY A80401; B87765; 818540; 888716

Dear Mr. Velasquez:

This is in reference to your request to the Area Director of
Customs, New York, N.Y., dated August 18, 1997, requesting
reconsideration of New York Ruling Letter (NY) B87765 dated
August 6, 1997, concerning the classification under the
Harmonized Tariff Schedule of the United States (HTSUS) of a
"holiday potpourri gift set". A sample was provided. Your
letter was referred to this office for reply. We regret the
delay.

In your letter, you make a number of arguments as to the
proper classification of the merchandise. These arguments,
including the contention that the merchandise should be
classified as other articles of glass in subheading 7020.00,
HTSUS, were addressed at length in Headquarters Ruling Letter
(HQ) 960962 dated July 15, 1998, in response to protest 2304-96-100344. The LAW AND ANALYSIS portion of HQ 960962 is
incorporated by reference into this ruling for purposes of the
same arguments made in your current letter. Also, in other
submissions you have indicated that the potpourri and packaging
of the set is of U.S. origin. As ruled in HQ 961095 dated July
20, 1998, if the potpourri and packaging are of U.S. origin,
pursuant to U.S. Note 1, Chapter 98, HTSUS (see also Superscope,
Inc. v. United States, 13 CIT 997, 727 F. Supp. 629 (1989);
Customs Service Decisions (CSDs) 89-26 and 90-66; and Treasury
Decision (TD) 91-7), they may qualify for duty-free treatment
under subheading 9801.00.10, HTSUS, assuming that the
requirements of the subheading and the applicable regulations
(see 19 CFR 10.1 et seq.) are met.

FACTS:

The merchandise consists of clear glassware, similar in
shape to a pith helmet (rounded with a large rim), 5 7/8" in
diameter, 2 3/8" in depth, with a 4 5/8" wide and 4 7/8" high
metal stand into which the glassware fits and a package of
potpourri, all packaged in a cardboard display box. The stand
appears to be of coated iron or steel and consists of a ring onto
which are attached three legs. The potpourri material consists
of dried roses, leaves, and similar matter, wrapped in a
cellophane package closed with a lace-like ribbon. The
dimensions of the package are approximately 3" X 4" X 6". These
articles are assembled in a cardboard display container (opened
on top and in front, with cut-out portions into which the
articles fit). The container is decorated with holly-like leaves
and berries and its ends have a red, green, and gold plaid
design. The container is labeled "HOLIDAY POTPOURRI GIFT SET".

In NY B87765 Customs determined the essential character of
the glassware with metal stand and of the entire set to be
provided by the glassware and classified the set as other
glassware for indoor decoration or similar purposes in subheading
7013.99.50, HTSUS.

The subheadings under consideration are as follows:

3307.90.00 Pre-shave, shaving or after-shave preparations,
personal deodorants, bath preparations,
depilatories and other perfumery, cosmetic or
toilet preparations, not elsewhere specified or
included; prepared room deodorizers, whether or
not perfumed or having disinfectant properties:
... Other.

The 1998 general column one rate of duty for goods classifiable
under this provision is 5.4% ad valorem.

7013.99.50 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: ... Other: ... Other:
... Other: ... Valued over $0.30 but not over $3
each.

The 1998 general column one rate of duty for goods classifiable
under this provision is 30% ad valorem.

7323.99.90 Table, kitchen or other household articles and
parts thereof, of iron or steel; ...: Other: ...
Other: ... Not coated or plated with precious
metal: ... Other: ... Other.

The 1998 general column one rate of duty for goods classifiable
under this provision is 3.4% ad valorem.

9405.50.40 Lamps and lighting fittings including searchlights
and spotlights and parts thereof, not elsewhere specified or included; ...: ...
Non-electrical lamps and lighting fittings: ...
Other: ... Other.

The 1998 general column one rate of duty for goods classifiable
under this provision is 6.3% ad valorem.

ISSUE:

Whether the packaged glassware with metal stand and
potpourri is classifiable as other preparations for perfuming or
deodorizing rooms in subheading 3307.90.00, HTSUS, other
glassware of a kind used for indoor decoration or similar
purposes in subheading 7013.99.50, HTSUS, other table, kitchen or
other household articles of iron or steel in subheading
7323.99.90, HTSUS, or other non-electrical lamps and lighting
fittings in subheading 9405.50.40, HTSUS.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff
Schedule of the United States (HTSUS) in accordance with the
General Rules of Interpretation (GRIs). GRI 1 states in part
that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6. Pursuant to
GRI 3(b), when goods are prima facie classifiable under two or
more headings, classification shall be effected as follows:

(b) Mixtures, composite goods consisting of different
materials or made up of different components, and goods put
up in sets for retail sale, which cannot be classified by
reference to 3(a) [by reference to the heading which
provides the most specific description], shall be classified
as if they consisted of the material or component which
gives them their essential character, insofar as this
criterion is applicable.

The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized System. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise. Customs believes the ENs should
always be consulted. See TD 89-80, published in the Federal
Register August 23, 1989 (54 FR 35127, 35128).

Subheadings 7013.99.50, 7323.99.90, and 9405.50.40, HTSUS,
as applicable to the merchandise under consideration, are
controlled by use (other than actual use) (see Group Italglass
U.S.A., Inc. v. United States, 17 CIT 1177, 839 F. Supp. 866
(1993); E.M. Chemicals v. United States, 923 F. Supp. 202 (CIT
1996); Stewart-Warner Corp. v. United States, 3 Fed. Cir. (T) 20,
25, 748 F.2d 663 (1984)). In such provisions, articles are
classifiable according to the use of the class or kind of goods
to which the articles belong. If an article is classifiable
according to the use of the class or kind of goods to which it
belongs, Additional U.S. Rule of Interpretation 1(a), HTSUS,
provides that:

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.

In other words, the article's principal use in the U.S. at
the time of importation determines whether it is classifiable
within a particular class or kind (principal use is distinguished
from actual use; a tariff classification controlled by the latter
is satisfied only if such use is intended at the time of
importation, the goods are so used and proof thereof is furnished
within 3 years after the date the goods are entered (U.S.
Additional Note 1(b); 19 CFR 10.131 - 10.139)).

The Courts have provided factors, which are indicative but
not conclusive, to apply when determining whether merchandise
falls within a particular class or kind. They 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. See
Lenox Collections v. United States, 19 CIT 345, 347 (1995);
Kraft, Inc, v. United States, 16 CIT 483 (1992), G. Heileman
Brewing Co. v. United States, 14 CIT 614 (1990); and United
States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d
373 (1976), cert. denied, 429 U.S. 979 (1976).

This office recently has exhaustively reviewed the principal
use of articles such as those under consideration (glassware in
various forms contended to be principally used as candle
holders). In the March 25, 1998, edition of the CUSTOMS
BULLETIN, Volume 32, Number 12, page 32, Customs issued a notice
under 19 U.S.C. 1625 proposing to modify or revoke two
Headquarters and five New York ruling letters (including some of
the rulings you cite, NYs A80401 dated March 7, 1996; 818540
dated February 23, 1996; and 888716 dated August 20, 1993) to
classify the articles described therein as other glassware of a
kind used for indoor decoration or similar purposes in subheading
7013.99, HTSUS, instead of as candle holders in subheading
9405.50.40, HTSUS. The comments submitted in response to this
notice provided considerable information regarding the "pertinent
factors" (see above) related to the principal use of the class or
kind of goods to which the goods considered in the proposed
rulings belong. Based on this information, Customs has concluded
that the class or kind for goods such as those under
consideration is defined by the form or shape of the article
(e.g., bell-shape, similar to bell-shape, flower pot shape, tulip
or flower petal shape, cube or rectangle shape, disk shape, bowl
shape, and other shapes) and its size. We have found there to be
a clear distinction between glassware used as candle holders and
that used for general indoor decoration based on the size of the
articles, in the absence of other pertinent evidence or
information. Glassware with an opening of 4 inches or less in
diameter and a height or depth of 5 inches or less is used
substantially more frequently as a candle holder than for any
other purpose, according to the information we have obtained, and
larger glassware is used substantially more frequently for
general indoor decoration. See the July 15, 1998, edition of the
CUSTOMS BULLETIN, Volume 32, Number 28, page 12, wherein the
March 25, 1998, CUSTOMS BULLETIN notice was withdrawn.

The glassware component of the article under consideration
is not of one of the above-described shapes or forms, and its
diameter is in excess of those of the class or kind of articles
we found to be principally used as candle holders in our analysis
of the information received in response to the March 25, 1998,
CUSTOMS BULLETIN notice. This also is consistent with the
pertinent factors listed by the Courts for determining principal
use (see above). That is, in regard to physical characteristics,
the size of the opening and the relatively shallow depth make for
easy, convenient access; for example, as illustrated in the
literature provided by the protestant, the dimensions enable the
articles to be used as potpourri scent dispensers (the wide
opening relative to the shallow depth enables more potpourri to
be "aired")). In regard to the other pertinent factors
(expectation of ultimate purchasers; channels of trade;
environment of sale; and usage, economic practicality of such
usage, and recognition of the trade of such usage), the evidence
obtained from the public in response to the March 25, 1998,
CUSTOMS BULLETIN notice supports principal use of the glass
component for indoor decoration and not as a candle holder.

The glassware and stand components of the merchandise, with
the glassware shaped so that it cannot stand on its own (without
being supported by the stand), make up a composite good (see,
e.g., HQs 956810 dated November 28, 1994; 957794 dated October 2,
1995; and 960962, referred to above). The glassware and stand
are, prima facie, classifiable under different headings (the
glassware under heading 7013, HTSUS (see above); the stand under
heading 7323, HTSUS). Therefore, under GRI 3(b), classification
of the good is determined on the basis of the component which
gives it its essential character. EN Rule 3(b)(VIII) lists as
factors to help determine the essential character of such goods
the nature of the materials or components, their bulk, quantity,
weight or value, and the role of a constituent material in
relation to the use of the goods.

Recently, there have been several Court decisions on
"essential character" for purposes of GRI 3(b). Better Home
Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996),
affirmed 119 F.3d 969 (Fed. Cir. 1997), involved the
classification of shower curtain sets, consisting of an outer
textile curtain, inner plastic magnetic liner, and plastic hooks.
Customs had classified the sets on the basis of the textile
curtain under the "default rule of GRI 3(c)", after determining
that neither the relative specificity test nor the essential
character test was applicable (119 F.3d at 971). The CIT found
that the plastic liner performed the indispensable function of
keeping water inside the shower and therefore held that the
plastic liner imparted the essential character upon the set. In
its decision affirming the CIT decision, the CAFC stated:

The [CIT] carefully considered all of the facts, and, after
a reasoned balancing of all the facts, concluded that Better
Home Plastics offered sufficient evidence and argument to
overcome the presumption of correctness. The court
concluded that the indispensable function of keeping water
inside the shower along with the protective, privacy and
decorative functions of the plastic liner, and the
relatively low cost of the sets all combined to support the
decision that the plastic liner provided the essential
character of the sets. ... The court's decision did not
rely solely, or even hinge, on the indispensability of the
water-retaining function. The decision was substantially
based on the importance of the other functions as well as
the cost of the entire set. [119 F.3d at 971]

Other decisions in which the Court looked primarily to the
role of the constituent material in relation to the use of the
goods to determine essential character include Mita Copystar
America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997),
motion for rehearing and reconsideration denied, 994 F. Supp. 393
(CIT 1998), and Vista International Packaging Co., v. United
States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also,
Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), in
which the Court found that, although GRI 3(b) could not be
applied, if a GRI 3(b) analysis were performed, the essential
character would be based upon the composite good's function.

Based on the foregoing, we conclude that in an essential
character analysis for purposes of GRI 3(b), the role of the
constituent materials or components in relation to the use of the
goods is generally of primary importance, but the other factors
listed in EN Rule 3(b)(VIII) should also be considered, as
applicable. In this case, the "indispensable function" (Better
Home Plastics, supra) of the glassware and stand, used to
determine the role of the constituent material or components in
relation to the use of the goods, indicates that the essential
character of the good is provided by the glassware component.
That is, the "indispensable function" is holding or containing
whatever is put in the good, whether candles, flowers, potpourri,
or anything else. The component which performs that function is
clearly the glass component (see, e.g., HQ 951126 dated May 12,
1992, explaining and distinguishing various rulings on the
applicability of GRI 3(b) to articles of glass and metal).
Insofar as the other factors (quantity, bulk, weight, and value)
are concerned, there is no evidence contradicting the conclusion
that the glassware provides the essential character of the good.

Accordingly, the composite good consisting of the glassware
and stand is classifiable as other glassware of a kind used for
indoor decoration or similar purposes in subheading 7013.99.50,
HTSUS. However, the glassware and stand, as imported, are
packaged with the potpourri in a "holiday potpourri gift set."
The potpourri, by itself, would be classifiable in subheading
3307.90.00, HTSUS (HQs 089470 dated August 27, 1991, and 955857
dated August 11, 1994). The glassware and metal stand, packed
with the package of potpourri for sale, make up "goods put up in
sets for retail sales" for purposes of GRI 3(b) (see EN Rule
3(b)(X)). The goods making up the set are, prima facie,
classifiable under different headings. Therefore, under GRI
3(b), classification of the set is determined on the basis of the
component which gives it its essential character (see above).

As stated above in regard to the Court decisions on
"essential character", in an essential character analysis for
purposes of GRI 3(b), the role of the constituent materials or
components in relation to the use of the goods is generally of
primary importance and the other factors listed in EN Rule
3(b)(VIII) should also be considered, as applicable. In this
case, the "indispensable function" of the set and the roles of
the components thereof are not conclusive. That is, the function
of potpourri is to release scent and the role of the glassware
and stand is to hold the potpourri. However, as illustrated by
the materials you enclosed with your letter, the glassware and
stand may also be used for other purposes, such as to hold a
candle. By its nature, potpourri loses its ability to provide
scent and is discarded and replaced. Thus, the glassware and
stand component of the set could continue to be used, whether to
hold potpourri or a candle or for some other use, after the
potpourri is no longer usable (in this regard, we note that your
company markets individual potpourri packages like that in the
set).

The other factors listed in EN Rule 3(b)(VIII), however, may
be used to establish essential character. Quantity is not
relevant (i.e., there is one of each component). Although the
bulk of the potpourri is approximately the same as that of the
glassware and stand (in the sense of the space taken by each
component), the weight and value (based on your statements
regarding value in other submissions regarding similar articles)
of the glassware and stand are considerably greater than those of
the package of potpourri (we note that in both Better Home
Plastics decisions, the Court took note of value as a factor in
the determination of essential character (916 F. Supp. 1268; 119
F.3d at 971)). Accordingly, we conclude that the essential
character of the set is provided by the glassware and stand. The
set is classifiable as other glassware of a kind used for indoor
decoration or similar purposes in subheading 7013.99.50, HTSUS.

HOLDING:

The packaged glassware with metal stand and potpourri is
classifiable as other glassware of a kind used for indoor
decoration or similar purposes in subheading 7013.99.50, HTSUS.

EFFECT ON OTHER RULINGS:

NY B87765 dated August 6, 1997, is AFFIRMED.

Sincerely,


John Durant, Director
Commercial Rulings Division