Tariff classification of Pez dispensers; Revocation of NY 852481

HQ H026238 June 4, 2009 CLA-2 OT:RR:CTF:TCM H026238 GC CATEGORY: Classification TARIFF NO.: 3926.90.9980 Joe Couret Panalpina, Inc. Harborside Financial Center 34 Exchange Place, Plaza Two – 8th Floor Jersey City, New Jersey 07302 RE: Tariff classification of Pez dispensers; Revocation of NY 852481 Dear Mr. Couret: In New York Ruling Letter (NY) 852481, dated June 5, 1990, Customs and Border Protection (CBP) issued to Pez Manufacturing Corp. (Pez) a binding ruling on the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of certain pocket-sized candy dispensers. We have since reviewed NY 852481 and find it to be in error. Notice of the proposed action was published in the Customs Bulletin, Vol. 43, No. 18, on May 1, 2009. No comments were received in response to the notice. FACTS: The merchandise subject to NY 852481 was a plastic Pez pocket-size dispenser imported without any candy. After importation, the subject candy dispenser is packaged with two individually wrapped packages of candy, which the consumer will place within the dispenser. The sample Pez dispenser provided for in NY 852481 had a “Snoopy” head at the top. In NY 852481, CBP held that the subject Pez dispenser was classified under subheading 3923.90.00, HTSUS (1990), which provided for: “[a]rticles of plastic for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: [o]ther.” The subheading remains unchanged in the 2008 version of the HTSUS. ISSUE: Whether the Pez dispenser is classified under heading 3923, HTSUS, as a plastic article for the conveyance of goods, or under heading 3926, HTSUS, as an other article of plastic? 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 are as follows: 3923 Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: 3923.90.00 Other… 3923.90.0080 Other * * * 3926 Other articles of plastics and articles of other materials of headings 3901 to 3914: 3926.90 Other: 3926.90.99 Other… 3926.90.9980 Other * * * The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. 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. The relevant ENs are as follows: The EN to heading 3923, HTSUS (EN 3923), provides, in pertinent part: This heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products. The articles covered include: (a) Containers such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles and flasks. (Emphasis added). As indicated by the heading text and EN 39.23, above, heading 3923, HTSUS, covers articles of plastic for the conveyance of goods. It is CBP’s consistently stated position that the exemplars listed in EN 39.23 are used generally to convey or transport goods over long distances and often in large quantities. See, e.g., Headquarters Ruling Letter (HQ) 087635, dated October 24, 1990; HQ 951404, dated July 24, 1992; HQ 953841, dated September 27, 1993; and HQ 963493, dated March 23, 2000. Furthermore, heading 3923, HTSUS, provides for cases and containers used for shipping purposes. See HQ 089825, dated April 9, 1993 and HQ 953275, dated April 26, 1993. Accordingly, heading 3923, HTSUS, provides for cases and containers of bulk goods and commercial goods, not personal items. See HQ 954072, dated September 2, 1993; HQ 963493, supra; and HQ 953841, supra. With respect to personal items, CBP has revoked a series of rulings in which containers used for personal articles were classified under heading 3923, HTSUS. In HQ 960199, dated May 15, 1997, we revoked an earlier ruling, NY 887467, dated July 9, 1993, which classified a plastic molded pencil box under heading 3923, HTSUS, and reclassified the article under heading 3926, HTSUS. Citing to the rulings which state that heading 3923, HTSUS, provides for cases and containers of bulk goods and commercial goods, not personal articles, we found that the pencil boxes transported pens, pencils, erasers, etc. for personal use and were not described by heading 3923, HTSUS. See also HQ 960196, dated May 15, 1997; HQ 960198, dated May 15, 1997; HQ 960152, dated May 15, 1997; and HQ 960153, dated May 15, 1997. The subject Pez dispenser is not designed to carry bulk or commercial goods. In fact, the Pez dispenser does not carry candy until the purchaser places the candy within the dispenser. Stated differently, the subject merchandise is not used in the conveyance of goods, but is designed to facilitate the purchaser’s personal transportation and storage of candy in the same manner that the pencil box of HQ 960199 facilitated the personal storage and transportation of pencils. Because the subject Pez dispenser is designed for the purchaser’s personal use with regards to carrying and dispensing candy, it is not within the scope of heading 3923, HTSUS. Because the subject Pez dispenser does not fall within the scope of heading 3923, HTSUS, it is classifiable under heading 3926, HTSUS, which covers “[o]ther articles of plastics and articles of other materials of headings 3901 to 3914”. HOLDING: By application of GRI 1, the subject Pez Dispenser is currently classifiable under heading 3926.90.9980 HTSUSA, which provides for: “[o]ther articles of plastics and articles of other materials of headings 3901 to 3914: [o]ther: [o]ther… [o]ther.” The column one, general rate of duty is 5.3 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/tata/hts/. EFFECT ON OTHER RULINGS: NY 852481, dated June 5, 1990, is hereby REVOKED. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. Sincerely, Myles Harmon, Director Commercial and Trade Facilitation Division