Classification of a Christmas Tree shaped hat; Santa shaped hat; and Elf shaped hat

HQ H076796 December 17, 2009 CLA-2 RR:CTF:TCM H076796 JPJ CATEGORY: Classification TARIFF NO.: 9505.10 Ms. Wendy Lawson Customs Cost Specialist Sears Holdings Management Corporation 3333 Beverly Road A3-368B Hoffman Estates, IL 60179 RE: Classification of a Christmas Tree shaped hat; Santa shaped hat; and Elf shaped hat Dear Ms. Lawson: This is in response to your request, dated July 27, 2009, on behalf of Sears Holdings Management Corporation, for a binding ruling concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of three items described as a “Christmas Tree shaped hat”, a “Santa shaped hat”, and an “Elf shaped hat”. Your request has been forwarded by the National Commodity Specialist Division (NCSD) in New York to this office for a response. A sample of each item was forwarded with your request. The samples will be returned. FACTS: The “Christmas Tree shaped hat”, Item 200433679453, is a light-up musical animated hat constructed of a green knit acrylic fabric outer shell with a stuffed yellow textile fabric star topper. It is lined with woven fabric, has an adjustable plastic sizing band, is decorated with four red light bulbs, and resembles a Christmas tree. Batteries are included. When the hat is turned on, the red light bulbs illuminate, and the tree rocks side to side as it plays the Christmas holiday song “Rockin’ Around the Christmas Tree”. The “Santa shaped hat”, Item 200433679834A, is a light-up musical animated hat constructed of a red knit acrylic fabric outer shell with a white knit fabric 8-pointed crown-like cuff decorated with red, yellow, and green fabric spheres, and a red metal jingle bell at the tip. It is lined with a woven fabric, and has an adjustable plastic sizing band. It resembles an elf hat, but with a red and white color scheme. Batteries are included. When the hat is turned on, the hat rocks side to side as it plays the Christmas holiday song “Have a Holly Jolly Christmas”. The “Elf shaped hat”, Item 200433679834B, is a light-up musical animated hat constructed of a red knit polyester fabric outer shell with a green knit fabric 8-pointed crown-like cuff decorated with red, yellow, and green fabric spheres, and a red metal jingle bell at the tip. It is lined with a woven fabric, and has an adjustable plastic sizing band. The hat resembles an elf hat. Batteries are included. When the hat is turned on, the hat rocks side to side as it plays the Christmas holiday song “We are Santa’s Elves”. All three items will be sold in the Christmas department and will be removed from the selling floor at Christmas season’s end. ISSUE: Whether the hats are classified in heading 9505, HTSUS, as festive, carnival or other entertainment articles or in heading 6505, HTSUS, as hats and other headgear. LAW AND ANALYSIS: Classification under the HTSUS 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. 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 may then be applied. The HTSUS provisions under consideration are as follows: 6505 Hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed; hair-nets of any material, whether or not lined or trimmed: * * * 9505 Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: * * * The Harmonized Commodity Description and Coding System Explanatory Notes ("EN") 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. 35127-28 (Aug. 23, 1989). The General ENs to chapter 65, HTSUS, state, in relevant part: With the exception of the articles listed below this Chapter covers hat-shapes, hat-forms, hat bodies and hoods, and hats and other headgear of all kinds, irrespective of the materials of which they are made and of their intended use (daily wear, theatre, disguise, protection, etc.). * * * The ENs to heading 9505, HTSUS, state, in relevant part, that the heading covers: (A) Festive, carnival or other entertainment articles, which in view of their intended use are generally made of non-durable material. They include: (1) Festive decorations used to decorate rooms, tables, etc. (such as garlands, lanterns, etc.); decorative articles for Christmas trees (tinsel, coloured balls, animals and other figures, etc); cake decorations which are traditionally associated with a particular festival (e.g., animals, flags). (2) Articles traditionally used at Christmas festivities, e.g., artificial Christmas trees, nativity scenes, nativity figures and animals, angels, Christmas crackers, Christmas stockings, imitation yule logs, Father Christmases. (3) Articles of fancy dress, e.g., masks, false ears and noses, wigs, false beards and moustaches (not being articles of postiche - heading 67.04), and paper hats. However, the heading excludes fancy dress of textile materials, of Chapter 61 or 62. (4) Throw-balls of paper or cotton-wool, paper streamers (carnival tape), cardboard trumpets, “ blow-outs ”, confetti, carnival umbrellas, etc. * * * In Michael Simon Design, Inc. v. United States, 452 F. Supp 2d. 1316 (Ct. Int’l Trade 2006), aff’d 501 F. 3d 1303 (Fed. Cir. 2007) reh’g denied (Fed. Cir. April 2, 2008) (“Michael Simon”), the Court of International Trade, citing Park B. Smith, Ltd. v. United States, 25 Ct. Int’l Trade 506 (2001), aff’d in part, vacated in part, and remanded, 347 F. 3d 922 (Fed. Cir. 2003), reh’g denied (Fed. Cir. March 16, 2004) (“Park B. Smith”), citing Midwest of Cannon Falls, Inc. v. United States, 20 Ct. Int’l Trade 123 (1996), aff’d in part, rev’d in part, 122 F. 3d 1423 (Fed. Cir. 1997) (“Midwest”) regarding the scope of heading 9505, HTSUS, and the class or kind of merchandise termed “festive articles”, applied a two-prong test for determining whether a particular article is classifiable as a good of heading 9505, HTSUS: “[C]lassification as a ‘festive article’ under Chapter 95 requires that the article satisfy two criteria: (1) it must be closely associated with a festive occasion and (2) the article [be] used or displayed principally during that festive occasion.” Additionally, the Court stated that the items must be “closely associated with a festive occasion” to the degree that “the physical appearance of an article is so intrinsically linked to a festive occasion that its use during other time periods would be aberrant.” CBP rulings have recognized the Christmas tree, the decorated evergreen, and the evergreen topped with a star as recognized symbols and/or motifs of Christmas, and the items incorporating these symbols and/or motifs as festive articles under heading 9505, HTSUS. See NY B82906, dated April 18, 1997; NY K80496, dated November 18, 2003; NY N009469, dated April 30, 2007; NY N020841, dated December 14, 2007; and NY N035919, dated August 22, 2008; NY N040606, dated October 9, 2008; NY N036637, dated September 5, 2008; and NY N053423, dated March 10, 2009. Applying the Park B. Smith two-part test to the “Christmas Tree shaped hat”, we find that it is closely associated with Christmas, and that it is principally used or displayed at Christmas. The physical appearance of the “Christmas Tree shaped hat” is so intrinsically linked to Christmas that its use or display at any other time would be aberrant. Although CBP rulings have classified “elf hats” in heading 6505, HTSUS, the “elf hats” in those rulings are described as “novelty” hats with no association to any recognized holiday. See NY D86167, dated January 11, 1999 (“Ernie the Keebler Elf Hat”); NY H81091, dated May 21, 2001 (novelty “elf hat”); and NY M85441, dated August 31, 2006. Applying the Park B. Smith two-part test to the “Santa shaped hat” and the “Elf shaped hat”, we find that both are closely associated with Christmas, and that both are principally used or displayed at Christmas. We believe that both the “Santa shaped hat” and the “Elf shaped hat” are closely associated with Christmas because the physical appearance of each is so intrinsically linked to Christmas that their use during other time periods would be aberrant. In addition to the guidelines set forth above, general criteria for determining “class or kind” with respect to classification were set forth in United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979 (1976).  Those criteria 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.   The importer’s submission establishes that the environment of sale will be a portion of the store devoted to displaying Christmas or holiday items. The importer also indicates that the merchandise will be removed from the selling floor after the Christmas season’s end. Therefore, the recognition of the trade, the channels of trade, and the environment of sale all recognize these articles as Christmas holiday articles. The manner of advertisement and display as well as the physical and symbolic characteristics of the subject merchandise (“Rockin’ around the Christmas Tree”; “We are Santa’s Elves”; “Have a Holly Jolly Christmas”) are sufficient to establish the economic practicality and the expectation of the ultimate purchaser that he is purchasing a Christmas article, and that the use of the article is likely to be limited to Christmas. Accordingly, we find that the merchandise is of a class or kind of merchandise described as festive articles of heading 9505, HTSUS. The Explanatory Notes to heading 6505, HTSUS, further identify the class of goods covered by Chapter 65, HTSUS, as hats and other headgear of all kinds, irrespective of the materials of which they are made and of their intended use (daily wear, theatre, disguise, protection, etc.). Therefore, we also recognize that the merchandise are of a class or kind of merchandise described as hats and headgear in heading 6505, HTSUS. Since the merchandise is prima facie classifiable in two headings, 9505 and 6505, HTSUS, we believe that GRI 3 must be consulted. According to GRI 3(a), the heading which provides the most specific description of the merchandise shall be preferred to headings providing a more general description. Under this so-called rule of relative specificity, we look to the provision with requirements that are more difficult to satisfy and that describe the merchandise with the greatest degree of accuracy and certainty. See Orlando Food Corp. v. United States, 140 F. 3d 1437, 1441 (1998) (citing United States v. Siemens Am., Inc., 68 C.C.P.A. 62, 653 F. 2d 471, 477 (1981) and United States v. J. Gerber & Co., 58 C.C.P.A. 110, 436 F. 2d 1390, 1392 (CCPA 1971)). We conclude that heading 9505, HTSUS, which provides for festive articles, is more specific than heading 6505, HTSUS, which covers hats and other headgear. It is clear that the requirements of the festive articles provision are more difficult to satisfy. In contrast, the hats provision encompasses items of all construction and for all purposes and uses. Therefore, because the requirements of the festive articles provision are more difficult to satisfy, it is the more specific heading, and under the rule of relative specificity, it governs the classification of the merchandise. See Orlando Food Corp. v. United States, 140 F. 3d 1437, 1441 (1998) (citing United States v. Siemens Am., Inc., 68 C.C.P.A. 62, 653 F. 2d 471, 477 (1981) and United States v. J. Gerber & Co., 58 C.C.P.A. 110, 436 F. 2d 1390, 1392 (CCPA 1971)). Our decision is consistent with Headquarters Ruling Letter (HQ) 084288, dated July 6, 1989, in which a Santa Claus hat made of durable material was classified in heading 9505, HTSUS, as a festive article, and not in Chapter 65, HTSUS. In that ruling we stated that: The Santa Claus hat is an article traditionally used at Christmas festivities during the Christmas season. We believe it most specifically falls within the heading for festive, carnival or other entertainment articles in Chapter 95, in the provision for articles for Christmas festivities and parts and accessories thereof. See also HQ 088410, dated April 18, 1991; New York Ruling Letters (NY) B86115 dated July 2, 1997; B88894 dated October 16, 1997; NY C89727, dated August 5, 1998; NY C89124 dated July 8, 1998; and NY 805111, dated January 6, 1995. Therefore, in accordance with GRI 3(a), we find that the merchandise is classified in heading 9505, HTSUS, as festive articles. HOLDING: In accordance with GRI 3(a), the “Christmas Tree shaped hat” (Item 200433679453), the “Santa shaped hat” (Item 200433679834A), and the “Elf shaped hat” (Item 200433679834B), are classified in heading 9505, HTSUS. They are specifically provided for in subheading 9505.10, HTSUS, as: "Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof:” The 2009 general, column one rate of duty will be Free. Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. Sincerely, Gail A. Hamill, Chief Tariff Classification and Marking Branch