HQ 082780: Internal Advice on the classification of household china.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 082780


                                  December 18, 1989



          CLA-2 CO:R:C:G  082780 SS

          CATEGORY: Classification

          TARIFF NO.: 533.64, 533.52.

          Area Director
          New York Seaport
          U.S. Customs Service
          6 World Trade Center
          New York, New York  10048-0945

          RE: Internal Advice on the classification of household china.

          Dear Sir:

               This is our response to your request for internal advice
          concerning the tariff classification of certain patterns of china
          dinnerware imported by Villeroy & Boch Tableware Ltd.

          FACTS:

               The merchandise in issue consists of certain patterns of
          china dinnerware.  The names of the patterns are as follows:
          Albertine, Alt Amsterdam, Amapola, Aragon, Arco White, Arlano,
          Basket Blue, Green, Red, Coburg, Collage, Castello, Castell Gold,
          Delta, Facette Rouge, Facette Gold, Fruit Garden, Gold Brocade,
          Indian Summer, Lombardi White, Louiseburg White, Blue, Gold,
          Orlando, Palatino, Petite Fleur, Royal Gold, Siera, Summerday,
          Trio, Verona, and Vieux Luxembourg.

               The above patterns represent the manufacturer's fine china
          produced chiefly for household use.  However, this china is also
          marketed and sold to hotels and restaurants for use in their
          finer dining sections.  The information supplied in the catalogue
          advertising these chinaware patterns indicates certain patterns
          may be ordered in a design which conforms more to hotel and
          restaurant use.  For example, the pattern, Basket, may be ordered
          without the center decoration on the china.


















                                         -2-


               The percentage of total sales to hotels and restaurants
          varies according to the pattern of chinaware and year of the
          sales.  For example, in 1985, the pattern Petite Fleur reflected
          a 49% sale, while in 1986, it showed a 17.44% sale.  Further,
          according to the data supplied by the importer, certain patterns
          of china had sales to hotels and restaurants varying from 70% to
          100% in 1983. Counsel for the importer claims that the total
          sales to hotel and restaurants for 1986 was 11.16% for household
          dinnerware, and 11.35 for household bone china.  However, it is
          noted that these percentages are based on sales of all patterns,
          rather than on specific patterns.  The actual percent of sales
          for a specific pattern ranges from zero to 45.05%, depending on
          the pattern.

          ISSUE:

               Whether when classification is determined on the basis of
          chief use, and certain patterns of household chinaware are also
          marketed and sold to hotels and restaurants, such chinaware is
          properly classifiable under the provision for hotelware in item
          533.52, or under the provision for household ware in item 533.64,
          TSUS.

          LAW AND ANALYSIS:

               In the instant case, the following two situations are
          presented:

               (1) Some restaurants and hotels purchase household china
          for use in their finer dining areas;

               (2) Some restaurants and hotels purchase, by special order,
          household type china with patterns which have been modified so as
          to make them more suitable for restaurant and hotel use.

               Schedule 5, part 2, subpart C, of the Tariff Schedules of
          the United States (TSUS), provides for articles chiefly used for
          preparing, serving, or storing food or beverages.  Item 533.52,
          TSUS, provides specifically for hotel or restaurant ware and
          other ware not household ware, while item 533.64, TSUS, provides
          for household ware.  In both statutory provisions, the
          fundamental question for determination is whether the imported
          articles belong to a class or kind of merchandise chiefly used in
          the household.

















                                         -3-


               General Interpretative Rule 10(e)(i) defines how use
          requirements (other than actual use) are to be construed:

               (e) in absence of special language or context which
               otherwise requires-

                    (i) 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 articles of that class
                    or kind to which the imported articles belong, and the
                    controlling use is chief use, i.e., the use which
                    exceeds all other uses (if any) combined;

               In applying the concept of chief use, courts consider
          several factors as pertinent in determining whether the imported
          merchandise falls within a particular class or kind.  These
          factors include the general physical characteristics of the
          merchandise, the expectations of the ultimate purchaser, the
          channels, class or kind of trade in which the merchandise moves,
          the environment of the sale, and the manner in which the
          merchandise is advertised or displayed.  (Citations omitted)
          United States v. Carborundum Co., 536 F.2d 373 (1976).  Further,
          in determining chief use, it is also proper to consider the
          testimony offered as well as the characteristics of the
          merchandise itself.  United States v. Bruce Duncan Co., 50 CCPA
          43, C.A.D. 817 (1963).

               In reviewing the facts and evidence submitted, it is
          ascertained that household china is distinct from hotel china in
          both physical and design characteristics.  Hotel china is heavier
          in weight, is stackable, and chip resistant.  Also, the plates
          generally do not have a center design.  This type of china is
          generally less expensive than household china and is offered for
          sale by independent sales representatives to wholesalers or hotel
          chains.  This industry also has its own trade publications and
          trade shows.

               On the other hand, household china is lighter in weight, is
          generally more expensive, and does not possess some of the
          characteristics of hotel ware.  Further, such china is sold
          nationwide by company employees to department stores, gift stores
          and directly to the consumer.


















                                         -4-


               Based on the available information, the character of the
          china in situation (1) above clearly shows that it is household
          china.  The facts indicate that some of this china is sold for
          use in hotels and restaurants.  It is noted that the percent of
          sales of this china to restaurants and hotels varies, but it is
          not "the use of a particular shipment but rather that of class or
          type of goods involved which determines its chief use."  United
          States v. The Baltimore & Ohio R.R. Co. A/C United China & Glass
          Company, 47 CCPA 1, C.A.D. 710.  Further, it is well settled that
          a fugitive use or a mere susceptibility or capability of use is
          not controlling as to chief use.  United States v. Carborundum
          Co., 536 F.2d 373, 377 (1976). Therefore, the mere fact that the
          subject china may possess some characteristics which permits its
          use in hotels and restaurants does not establish that it is
          chiefly used in hotels and restaurants.   Also, it is noted that
          chief use changes depending on trends in society, but
          classification is determined on the basis of chief use at the
          time of importation.  In this instance the percentage of sales
          and amount of use of household china by restaurants and hotels
          neither establish nor constitute chief use within the meaning of
          General Interpretative Rule 10(e)(i), TSUS, i.e., such use "does
          not exceed all other uses."  Therefore, in this situation, the
          china in issue belongs to the class of china used chiefly as
          household china.

               We are also cognizant that item numbers 533.11 through
          533.77, TSUS, were changed by Section 509 of the Trade Act of
          1979, P.L. 96-39.  We have also taken into consideration that the
          apparent intent of these changes was to preclude the low duty
          entry of ceramic ware which is not household ware.  However, the
          distinction between household ware and hotel ware is premised on
          the use of the ware.  Since classification of these items is
          governed by chief use, unless ceramic ware is chiefly used as
          hotel ware within the meaning of General Interpretative Rule
          10(e)(i), such china cannot properly be classified as hotel ware
          in item 533.52, TSUS.  On the other hand, since chief use can
          change depending on trends in society, when and if such china is
          used chiefly for restaurants, it will be necessary to reevaluate
          classification.






















                                         -5-


               In the case where restaurants and hotels special order
          household china in modified patterns more suitable for commercial
          uses,  as described in situation (2) above such modification
          alone will not provide the imports with a utility different from
          the class.  However, when such modifications include the hotel or
          restaurant logo or name, it is obvious that such china is  in a
          class chiefly for hotel purposes.

               Thus, household china which has been special ordered and
          modified for hotel and restaurant use by incorporating the hotel
          /restaurant logo or name in the design, is no longer in the class
          of china for household use, but belongs to the class of china
          that is chiefly used for hotels and restaurants.

          HOLDING:

               The patterns of household china described above, which are
          of a class used chiefly as household china, but also sold to some
          hotels and restaurants, are properly classifiable in item 533.64,
          TSUS.

          The patterns of household china which have been modified and
          special ordered for hotel and restaurant use by incorporating the
          hotel/restaurant logo or name in the design, are properly
          classified in item 533.52, TSUS.  You should advise the internal
          advice applicant of this decision.

                                       Sincerely,




                                       John Durant, Director
                                       Commercial Rulings Division



























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