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NY 898260





June 20, 1994

CLA-2-62:S:N:N5:360 898260

CATEGORY: CLASSIFICATION

Mr. Michael Riley
May Merchandising Company
May Department Stores International, Inc. 615 Olive Street
St. Louis, Missouri 63101

RE: The tariff classification of plastic hangers from Hong Kong imported with garments from Hong Kong, Korea and Sri Lanka.

Dear Mr. Riley:

In your letter dated May 16, 1994, received by this office on May 23, 1994, you requested a tariff classification ruling.

Samples of two styles of plastic hangers were submitted. You state that it was your firm's policy to ship garments on a white, lightweight hanger. At the distribution center in this country, the hangers were discarded and replaced with a more substantial clear plastic hanger with metal wire top hooks. Now, you intend to ship garments on the more substantial hanger. The hangers will be imported with garments solely for the purpose of shipping and handling the garments they support. The hangers will be removed from these garments at retail, that is, when a garment is sold, the hanger will be removed and reused to display another garment.

It is your contention that the hangers will have a repetitive use and are a separate article of commerce. As such, they should be separately classified from the garments with which they are imported. To support your claim, you have provided the value of the hangers. The white lightweight hangers cost less than $0.01 per hanger and their cost is included in the first cost paid to the vendor. The clear hangers cost between $0.12 to $0.14 each depending on the country of origin of the garment. You argue that the clear plastic hangers are more durable and should be classified as packing material having a repetitive use.

General Rule of Interpretation (GRI) 5(b) of the Harmonized Tariff Schedule of the United States (HTS) provides: "...packing materials...entered with the goods therein shall be classified with the goods...However, this provision is not binding when such packing materials...are clearly suitable for repetitive use." In light of GRI 5(b), you contend that the hangers should not be subject to the duty of the garment.

You have also cited a NY ruling (823018 dated April 16, 1987) in which plastic hangers were separately classified under heading 3926.90.90 , HTS. Notwithstanding the information and analysis you provided, the instant hangers will be classified with the garments with which they are imported. The ruling letter did not provide an analysis of the status of hangers classified with garments, and, in fact, classification of these items separately would be contrary to precedent established by both Headquarters rulings and the Court.

Holly Stores, Inc. v. The United States, 534 F. Supp. 818 (1981), aff'd, 697 F.2d 1387 (Fed.Cir. 1982), involved the classification of plastic and plastic coated wire hangers imported with garments. In that decision the Court interpreted the meaning of "reuse" as it appeared in General Headnote 6(b) of the Tariff Schedules of the United States (TSUS). Customs has relied upon this interpretation when reviewing the HTS term "repetitive use" as it appears in GRI 5(b). Each provision addresses the issue of when containers imported with goods are classifiable with those goods or classifiable separately.

You state that the hangers at issue are used for more than the shipping and handling of the garments with which they are imported. The hangers are reused many times for displaying other garments in your stores. The hangers in the Holly Stores case were also reused in the same manner you have described, however, the Court found that such "reuse" was not sufficient to be considered "reuse" in the commercial sense as defined in General Headnote

The Court went on to define the commercial sense of the term "reuse" in relation to the hangers as meaning either the hangers entered the commerce of the U.S., or that it would be reused for commercial shipping or transportation purposes. The reuse indicated in the Holly Stores decision was considered to be "limited to the operation of the plaintiff's own enterprise." The Court found the reuse of the hangers to be only "incidental and fugitive relative to the plaintiff's own scale of operations." While Customs recognizes that the hangers at issue are more substantial in construction than those at issue in Holly Stores, their use is very much the same.

The Court concluded in Holly Stores that the hangers did not enter the mainstream of commerce. The function of the hangers was for shipment and presentation of garments to the consumer. Reuse of the hangers to hang other garments was not viewed as a reuse in the commercial sense intended in General Headnote 6(b).

It is Customs position that the Court's interpretation of the term "reuse" applies to the interpretation of "repetitive use" in GRI 5(b) and the correct application of that GRI. "Clearly suitable for repetitive use" as used in GRI 5(b) is taken to mean repetitive use in the practical, commercial
sense. This interpretation follows the case law as reflected in Holly Stores and other various container cases. The reuse of the hangers at issue is not viewed as a repetitive use in the commercial sense.

Accordingly, the hangers are correctly classified with the garments with which they are imported, and therefore dutiable at the same rate as the garments.

Please be advised that textile garments are subject to quota and visa arrangements from the countries you specifiy. Without a specific garment, we cannot provide any information relative to the specific textile category applicable nor can we provide any specific classification information.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

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