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NY J83824

May 7, 2003

CLA-2-98:RR:NC:MM:106 J83824


TARIFF NO.: 9817.00.5000

Mr. Scott Cernosek
Tradewind Farms, Inc.
317 N. West Street
Visalia, CA 93291

RE: The applicability of the agricultural/horticultural actual use provision to the Model KIT2000 4-pouind grape clamshell container from Italy

Dear Mr. Cernosek:

In your letter dated April 19, 2003 you requested a decision as to the applicability of the subject special tariff provision to a product for which we had previously issued a ruling. You submitted descriptive literature and a sample with your request.

In NY ruling I89645, dated January 6, 2003, we classified the subject merchandise, a plastic container imported empty and used to package fruit for retail sale, in subheading 3923.10.0000, Harmonized Tariff Schedule of the United States (HTS), which provides for articles for the conveyance or packing of goods, of plastics: boxes, cases, crates and similar articles. The rate of duty is 3 percent ad valorem. In your latest submission, while not disagreeing with our earlier ruling, you are asking us to consider the applicability of subheading 9817.00.5000, HTS, to the containers in question. This special provision carries a conditionally free rate of duty for machinery, equipment or implements to be used for agricultural or horticultural purposes.

As you noted in your submission, there is a three-part test to determine whether or not heading 9817.00.50, HTS, applies to any given product. Customs Headquarters has stated many times that before an article could be classified in this heading, a three-part test had to be applied, as follows:

(1) the article must not be among the long list of exclusions to heading 9817.00.50 or 9817.00.60 under Section XXII, Chapter Subchapter XVII, U.S. Note 2;

(2) the terms of heading 9817.00.50 or 9817.00.60 must be met in accordance with GRI 1; and

(3) the merchandise must meet the actual use conditions required in accordance with sections 10.131  10.139 of the Customs Regulations (19 CFR 10.131  10.139).

This test has been applied time and again and its validity has not been questioned. Merchandise must satisfy each part of the test, taken in order. If a good fails any part of the test, then recourse would have to be made to its primary classification.

As you observe in your request, this product is not among those articles which would be excluded from 9817.00.50, HTS, and it thus passes the first part of the test.

As for the second part of the test, we cannot agree with your assertion that the terms of the heading are met insofar as this product is concerned. The Model KIT2000 4-pound grape clamshell container is used as packing to transport harvested goods to market for sale. This endeavor is not an agricultural or horticultural purpose but answers to a marketing purpose. As commonly defined, agriculture and horticulture are concerned with the science, art and business of cultivating crops, fruits, plants and the like. Packing and bringing the product to market, regardless of the efficiency of the container in maintaining product freshness, is not commonly held to be an agricultural or horticultural endeavor. It satisfies a sales/retail function Since the Model KIT2000 container does not satisfy the second part of the test, it cannot be classified in heading 9817.00.5000, HTS.

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

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Patrick J. Wholey at 646-733-3013.


Robert B. Swierupski

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