CLA-2 CO:R:C:S 556139 SER
Robert M. Silber, Esq.
National Captioning Institute, Inc.
5203 Leesburg Pike
15th Floor
Falls Church, VA 22041
RE: Eligibility of listening devices for the hearing impaired
for duty-free treatment; Nairobi Protocol; parts
Dear Mr. Silber:
This is in reference to your letter of July 12, 1991,
concerning the eligibility of certain listening devices for the
hearing impaired for duty-free treatment under subheading
9817.00.96, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA).
FACTS:
The National Captioning Institute (NCI) is a nonprofit
corporation whose mission has been to increase access to
television programming for deaf and hard-of-hearing individuals.
Since 1980, NCI has accomplished this task by creating captions--
the subtitles which accompany most prime-time television
programming. Deaf and hard-of-hearing people can view these
captions by connecting a decoding device, developed by NCI, to
individual television sets.
NCI has concluded that hard-of-hearing individuals prefer to
listen to the audio portion of a television program and, as
needed, supplement their limited auditory capability by reliance
upon the captions. In an effort to meet this preference and
increase access for hard-of-hearing individuals to television and
other types of audio/voice transmissions in various places of
public accommodation (e.g., movie theaters, churches,
auditoriums), NCI is planning to import specially-designed
devices which form a system, called "Audiolink", to meet these
needs. These devices permit television sound and other
audio/voice light waves to be recognized and transmitted via an
infrared signal to a receiver/headset. The transmitter is
powered by standard electric current, while the receiver/headsets
are powered by a rechargeable power supply unit.
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There are three components which will be imported by NCI:
the transmitter, the receiver/headset, and a power supply. The
transmitter is an infrared or light wave-based, monaural
transmitter, which sends the sound transmissions to the receiver/
headset. Generally, it is connected to a NCI decoder on an
individual's television set. The transmitter unit also
incorporates a battery recharger for the batteries utilized by
the receiver/headsets.
The receiver/headsets are designed to enable hard-of-hearing
individuals to compensate for their level of hearing loss. They
receive the transmissions of the transmitter and can be directly
worn by the hard-of-hearing individual, or can function as a
receiver to which a hearing aid-related accessory can be
attached. The receiver/headsets include several unique features.
One feature is an adjustable tonal control that allows these
individuals or their audiologist to set the parameters to the
frequencies to compensate for the individual's particular hearing
loss. Other features are an adjustable balance control so that
more sound can be directed to the ear with the greater hearing
loss; an unusually high volume level; and, as stated above, the
flexibility to provide the audio signal by means of connecting a
hearing aid to the receiver/headset through a jack.
The power supply module is comprised of two primary
components: two nickel/cadmium batteries in a plastic housing to
which are attached electrical contacts, and a plastic module
which has plug prongs which are plugged into a standard
electrical outlet for recharging the batteries. The plastic
encased batteries, upon being recharged, are then to be inserted
into the receiver/headsets to provide them with their power
supply.
Based on various needs and estimated markets, this equipment
is imported in different configurations. In some instances, the
transmitter and receiver/headset are imported together. In
other instances, the receiver/headset and power supply module
are imported together, or the receiver/headsets and power supply
modules are imported separately. The power supply module, when
imported alone, is imported directly from Singapore, where it is
manufactured. When the power supply module is imported into the
U.S. with the receiver/headset, the power supply module is
shipped from Singapore to Germany where the two items are
packaged for retail sale prior to shipment to the U.S.
The primary reason for separate importing of the
receiver/headsets is the increasing demand for the use of
individual receiver/headset units. Examples of such use include
providing additional units for hard-of-hearing guests; taking an
individual unit to a residence which is equipped with NCI
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transmission equipment; and, taking an individual unit to places
of public accommodation, such as concert halls, movie theaters,
houses of worship, meeting halls, and auditoriums.
ISSUE:
Whether the Audiolink system or, if entered separately,
some of the individual components of the Audiolink system are
eligible for duty-free treatment under subheading 9817.00.96,
HTSUSA.
LAW AND ANALYSIS:
The Nairobi Protocol to the Agreement on the Importation of
Educational, Scientific, and Cultural Materials Act of 1982,
established the duty-free treatment for certain articles for the
handicapped. Presidential Proclamation 5978 and Section 1121 of
the Omnibus Trade and Competitiveness Act of 1988, provided for
the implementation of the Nairobi Protocol into subheadings
9817.00.92, 9817.00.94, and 9817.00.96, HTSUSA. These tariff
provisions specifically state that "[a]rticles specially designed
or adapted for the use or benefit of the blind or other
physically or mentally handicapped persons" are eligible for
duty-free treatment.
U.S. Note 4(a), subchapter XVII, Chapter 98, HTSUSA, states
that, "the term 'blind or other physically or mentally
handicapped persons' includes any person suffering from a
permanent or chronic physical or mental impairment which
substantially limits one or more major life activities, such as
caring for one's self, performing manual tasks, walking, seeing,
hearing, speaking, breathing, learning, or working." Clearly,
individuals who are hard-of-hearing are encompassed by this Note.
U.S. Note 4(b), subchapter XVII, Chapter 98, HTSUSA, which
establishes limits on classification of products in these
subheadings, states as follows:
(b) Subheadings 9817.00.92, 9817.00.94 and 9817.00.96
do not cover--
(i) articles for acute or transient disability;
(ii) spectacles, dentures, and cosmetic articles for
individuals not substantially disabled;
(iii) therapeutic and diagnostic articles; or
(iv) medicine or drugs.
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It is our position that, when the Audiolink system,
comprised of the transmitter and receiver/headset, is entered
together it is clearly encompassed by subheading 9817.00.96,
HTSUSA, and not precluded by any of the listed exclusions of U.S.
Note 4(b). The Audiolink system provides handicapped individuals
(the hard-of-hearing) with a manner in which to cope with their
disability and to function more adeptly within society. In
addition, the special features--the ability to interact with
hearing aids and the NCI captioning decoder, the adjustable
tonal controls, and the unusually high volume capabilities--
clearly establish this system as a device specially designed for
the use or benefit of the handicapped and, therefore, is eligible
for duty-free treatment under subheading 9817.00.96, HTSUSA.
The more difficult issue concerns whether the receiver/
headsets constitute "parts" of the Audiolink system, when
imported separately. Customs has previously ruled that the
subheadings which encompass the Nairobi Protocol apply to
"articles" and not "parts" of articles. See, Headquarters Ruling
Letters (HRLs) 087559 dated October 9, 1990, and 086303 dated
February 13, 1990. The conclusions reached in these rulings were
simply a restatement of the well established principle of Customs
law, reiterated by the courts, "that a tariff provision which
does not specifically provide for parts does not include parts."
Westminster Corp. v. United States, 432 F.Supp. 1055, 1058
(1977), Glass Products, Inc. v. United States, 641 F.Supp. 813,
815 (CIT 1986), Murphy & Co. v. United States, 13 Ct.Cust. Appls.
256, T.D.41201 (1925). As the Court in Westminster further
elaborated, "Congress, in enacting legislation, would have
provided for parts in [a] provision had it so intended."
Whether particular merchandise is considered a "part" for
tariff purposes has been the subject of voluminous judicial
examination. The traditional rule in this regard is "that a
'part' of an article is something necessary to the completion of
that article. It is an integral part, ..., without which the
article to which it is joined could not function as such
article." United States v. Willoughby Camera Stores, Inc., 21
CCPA 332, T.D. 46851 (1933), cert. denied, 292 U.S. 640, 54
S.Ct. 773, 78 L.Ed. 1492 (1933). However, since a determination
regarding whether an item constitutes a "part" is highly fact
specific, the courts have greatly modified this standard over the
years.
With regard to the separately-imported receiver/headsets,
the fact that the receiver/headset is usually used in conjunction
with the transmitter does not establish that the receiver/headset
is a "part" of the Audiolink system. The courts have held that
"the mere fact that two articles are designed to be used together
is not alone sufficient to establish that either is a part of the
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other, or of their combined entity." Westfield Manufacturing
Company v. U.S., 191 F.Supp. 578 (1961). In addition, the courts
have stated that "[m]any ... objects, despite the fact that
their usefulness is only in conjunction with other articles,
retain a separateness of identity and a functional self-
sufficiency which preclude their classification as parts.
Furthermore, if an article possesses the characteristics of a
completely finished and self contained object ...," it will not
be considered a "part". Schick X-Ray Co. v. U.S. 271 F.Supp. 305
(1967). Similarly, Customs has held that a "part" must be
identifiable by shape or other characteristics as an article
solely or principally used as a "part". See, HRL 086835 dated
April 17, 1990.
Consistent with these holdings, it is our opinion that the
receiver/headset does not constitute a "part" of the Audiolink
system. Although it is usually used in conjunction with the
transmitter, it is a completely finished and self-contained
object with a recognizable separate identity. No further
physical integration between the receiver/headset and the
transmitter is required, and the receiver/headset is
operationally and functionally self-sufficient and does not
undergo any further manufacture or manipulation after importation
into the United States. In addition, the receiver/headset is not
the type of article that is identified as an article principally
used as a "part". Therefore, the receiver/headsets, when entered
individually, would not be considered "parts" and would be
eligible for duty-free treatment under subheading 9817.00.96,
HTSUSA.
In addition, it is our opinion that when the
receiver/headset and the power supply module are entered
together, packaged for retail sale, they are eligible for duty-
free treatment under subheading 9817.00.96, HTSUSA. This
position is based on the fact that the receiver/headset is
considered an eligible article and that the power supply module
compliments and assists the receiver/headset in performing its
function.
The final determination to be made is whether the power
supply module when imported separately, is eligible for duty-free
treatment under subheading 9817.00.96, HTSUSA. Subheading
9817.00.96, HTSUSA, provides duty-free treatment for articles
specially designed or adapted for the handicapped. It is our
opinion that the power supply is not so specially designed within
the intent of Congress. The power supply itself exhibits no
special design or adaption that would indicate a use or benefit
to the handicapped. The only form of special design is its size
configurations which allow the insertion of the nickel-cadmium
batteries into both the receiver/headsets and the recharger
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module. There is nothing which sets this item apart in a
recognizable form as an item specially designed to benefit
the handicapped. Therefore, we find that the power supply
module, when imported separately, is not entitled to
classification under subheading 9817.00.96, HTSUSA.
In HRL 555239 dated May 14, 1991, Customs determined that a
power supply module similar to that at issue here was properly
classified in subheading 8507.30.00, HTSUSA, which provides for
"electric storage batteries," dutiable at the rate of 5.1% ad
valorem.
HOLDING:
The Audiolink system, comprised of the transmitter and
receiver/headset, is an article specially designed or adapted for
the benefit of the handicapped and, therefore, eligible for duty-
free treatment under subheading 9817.00.96, HTSUSA.
The receiver/headsets, when entered separately, are also
articles specially designed for the use or benefit of the
handicapped and would not be precluded from duty-free treatment
under subheading 9817.00.96, HTSUSA, on the basis of the
exclusion of "parts" from classification under this tariff
provision. In addition, when the receiver/headset and power
supply are entered together it is the position of Customs that
this import configuration would be eligible for duty-free
treatment under subheading 9817.00.96, HTSUSA.
The power supply is not itself an article specially designed
or adapted for the use or benefit of the handicapped for purposes
of the Nairobi Protocol and, therefore, would be ineligible for
duty-free treatment under subheading 9817.00.96, HTSUSA. The
proper classification of the power supply is subheading
8507.30.00, HTSUSA, which provides for electrical storage
batteries, ... nickel-cadmium storage batteries. The rate of
duty for articles entered under this subheading is 5.1% ad
valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division