CLA-2 RR:CR:GC 959686 MMC
Port Director, U.S. Customs
300 South Ferry Street
Terminal Island, CA 90731
RE: Fun With Electronics
Dear Port Director:
On July 9, 1996, All Nations Forwarding, on behalf of
Philips Interactive Media of America, submitted a request for a
ruling letter to the National Commodity Specialist Division in
New York. The request concerned the classification of an article
known as "Fun With Electronics" under the Harmonized Tariff
Schedule of the United States (HTSUS). On August 15, 1996, that
letter together with a sample was forwarded to this office for
reply. Subsequently it was brought to our attention that an
unliquidated entry of this article is pending at your port. As
there is a pending unliquidated entry, we have determined to
treat this request for a ruling as an internal advice request
pursuant to 177.1 and 177.11, Customs Regulations (19 CFR
177.1 and 177.11).
FACTS:
"Fun With Electronics" consists of a CD-ROM in a plastic
case, a printed instruction manual covering the use of the CD-ROM
and how to set up the cardboard workbench, a plastic toolbox, and
100 electronic components (ceramic, electrolytic and variable
capacitors, wires of various lengths as well as a coil of copper
wire, resistors, transistors, regular and light-emitting diodes,
photocells, transformers, piezo transducers, metal rods,
earphones, a battery holder and springs). All of the components
are packaged together for retail sale.
The CD-ROM contains a "menu" which offers many activities.
The primary activity is the "pick projects", which allows the
user to choose one of many electronic projects to build, such as
a burglar alarm, radio, or other devices or circuits. Once the
project is chosen, the necessary steps to complete it appear on
the user's computer screen. One can follow along and build the
project on the workbench. Once the project is completed, the
CD-ROM explains how the electric current is running through the
circuit. The user can then take that particular project apart
and build another.
Other menu items include, "Overview" which is essentially a
manual with sound, "Trivia" which provide fun facts about
electricity, "Basics" which teaches the basics of electricity,
"Behind the Scenes" which shows how 11 different electrical
gadgets work and "Meet the Stars" and "Electro Quiz Meet the
Stars" which are two ways to learn about the different included
components.
ISSUE:
Whether "Fun With Electronics" is classifiable as a toy set?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with
the General Rules of Interpretation (GRI's). 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 and 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 GRI's may
then be applied. The relevant headings and subheadings
considered when classifying "Fun With Electronics" were as
follows:
4202 Trunks, suitcases, vanity cases, attache cases,
briefcases, school satchels, spectacle cases, binocular
cases, camera cases, musical instrument cases, gun
cases, holsters and similar containers; traveling bags,
toiletry bags, knapsacks and backpacks, handbags,
shopping bags, wallets, purses, map cases, cigarette
cases, tobacco pouches, tool bags, sports bags, bottle
cases, jewelry boxes, powder cases, cutlery cases and
similar containers, of leather or of composition
leather, of sheeting of plastics, of textile materials,
of vulcanized fiber, or of paperboard, or wholly or
mainly covered with such materials or with paper
4823 Other paper, paperboard, cellulose wadding and webs of
cellulose fibers, cut to size or shape; other articles
of paper pulp, paper, paperboard, cellulose wadding or
webs of cellulose fibers
8524 Records, tapes and other recorded media for sound or
other similarly recorded phenomena, including matrices
and masters for the production of records, but
excluding products of chapter 37
9503 Other toys; reduced-size ("scale") models and similar
recreational models, working or not; puzzles of all
kinds; parts and accessories thereof
* * * * *
9503.70 Other toys, put up in sets or outfits, and parts
and accessories thereof
The term "toy" is not defined in the HTSUS. However, in
understanding the language of the HTSUS, the Explanatory Notes
(ENs) of the Harmonized Commodity Description and Coding System
may be utilized. The ENs, although not dispositive or legally
binding, provide a commentary on the scope of each heading, and
are generally indicative of the proper interpretation of the
HTSUS. See, T.D. 89-90, 54 FR 35127, 35128 (August 23, 1989).
The ENs to Chapter 95 state, in pertinent part, that "[t]his
Chapter covers toys of all kinds whether designed for the
amusement of children or adults." Although not set forth as a
definition of "toys," we have interpreted the just-quoted passage
from the ENs as equating "toys" with articles "designed for the
amusement of children or adults," although we believe such design
must be corroborated by evidence of the articles' principal use.
When the classification of an article is determined with
reference to its principal use, Additional U.S. Rule of
Interpretation 1(a), HTSUS, provides that, in the absence of
special language or context which otherwise requires, such use is
to be determined in accordance with the use in the United States
at, or immediately prior to, the date of importation, of goods of
that class or kind to which the imported goods belong, and the
controlling use is the principal use. In other words, the
article's principal use at the time of importation determines
whether it is classifiable within a particular class or kind.
While Additional U.S. Rule of Interpretation 1(a), HTSUS,
provides general criteria for discerning the principal use of an
article, it does not provide specific criteria for individual
tariff provisions. However, the U.S. Court of International
Trade (CIT) has provided factors, which are indicative but not
conclusive, to apply when determining whether merchandise falls
within a particular class or kind. They include: general
physical characteristics, the 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. United States v. Carborundum Company, 63 CCPA 98,
C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979.
The ENs for heading 95.03 provide, in pertinent part, that:
This heading covers:
(A) [a]ll toys not included in headings 95.01 and
95.02.
* * *
[t]hese include:
* * *
(17) [e]ducational toys (e.g., toy chemistry, printing,
sewing and knitting sets).
* * *
[c]ertain toys (e.g., electric irons, sewing machines,
musical instruments, etc.) may be capable of a limited
"use"; but they are generally distinguishable by their
size and limited capacity from real sewing machines,
etc.
[c]ollections of articles, the individual items of
which if presented separately would be classified in
other headings in the Nomenclature, are classified in
this Chapter when they are put up in a form clearly
indicating their use as toys (e.g., instructional toys
such as chemistry, sewing, etc., sets).
[c]ertain of the above articles (toy arms, tools,
gardening sets, tin soldiers, etc.) are often put up in
sets.
Fun With Electronics' general physical characteristics,
mainly its limited electrical use and flimsily constructed
"workbench" and the types of electrical articles which can be
created ("burglar alarm," "siren," " traffic light," etc.) and
their limited use in the typical manner for such articles,
indicate that "Fun With Electronics" is intended principally to
be used as an educational toy. Its manner of advertisement and
display further confirms its use as a toy in such phrases like
"Build 25 fun electronic projects...[i]ncludes 25 amazing
electronic experiments...[d]emonstrates the principles of
electricity...[m]akes learning fun with a cast of cool, animated
cyber characters...[r]ecommended [a]ges 8 and up...[k]ids to
[a]dults ages 6+...WARNING SMALL PARTS MAY POSE A CHOKING HAZARD
TO YOUNG CHILDREN... which appear on the box. Moreover, "Fun
With Electronics" appears to be principally used in the same
manner as an educational toy, that is, it is principally used to
promote trial-and-error and self-learning by spurring natural
curiosity, as demonstrated by the inclusion of example
instructions or experiments to follow to create an end product or
a variety of different products.
With respect to toy sets, the ENs for subheading 9503.70
provide, in pertinent part, that:
"[s]ets" are two or more different types of articles
(principally for amusement), put up in the same packing
for retail sale without repacking. Simple accessories
or objects of minor importance intended to facilitate
the use of the articles may also be included.
It is Customs position that "toys put up in sets or outfits"
(subheading 9503.70) is an eo nomine provision denoting a clearly
identifiable class or kind of goods. Consequently, goods may be
classified in subheading 9503.70 pursuant to GRI 1, and recourse
to the other GRI's, particularly the provisions of GRI 3 relating
to sets, is unnecessary. See, e.g., Headquarters Ruling Letter
(HRL) 086407 of March 22, 1990, HRL 086330 of May 14, 1990, and
HRL 950700. Such sets typically contain complementary articles
intended for use together, rather than individually, to provide
amusement. However, there is no requirement that the component
of the set only be capable of use together, and the ability of
one or more of the components to be used individually does not
disqualify classification as a toy set. It is sufficient that
the components of the toy set possess a clear nexus which
contemplates a use together to amuse.
Because "Fun With Electronics" components combine a variety
of complete articles which are intended for use together to
occupy the user in a pleasant or enjoyable (i.e., amusing) way,
it meets the requirements for classification as a toy set. We
note that in prior rulings this office has held that particular
articles were not classifiable as toy sets because a single
component of the set, usually a carrying case, predominated over
the other set components. Further review of the HTSUS and the
EN's disclose no basis for imposing such a rule. Inasmuch as any
finding of a component's predominance would have no impact on a
finding that the components together constitute a collection of
articles designed and principally used for amusement, we have
determined this rule to be inappropriate. As "fun with
electronics" is classifiable as a toy, classification based upon
its constituent materials in heading 4202 or heading 4823 is
precluded.
Finally, Legal Note 6 to Chapter 85, HTSUS, states that:
"[r]ecords, tapes and other media of heading 8523 or 8524, HTSUS,
remain classified in those headings, whether or not they are
entered with the apparatus for which they are intended." In
classifying GRI 3 retail sets containing media of heading 8523 or
8524 Customs has interpreted Legal Note 6 to Chapter 85, as
requiring that software must be broken out from a retail set and
classified separately. See, HRLs 952154 dated November 17, 1992,
and 950925 dated May 12, 1992. In these situations,
classifying the media separately did not destroy the GRI 3 retail
set.
We are of the opinion that this principle should be extended
to GRI 1 toy sets. When an article which contains various
components, one of which is media classifiable according to Note
6 to Chapter 85, and it otherwise meets all other requirements
for classification as a GRI 1 toy set, that GRI 1 toy set is not
destroyed by the presence of the media. Rather, the media will
be separately classified in heading 8524, and the remaining
components in subheading 9503.70, HTSUS. Therefore, because
"Fun With Electronics" meets the requirements to be considered a
GRI 1 educational toy set, it is classifiable as such with the
media component classified separately.
HOLDING:
"Fun With Electronics" is classifiable under subheading
9503.70.0030, HTSUS, as "Other toys; reduced-size ("scale")
models and similar recreational models, working or not; puzzles
of all kinds; parts and accessories thereof: Other toys, put up
in sets or outfits, and parts and accessories thereof, Other:
Other." The 1997 general column one duty rate is free.
The CD-ROM software component is classifiable under
subheading 8524.39.00, HTSUS, which provides for: "Records, tapes
and other recorded media for sound or other similarly recorded
phenomena, including matrices and masters for the production of
records, but excluding products of chapter 37: Other." The 1997
general column one duty rate is 3.7 percent ad valorem.
This decision should be mailed by your office to All Nations
Forwarding no later than 60 days from the date of this letter.
On that date, the Office of Regulations and Rulings will take
steps to make the decision available to Customs personnel via the
Customs Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act and other public
access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division