CLA-2 CO:R:C:M 953767 DWS
Ms. Elva Arzate
Account Manager
Rudolph Miles & Sons, Inc.
P.O. Box 11057
El Paso, TX 79983-1057
RE: Starter Kits for Cellular Telephones; Cellular Phone Battery;
Battery Eliminator; Leather Cellular Phone Case; Set; GRI 3(b);
Explanatory Note 3(b)(X)
Dear Ms. Arzate:
This is in response to your letter of February 26, 1993, on
behalf of Gates Energy Product, Inc., concerning the classification
of starter kits for cellular telephones under the Harmonized Tariff
Schedule of the United States (HTSUS).
FACTS:
The merchandise consists of a starter kit for cellular
telephones. The kit is comprised of a cellular telephone battery
(Mexico country of origin), a battery eliminator (China country of
origin), and a leather cellular telephone case (U.S. country of
origin). It is imported from Mexico.
The purpose of the kit is to provide a cellular telephone user
uninterrupted power to the cellular telephone, to save charged
battery energy, and to provide the user with easier handling of the
cellular telephone by including a carrying strap or a belt clip.
The cellular telephone battery offers a back-up portable power
source when the original telephone battery is being recharged.
The battery eliminator offers the option to draw operating
power from the telephone user's automobile electrical system
through the cigarette lighter, thereby increasing the operating
range for the telephone and extending the life expectancy of the
battery.
The specially fitted leather case allows the telephone user
to easily remove and replace the telephone battery or battery
eliminator without having to remove the case. The leather case
includes a zipper or a velcro strap to allow the cord of the
battery eliminator to extend from the power source directly to the
telephone through the leather case. The leather case also allows
for easier handling of the telephone by including a carrying strap
or a belt clip.
ISSUE:
Whether the merchandise constitutes a set put up for retail
sale? What is the proper classification of the items within the
kit under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
GRI 3 must be considered in the classification of merchandise
put up in sets for retail sale. GRI 3(b) provides that:
[m]ixtures, composite goods consisting of different
materials or made up of different components, and goods put
up in sets for retail sale, which cannot be classified by
reference to 3(a), shall be classified as if they consisted
of the material or component which gives them their
essential character, insofar as this criterion is
applicable.
Explanatory Note 3(b)(X) (p. 4), HTSUS, provides that "[f]or
the purpose of this Rule, the term 'goods put up in sets for retail
sale' shall be taken to mean goods which:
(a) consist of at least two different articles which are,
prima facie, classifiable in different headings . . .;
(b) consist of products or articles put up together to meet
a particular need or carry out a specific activity; and
(c) are put up in a manner suitable for sale directly to
users without repacking (e.g., in boxes or cases or on
boards)."
It is our position that the kit does not constitute a set put
up for retail sale. The kit does satisfy the requirements of (a)
and (c) under Explanatory Note 3(b)(X). However, it does not
satisfy the requirements in (b). The kit does not "consist of
products or articles put up together to meet a particular need or
carry out a specific activity".
Both the telephone battery and the battery eliminator can
operate as the power source of a cellular telephone. However, the
leather case can be used regardless of whether the operator is
using either of the above articles. Although the case is specially
fitted to remove and replace the telephone battery and the battery
eliminator, it also functions to allow easier handling of the
telephone. This function is independent of the use of either the
telephone battery or the battery eliminator.
Consequently, because the kit does not constitute a set, the
three articles must be classified separately under the HTSUS.
The cellular telephone battery is classifiable under
subheading 8507.30.00, HTSUS, which provides for: "[n]ickel-
cadmium storage batteries."
The battery eliminator is classifiable under subheading
8504.40.00, HTSUS, which provides for: "[s]tatic converters."
The leather cellular telephone case is classifiable under
subheading 4202.91.00, HTSUS, which, in part, provides for:
"[t]runks, 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 . . .: [o]ther: [w]ith outer surface of leather . . ."
However, because the leather case is of U.S. origin,
subheading 9801.00.10, HTSUS, is applicable. It provides for:
"[p]roducts of the United States when returned after having been
exported, without having been advanced in value or improved in
condition by any process of manufacture or other means while
abroad."
HOLDING:
The kit does not constitute a set put up for retail sale.
Therefore, the three articles must be classified separately under
the HTSUS.
The cellular telephone battery is classifiable under
subheading 8507.30.00, HTSUS. The general, column one rate of duty
is 5.1 percent ad valorem.
The battery eliminator is classifiable under subheading
8504.40.00, HTSUS. The general, column one rate of duty is 3
percent ad valorem.
The leather cellular telephone case is classifiable under
subheading 4202.91.00, HTSUS. The general, column one rate of duty
is 6.8 percent ad valorem. However, because the leather case is
of U.S. origin, subheading 9801.00.10, HTSUS, is applicable. Goods
classifiable under this provision receive duty free treatment.
Sincerely,
John Durant, Director