CLA-2 CO:R:C:M 955105 DWS
Mr. Stephen J. Leahy
Leahy & Ward
63 Commercial Wharf
Boston, MA 02110
RE: Rechargeable Storage Battery and Battery Recharger;
GRI 3(b); Explanatory Notes 3(b)(VIII), 3(b)(IX), and 3(b)(X);
Set; HQs 083672 and 954061; Composite Good; 8504.40.00
Dear Mr. Leahy:
This is in response to your letter of September 7, 1993, on
behalf of Hotronic USA, Inc., to the District Director of Customs,
Boston, Massachusetts, concerning the classification of a
rechargeable nickel cadmium storage battery and a battery charger
under the Harmonized Tariff Schedule of the United States (HTSUS).
Your letter has been referred to this office for a response.
FACTS:
The merchandise consists of a nickel cadmium storage battery
and a battery charger, both designed to power a footwarmer. A
binding ruling has been requested for the following three
classification scenarios: (1) The storage battery and the battery
charger as a set suitable for sale and distribution to consumers as
imported; (2) The storage battery and the battery charger imported
suitable for packing with no other components included in a
complete footwarmer set; and (3) The storage battery and the
battery charger in a footwarmer box with additional components to
be added after importation. We consider scenario (3) to be
identical to scenario (2). It is our understanding that the
storage battery and the battery charger are separate articles and
are not attached to one another.
The subheadings under consideration are as follows:
8504.40.00: [s]tatic converters.
The general, column one rate of duty for goods classifiable
under this provision is 3 percent duty ad valorem.
8507.30.00: [n]ickel-cadmium storage batteries.
The general, column one rate of duty for goods classifiable
under this provision is 5.1 percent ad valorem.
ISSUE:
Whether, under scenario (1), the storage battery and the
battery charger constitute a set, and, if so, whether the storage
battery or the battery charger imparts the essential character of
the set.
Whether, under scenario (2) and (3), the storage battery and
the battery charger constitute either a set or a composite good,
and, if a composite good, whether the storage battery or the
battery charger imparts the essential character of the composite
good.
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.
SCENARIO (1)
To determine whether the storage battery and the battery
charger constitute a set, we must consult GRI 3(b). It states
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.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS. 54
Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Note 3(b)(X)
(p. 4) states 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 storage battery and the battery
charger are a set for classification purposes. It fully satisfies
all three requirements of Explanatory Note 3(b)(X), in that the set
consists of two different articles which are classifiable in
different headings, it consists of products put up together to
carry out a specific activity (to provide a power source), and it
is put up for sale directly to users without repacking.
Because the storage battery and the battery charger constitute
a set, its essential character must be determined. Explanatory
Note 3(b)(VIII) (p. 4) states that:
[t]he factor which determines essential character will vary as
between different kinds of goods. It may, for example, be
determined by the nature of the material or component, its
bulk, quantity, weight or value, or by the role of a
constituent material in relation to the use of the goods.
HQ 083672, dated May 16, 1989, is cited in support of the
claim that the battery charger imparts the essential character of
the subject set. In that ruling, a battery charger and
rechargeable batteries were held to constitute a set, and because
it was held that the battery recharger imparted the essential
character of the set, the set was classified under subheading
8504.40.00, HTSUS.
However, it is our position that the present merchandise is
distinguishable from that of HQ 083672. The batteries contained
within the set in that case were intended to be replaced, and the
purpose of buying the set was so one could, with the use of the
appropriate adapter, recharge all of the various sizes of consumer
rechargeable nickel cadmium batteries; not necessarily those within
the set. Therefore, in HQ 083672, the battery charger imparted the
essential character of the set.
With regard to the subject set, its primary purpose is to
power a footwarmer through the use of the included battery pack.
Without the battery, it is our understanding that the footwarmer
cannot operate. The battery charger is included in the footwarmer
set to recharge the battery whenever it is low on power.
Consequently, it is our position that the storage battery imparts
the essential character of the subject set. See HQ 954061, dated
May 13, 1993, wherein we held that a rechargeable lead acid battery
pack set, which could be used for a variety of applications, was
classifiable under subheading 8507.20.00, HTSUS. Therefore, the
set containing the storage battery and the battery charger is
classifiable under subheading 8507.30.00, HTSUS.
SCENARIO (2) and (3)
For classification purposes, the storage battery and the
battery charger, imported together without the necessary additional
components, whether or not in a footwarmer box, do not constitute
a set. The two articles fail as a set because of Explanatory Note
3(b)(X)(c), in that they are not put up in a manner suitable for
sale directly to users without repacking. Even if the storage
battery and the battery recharger remain in the footwarmer box
after importation, another packing step is needed to add the other
footwarmer components to the box before the merchandise is sold to
consumers. We find that the addition of the other footwarmer
components constitutes repacking.
Because the storage battery and the battery charger do not
constitute a set, the issue is whether they constitute a composite
good.
In part, Explanatory Note 3(b)(IX) (p. 4) states that:
[f]or the purposes of this Rule, composite goods made up of
different components shall be taken to mean not only those in
which the components are attached to each other to form a
practically inseparable whole but also those with separable
components, provided these components are adapted one to the
other and are mutually complementary and that together they
form a whole which would not normally be offered for sale in
separate parts.
The storage battery and the battery charger constitute a
composite good. Although the two articles are separable
components, they are adapted one to the other, they are mutually
complementary, and, as can be seen by the merchandise itself, they
form a whole which would not normally be offered for sale in
separate parts.
Because the articles constitute a composite good, we must
determine which article imparts its essential character. As with
the set in scenario (1), and for the same reasons, it is our
position that the storage battery imparts the essential character
of the composite good. Therefore, the subject composite good is
also classifiable under subheading 8507.30.00, HTSUS.
HOLDING:
In scenario (1), the storage battery and the battery charger
constitute a set, and the set is classifiable under subheading
8507.30.00, HTSUS, as a nickel cadmium storage battery.
In scenario (2) and (3), the storage battery and the battery
charger constitute a composite good, and the composite good is also
classifiable under subheading 8507.30.00, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division