CLA-2 RR:TC:MM 960118 HMC
Port Director of Customs
c/o Chief, Residual Liquidation
and Protest Branch
6 World Trade Center
Room 761
New York, NY 10048-0945
RE: PRD 1001-96-105627; "Final Word" Key Chain; Subheadings
7326.90.85, 9503.90.00 and 9505.90.20; GRI 3(b); Explanatory Note
VIII to GRI 3(b); Explanatory Note 73.26; Other Articles of Iron
or Steel; Other Toys; Practical Joke Articles; HQ 087831; HQ
950636; HQ 958452.
Dear Port Director:
This is our decision on Protest 1001-96-105627, filed
against your classification of the "Final Word" Key Chain. The
entries under protest were liquidated on May 31, 1996, and this
protest timely filed on July 18, 1996.
FACTS:
The merchandise under protest is the "Final Word" key chain
comprised of a metal key ring attached to a battery operated,
novelty article, incorporating a pre-programed electronic voice
synthesizer. This electronic synthesizer is stored within a
plastic housing unit that resembles a keyless automobile door
opener. When one of the corners located on the front of the
novelty item is depressed, a synthesized voice emits one of four
pre-programed messages.
The merchandise was entered as a practical joke article
under subheading 9505.90.60 of the Harmonized Tariff Schedule of
the United States (HTSUS). However, the entries were liquidated
under subheading 7326.90.85, HTSUS, as an other article of steel.
The provisions under consideration are as follows:
7326 Other articles of iron or steel:
Forged or stamped, but not further
worked:
7326.90 Other:
Other:
Other:
7326.90.85 Other...4%
* * * *
9503 Other toys; reduced-size ("scale") models and
similar recreational models, working or not;
puzzles of all kinds; and accessories
thereof:
9503.90.00 Other...Free
* * * *
9505 Festive, carnival or other entertainment
articles, including magic tricks and
practical joke articles; parts and
accessories thereof:
9505.90 Other:
9505.90.20 Magic tricks and practical joke
articles; parts and accessories
thereof...Free
ISSUE:
Whether the "Final Word" key chain is classifiable as an
article of iron or steel under subheading 7326.90.85, HTSUS, as a
practical joke article under subheading 9505.90.20, HTSUS, or as
a toy of subheading 9503.90.00, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance
with the General Rules of Interpretation (GRIs). GRI 1 states in
part that for legal purposes, classification shall be determined
according to the terms of the headings and any relative section
or chapter notes, and provided the headings or notes do not
require otherwise, according to GRIs 2 through 6.
The subject key chain consisting of a metal key ring
attached to a novelty item is not specifically provided in any
one heading of the HTSUS. Protestant claims that the item is
described in heading 9505, HTSUS, as a practical joke article
and, in the alternative, as a toy of heading 9503, HTSUS. We
note that the article is also described in heading 7326, HTSUS,
as an article of iron or steel and in heading 8542, HTSUS, as an
electronic microassembly.
GRI 3(a) states that when, by application of rule 2(b) or
for any other reason, goods are, prima facie, classifiable under
two or more headings, the heading which provides the most
specific description shall be preferred to headings providing a
more general description. However, when two or more headings
each refer to part only of the materials or substances contained
in mixed or composite goods or to part only of the items in a set
put up for retail sale, those headings are to be regarded as
equally specific in relation to those goods, even if one of them
gives a more complete or precise description of the goods. We
agree with protestant's assertion that the key chain is a
composite good. The key chain is made up of two different
components which are mutually complementary and form a whole that
would not normally be sold separately. Since the key chain is a
composite good, described in part by two or more headings, we
must apply rule 3(b), which provides that composite goods are to
be classified according to the component that gives the good its
essential character.
The Harmonized Commodity Description And Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized system. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise under the System. Customs believes
the Notes should always be consulted. See T.D. 89-80, 54 Fed.
Reg. 35127, 35128 (Aug. 23, 1989).
Explanatory Note (VIII) to GRI 3(b), at page 4, states that
the 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.
Protestant claims that the essential character of the
article is imparted by the electronic voice synthesizer component
because it comprises the substantial majority of the weight,
value and bulk of the product. Protestant further claims that
this novelty part meets the definition of a practical joke
article of heading 9505, HTSUS, and that, in the alternative, it
is a toy of heading 9503, HTSUS, because it is intended to amuse
an unsuspecting listener. We disagree with protestant's
contentions. We believe that, in this instance, these factors do
not resolve the issue of essential character. It is the role of
the constituent materials in relation to the use of the goods
that imparts the essential character.
Customs has consistently held that, as between the plastic
and steel components in key chains, it is the steel element which
provides the essential character of the item. The steel
component is what makes up the utilitarian portion of the key
ring, whereas the plastic component is present primarily for
decorative purposes. See HQ 087831, dated November 27, 1990, HQ
950636, dated January 16, 1992, and HQ 958452, dated July 3,
1996. In these rulings Customs found that the novelty items
attached to the key chains did not possess any utilitarian
purpose. Similarly, in this instance, we find that the voice
synthesizer does not fulfill any utilitarian function. The
device does not perform any advantageous function other than
simply emitting a variety of pre-programed messages. Moreover,
we believe that the key chain will be used predominantly to hold
keys. It is the part that keeps keys that provides the primary
function on this item. We therefore find that it is the metal
key ring that imparts the essential character in the "Final Word"
key chain.
Chapter 73, HTSUS, provides for articles of iron or steel.
EN 73.26 states that heading 7326 covers all iron or steel
articles. We believe the key chain meets the definition of the
ENs. Accordingly, we find that the "Final Word" key chain is
classifiable under subheading 7326.90.85, HTSUS.
HOLDING:
Under the authority of GRI 3(b), the "Final Word" key chain
is provided for in heading 7326, HTSUS. It is classifiable in
subheading 7326.90.85, HTSUS, as other articles of iron or steel,
other, other, other, other. The 1995 rate of duty is 5.1%.
This protest should be DENIED. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4,
1993, Subject: Revised Protest Directive, you should mail this
decision, together with the Customs Form 19, to the protestant no
later than 60 days from the date of this letter. Any
reliquidation of the entry or entries in accordance with the
decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision 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 to the public via the Diskette Subscription Service, the
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division