CLA-2 RR:CR:GC 962339 MGM
Ms. Barbara Dawley
Meeks & Sheppard
330 Madison Ave.
39th Floor
New York, NY 10017
Re: Automobile Air Condition Kits
Dear Ms. Dawley:
This is in response to your letter of October 6, 1998, to the Director, Customs National Commodity Specialists Division, New York, on behalf of Denso Sales California, Inc., requesting a binding ruling, under the Harmonized Tariff Schedule of the United States (HTSUS), for automobile air condition kits. You request classification of the merchandise as a set under subheading 8536.50.90, HTSUS, or, in the alternative, under subheading 8544.30.00, HTSUS. Your letter was referred to this office for reply. We regret the delay.
FACTS:
The instant merchandise (kit# 55-24682-411) is a collection of parts useful in the installation of air conditioners in automobiles. The parts include clamps, packing, bushing, grommets, caution plates, a receiver holder, brackets, switch assemblies and a wiring harness. The switch assemblies are substantially more valuable than the other pieces of merchandise. The parts are imported packaged together in a sealed plastic bag and resold to original equipment manufacturers and Denso Distributors in the same packaging.
ISSUE:
What is the classification of the described automobile air condition kits?
LAW AND ANALYSIS:
Merchandise imported into the U.S. is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs.
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. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
Heading 8415, HTSUS, provides for air conditioning machines and parts thereof. “A provision for parts of an article covers products solely or principally used as a part of such articles but a provision for ‘parts’ or ‘parts and accessories’ shall not prevail over a specific provision for such part or accessory.” Additional U.S. Rule of Interpretaion 1 (c). Here, it is not clear that each piece of merchandise is principally used in the installation of air conditioners. Further, several of the parts are provided for specifically in other parts of the tariff schedule. For example, the wiring harness is classified in subheading 8544.30.00, HTSUS, which provides for “wiring sets of a kind used in vehicles,” and the switching assembly falls in heading 8536, HTSUS, which provides for “[e]lectrical apparatus for switching.” Thus, while the articles are parts of air conditioning machines, they are not classifiable as such for tariff purposes. Neither are they described by any other tariff heading and therefore the merchandise, taken as a whole, cannot be classified pursuant to GRI 1.
The components of the kits must either be considered as a set or classified individually. Explanatory Note 3(b)(X) states that goods are classified as “goods put up in sets for retail sale,” if they:
(a) consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
(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).
The instant merchandise consists of articles which would be individually classified in several different headings, which are packaged together to meet a particular need (installation of automobile air conditioners), and which are sold to users in the same bags in which they are imported. Therefore, the automobile air condition kits are “sets put up for retail sale,” classifiable according to GRI 3 (b). One may argue that sale to parties who install automobile air conditioners is not a “retail” sale. However, Customs has previously held that merchandise that is not sold directly to consumers can be “goods put up in sets for retail sales,” where some other party acts as the ultimate purchaser. HQ 083968, dated July 6, 1989; HQ 953919, dated September 22, 1993; HQ 954616, dated May, 10, 1994.
Sets are classified as if they consisted of the material or component which gives them their essential character. GRI 3 (b). Explanatory Note (VIII) to GRI 3(b) states as follows:
The factor which determines essential character will vary as between 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.
Here, the switching assemblies account for the greater part of the kit’s value. In addition, the switching assemblies, unlike mounting devices, play an integral role in the operation of the air conditioner. Therefore, it is the switching assemblies which impart the essential character to the automobile air condition kits.
Heading 8536, HTSUS, provides for “[e]lectrical apparatus for switching or protecting electrical circuits....” The ENs state that heading 8536, excludes “assemblies (other than simple switch assemblies....” (emphasis in original). Within this heading, the simple switch assemblies are not described by the subheadings for fuses, circuit breakers, apparati for protecting electrical circuits or relays, thus, they fall to the “other switches” provision. Within the residual provision, the switch assemblies are neither motor starters nor electronic switches, thus they fall to the “other” provision of subheading 8536.50.90, HTSUS.
HOLDING:
Automobile air condition kits (#55-24682-411) are classified in subheading 8536.50.90, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division