CLA 2 RR:CR:GC 962340 AML
Mr. Kenneth R. Paley
Sharretts, Paley, Carter & Blauvelt, P.C.
Sixty seven Broad Street
New York, N.Y. 10004
RE: Reconsideration of NY C87866; Clock radio incorporating a microchip that
electronically stores and reproduces sounds.
Dear Mr. Paley:
This is in reference to New York Ruling Letter (NY) C87866, issued to you on June 11, 1998, which concerned the classification concerning the classification of the “Sound Spa,” a clock radio that contains a microchip incorporated into the radio circuitry where it stores and reproduces sounds, under the Harmonized Tariff Schedule of the United States (HTSUS). We have reconsidered NY C87866 and now believe that the classification set forth is incorrect. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625 (c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), a notice was published on May 31, 2000, in Vol. 34, No. 22 of the Customs Bulletin, proposing to modify NY C87866 and to revoke the treatment pertaining to the clock radio that contains a microchip incorporated into the radio circuitry where it stores and reproduces sounds. The only comment received in response to this notice was in opposition to the proposal.
FACTS:
The “Sound Spa,” model # SS-400, is an AM/FM clock radio which, besides the AM/FM radio function, presumably contains a microchip that is incorporated into the radio circuitry, where it stores and reproduces any of a selection of the following six “natural” sounds: woodlands, spring rain, mountain stream, white noise, ocean waves and summer night. The article has a liquid crystal display (LCD) clock powered by a single, triple A (“AAA”) battery, as well as alarm and snooze features. The radio and sound reproducing features can function either when powered by three double A (“AA”) batteries or electricity via an AC adapter. The article has an “auto sleep timer” which facilitates listening to the sound of the radio or sound reproducing function for a measured increment of time after which the article will turn off the sound being emitted. The FOB price of the article is less than $40.00.
ISSUE:
Whether the “Sound Spa,” a clock radio incorporating sound reproducing apparatus, is classifiable under subheading 8527.19.10, HTSUS, as other reception apparatus for radiobroadcasting, whether or not combined with sound recording or reproducing apparatus, valued not over $40 each, incorporating a clock or clock-timer, not in combination with any other article, and not designed for motor vehicle installation?
LAW AND ANALYSIS:
Classification of imported merchandise is accomplished pursuant to the Harmonized Tariff Schedule of the United States (HTSUS). Classification under the HTSUS is guided by the General Rules of Interpretation of the Harmonized System (GRIs). GRI 1, HTSUS, 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[.]”
The applicable headings and subheadings under consideration are as follows:
8527 Reception apparatus for radiotelephony,
radiotelegraphy or radiobroadcasting, whether
or not combined, in the same housing, with
sound recording or reproducing apparatus
or a clock:
Radiobroadcast receivers capable of
operating without an external source of
power, of a kind used in motor vehicles,
including apparatus capable of receiving
also radiotelephony or radiotelegraphy:
8527.13 Other apparatus combined with sound
recording or reproducing apparatus:
Other:
8527.13.60 Other.
8527.19 Other:
8527.19.10 Valued not over $40 each,
incorporating a clock or
clock timer, not in combination
with any other article, and not
designed for motor vehicle
installation.
Other.
* * *
8543 Electrical machines and apparatus, having
individual functions, not specified or included
elsewhere in this chapter; parts thereof:
Other machines and apparatus:
Other:
Other:
8543.89.96 Other.
The legal notes to Section XVI provide, in pertinent part, that:
* * *
3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
* * *
Heading 8527, HTSUS, provides for various combinations of radios with clocks, tape players, tape recorders, CD players, and for models that have different sources of power, usually battery or electricity. The “Sound Spa” is a clock radio combined with an electronic sound microchip within the same housing. Because of the inclusion of the clock, alarm and sleep timer functions, the reasonable conclusion is that the article is intended for bedside use. At the meeting held at Customs Headquarters, you agreed with Customs that the “natural” sounds were stored and reproduced from a microchip. In your supplemental submission, you averred that you were unable to provide the value of the microchip. The sound microchip has its own controls, and presumably shares the power source, circuitry and speaker of the radio. Considered separately, the electronic sound microchip would be classifiable under subheading 8543.89.96, HTSUS, as other electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85. See Headquarters Ruling Letter (HQ) 955116, dated October 8, 1993; HQ 953105, dated April 15, 1993; and HQ 954363, dated August 27, 1993, which found such articles to be classifiable in subheading 8543.80.90, HTSUS, the predecessor to subheading 8543.89.96, HTSUS.
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 ENs should always be consulted. See T.D. 89 80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
As a result of amendments to the ENs made in 1989, the EN to heading 8543, HTSUS, provides, in pertinent part:
The heading includes, inter alia:
* * *
(13) Electronic musical modules for incorporation in a wide variety of utilitarian or other goods, e.g., wrist watches, cups and greeting cards. These modules usually consist of an electronic integrated circuit, a resistor, a loudspeaker and a mercury cell. They contain fixed musical programmes.
EN 85.43(13) states that heading 8543 includes electronic music modules, to which the subject sound devices are akin. However, we note that musical mechanisms are also mentioned in the ENs to the music box provision, heading 9208, HTSUS, which states:
Articles which incorporate a musical mechanism but which are essentially utilitarian or ornamental in function (for example, clocks, miniature wooden furniture, glass vases containing artificial flowers, ceramic figurines) are not regarded as musical boxes within the meaning of this heading. These articles are classified in the same headings as the corresponding articles not incorporating a musical mechanism [emphasis in original].
Also, articles such as wrist watches, cups and greeting cards containing electronic musical modules are not regarded as goods of this heading. Such articles are classified in the same headings as the corresponding articles not incorporating such modules [emphasis in original].
Customs has recognized the treatment of such microchips by the World Customs Organization (“WCO”) (i.e., that articles containing such chips should be classified in the same headings as the corresponding articles not incorporating a musical mechanism) in several rulings: Headquarters Ruling Letter (HQ) 958397, dated December 19, 1995; HQ 959552, dated November 22, 1996; HQ 959043, dated April 11, 1997, and HQ 959403, dated April 11, 1997. In each of those rulings Customs noted that:
In 1989, anticipating classification problems with respect to merchandise containing such musical mechanisms, the Customs Cooperation Council or CCC (now the World Customs Organization or WCO) provided guidance which Customs has long followed. With electronic chips having become relatively inexpensive and simple to install in a wide variety of products, the CCC suggested that merchandise containing battery-operated chips with speakers, should be classified in the same headings as the corresponding articles not incorporating such modules.
In light of the above, the intent of the drafters of the international Harmonized System was to take no notice of sound microchips, whether they produce musical or other sounds, in classifying goods that contain them. By application of Note 3 to Section XVI, and in accordance with the above guidance of the WCO, we believe the Sound Spa is a composite machine whose principal function is provided by the clock radio, not the sound microchip. Therefore, at GRI 1, the instant article is classified as a clock radio in heading 8527. Heading 8543 and the microchip are eliminated from further consideration in classifying the merchandise at issue.
Classification of the subject article within subheadings 8527.13 or 8527.19, HTSUS, has been suggested. Included within heading 8527, HTSUS, is “[r]eception apparatus . . . whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock[.]” Radiobroadcast reception apparatus are separated between apparatus capable of operating without an external source of power (subheadings 8527.12 through 8527.19, HTSUS) and apparatus incapable of operating without an external source of power (subheadings 8527.21 through 8527.29, HTSUS). In the first category are pocket sized radio cassette players (subheading 8527.12.00, HTSUS), other apparatus combined with sound recording or reproducing apparatus (subheading 8527.13, HTSUS), and other (than the above)(subheading 8527.19, HTSUS).
The “Sound Spa” is not a pocket sized radio cassette player, so subheading 8527.12.00, HTSUS, is inapplicable. Subheading 8527.13, HTSUS, is also inapplicable because it provides for apparatus combined with sound recording or reproducing apparatus. As noted above, the microchip is not a sound reproducing device of heading 8527 because it is classified in heading 8543, HTSUS. Thus, subheading 8527.13 does not describe the merchandise. The goods are specifically and completely described in the residual provision, subheading 8527.19, as a radiobroadcast receiver combined with a clock.
Subheading 8527.19 incorporates all radios combined with other articles of the one-dash provision at issue. Of those apparatus captured in subheading 8527.19, subheading 8527.19.10 covers those, in pertinent part, valued not over $40 each, incorporating a clock or clock-timer, and not in combination with any other article. By operation of Note 3 to Section XVI, we find that the clock radio is specifically described in subheading 8527.19.10, HTSUS.
HOLDING:
The Sound Spa is classifiable under subheading 8527.19.10, HTSUS, which provides for other reception apparatus for radiotelephony combined with sound recording or reproducing apparatus, valued not over $40 each, incorporating a clock or clock-timer, not in combination with any other article, and not for installation in a motor vehicle.
EFFECT ON OTHER RULINGS:
NY C87866 is modified. In accordance with 19 U.S.C. §1625 (c), this ruling will become effective sixty (60) days after its publication in the Customs Bulletin.
Sincerely,
John Durant, Director
Commercial Rulings Division