CLA-2 RR:CR:GC 963847 AML
Mr. Fred Larian
Micro Games of America
16730 Schoenborn Street
North Hills, CA 91343-6122
Re: Reconsideration of NY A89251 and HQ 960114; clock radio that incorporates a
book stand and sound reproducing device.
Dear Mr. Larian:
This is in regard to New York Ruling Letter (NY) A89251, issued to you by the Customs National Commodity Specialist Division, New York, on November 8, 1996, and Headquarters Ruling Letter (HQ) 960114, dated September 15, 1997, which affirmed NY A89251. In those rulings, the Book Crypt Clock Radio With Sound Effects, model # GB-4124, a clock radio which incorporates a book stand and a sound reproducing device, was classified under subheading 8527.19.10, Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed the classification of the item and determined that it 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 D85257 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 Book Crypt Clock Radio With Sound Effects, model GB-4124, consists of a molded plastic book holder with two “Goosebumps” hands sized and spaced sufficiently to function as book ends, into which is incorporated a liquid crystal display (LCD) digital alarm clock with time and date display, an AM/FM radio with rotary tuning, built-in antenna, and motion-activated sound effects in the form of a transducer or electronic chip. Removing a book from or placing a book on the bookcase activates “scary” sound effects such as “shrieking ghosts, evil laughter and monster roars.” The article, which is powered by three “AA” batteries, is imported without books.
ISSUE:
Whether the clock radio combined with a book shelf and 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 over $40 each, incorporating a clock or clock-timer, not in combination with any other article, and not designed for motor vehicle installation; or in subheading 8527.19.50, HTSUS, other?
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[.]” GRI 2 (b) provides in pertinent part that “[a]ny reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance [and] [t]he classification of goods consisting of more than one material or substance shall be according to the principles of [GRI] 3.”
The HTSUS headings and subheadings under consideration are as follows:
3926 Other articles of plastics and articles of
other materials of headings 3901 to 3914:
3926.10.00 Office or school supplies.
3926.90 Other:
3926.90.98 Other.
* * *
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 question for classification purposes is whether the clock radio or the sound-reproducing device or the molded plastic book holder imparts the essential character of the article. It appears from the photocopies that the plastic components predominate the bulk of the holders. However, the clock radio and sound reproducing device are central to the use of the goods.
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, published in the Federal Register August 23, 1989 (54 FR 35127, 35128).
The molded plastic book ends/holder cannot be classified in heading 9403, HTSUS, as furniture, because EN 94.03, HTSUS, requires that the articles classifiable in that heading must be stackable or placed on the floor. Neither can the molded plastic book ends/holder be classified in heading 8304, HTSUS, as other desk equipment, because EN 83.04 provides that for an article to be classifiable in that heading, an article must be made of base metal. Therefore the molded plastic component of the article is classifiable in heading 3926, HTSUS, which provides for articles of plastic.
The clock radio component of the composite article would itself be classifiable within heading 8527, HTSUS, which provides for, inter alia, clock radios. The electronic sound microchip component 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 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.
* * *
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 similar. 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 wristwatches, 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 “Goosebumps” is a composite machine whose principal function is provided by the clock radio, not the sound microchip. Therefore, at GRI 1, the component consisting of a clock radio that incorporates a sound-reproducing device 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.
Because the “Book Crypt Clock Radio with Sound Effects” is comprised of distinct components (the plastic book holder and the clock radio incorporating a sound reproducing device), the heading in which the article is classifiable cannot be determined pursuant to GRI 1. Resort must then be made to the remaining GRIs.
GRI 3 states, in pertinent part:
When by application of [GRI] 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(a) 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 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.
(b) Mixtures, 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.
* * *
EN V to GRI 3(a), p. 4, states in pertinent part that “when two or more headings each refer to part only of the materials 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 than the others. In such cases, the classification shall be determined by [GRIs] 3(b) or 3(c).” The product under consideration is one in which different materials form a practically inseparable whole. Resort then to GRIs 3(b) and 3(c) must be made in order to make a classification.
The term “essential character” is not defined within the HTSUS, GRIs or ENs. EN VIII to GRI 3(b), p. 4, gives guidance, stating 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.
Recently, there have been several decisions by the Court of International Trade (CIT) which addressed “essential character” for purposes of GRI 3(b). Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed, 119 F. 3rd 969 (Fed. Cir. 1997), involved the classification of shower curtain sets, consisting of an outer textile curtain, inner plastic magnetic liner, and plastic hooks. The Court examined the role of the constituent materials in relation to the use of the goods and found that, although the relative value of the textile curtain was greater than that of the plastic liner, and that although the textile curtain also served protective, privacy and decorative functions, because of the fact that the plastic liner served the indispensable function of keeping water inside the shower, the plastic liner imparted the essential character upon the set. See also Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), motion for rehearing and reconsideration denied, 994 F. Supp. 393 (CIT 1998), and Vista International Packaging Co. v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995), in which the Court also looked to the role of the constituent material in relation to the use of the goods to determine essential character.
Consideration of the “Book Crypt Clock Radio with Sound Effects” reveals that although the molded plastic case houses the electronics of the clock radio, supports books and aesthetically enhances the product, it is the clock radio that imparts the essential character of the product. The clock radio is the component that is emphasized in the advertisement and on the packaging of the article. The nature of the clock radio component, its value, and its central role in relation to the use of the goods all contribute to a finding that the essential character of the article is imparted by the clock radio. Therefore, the article is classifiable at GRI 3(b) in heading 8527, HTSUS.
The “Goosebumps” is a clock radio combined with a molded plastic book holder and a sound-reproducing device, within the same housing. Because the article is designed for table or desktop use, and because of the inclusion of the clock radio, the reasonable conclusion is that the article is intended for bedroom use. By application of GRI 6 and by reference to GRI 1, consideration of the appropriate 6-digit heading is next.
Classification of the subject article within subheadings 8527.13 or 8527.19, HTSUS, must be considered. 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 “Goosebumps” 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 8527.19.50 captures this article because it is a clock radio in combination with any other article. By operation of Note 3 to Section XVI, and in consideration of the distinct plastic book holder with which it is combined, we find that the clock radio is specifically described in subheading 8527.19.50, HTSUS.
HOLDING:
The “Goosebumps” model # GB-4124, a clock radio which incorporates a book stand and a sound reproducing device, is classifiable under subheading 8527.19.50, 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, in combination with another article, and not designed for motor vehicle installation.
EFFECT ON OTHER RULINGS:
NY A89251 and HQ 960114 are revoked. 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