CLA-2 RR:CTF:TCM 968051 KSH
TARIFF NO: 4202.92.9050
Mr. Rahul Do
TDK Electronics Corporation
3190 East Miraloma Avenue
Anaheim, CA 92806
RE: Revocation of NY J84601; “I’m A Speaker” Softcase with Integrated Speaker from China
Dear Mr. Do:
This letter is to inform you that the Bureau of Customs and Border Protection (CBP) has reconsidered New York Ruling Letter (NY) J84601, issued to you on June 10, 2003, concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of an “I’m A Speaker” softcase with integrated speaker. The article was classified in subheading 8518.21.0000, HTSUSA, which provides for “Loudspeakers, whether or not mounted in their enclosures; Single loudspeakers, mounted in their enclosures.” We have reviewed that ruling and found it to be in error. Therefore, this ruling revokes NY J84601.
Pursuant to section 625(c), 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, 2186 (1993), notice of the proposed revocation of NY J84601 was published in the Customs Bulletin, Volume 40, Number 15, on April 6, 2006. CBP received no comments during the notice and comment period that closed on May 6, 2006.
FACTS:
The article described as the "I’m A Speaker" Softcase with Integrated Loudspeaker is available in both Mono and Stereo Models. The "I’m A Speaker" is a single loudspeaker that is imported within a softcase that has the capacity of storing up to 12 CD’s within the softcase.
ISSUE:
Whether the item is properly classified under subheading 4202.92.9050, HTSUSA, as a CD case or under subheading 8518.21.0000, HTSUSA, as a single mounted loudspeaker.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Heading 4202, HTSUSA, provides for:
”Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping-bags, wallets, purses, map cases, cigarette cases, tobacco-pouches, tool bags, sports bags, bottle-cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper.”
Heading 8518, HTSUSA, provides for:
"Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof."
The “I’m A Speaker” softcase with an integrated speaker is described by both headings 4202 and 8518, HTSUSA, as it is a case, as well as, as a loudspeaker. Because it is prima facie classifiable under two or more headings, it cannot be classified according to GRI 1. In pertinent part, GRI 2(b) provides that any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. However, GRI 2(b) adds that the classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. Accordingly, GRI 3 is utilized when, by application of GRI 2(b), a good consists of materials or components which are prima facie classifiable under two or more headings.
GRI 3(a) states that when goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
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.
In this instance, headings 4202 and 8518, HTSUSA, are equally specific in relation to one another. As we cannot classify these goods pursuant to GRI 3(a), we turn to GRI 3(b) which states:
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.
To determine whether the merchandise constitutes a composite good, we look to Explanatory Note IX to GRI 3(b), which states in pertinent part:
For 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 portable speaker and the CD case components are attached to each other to form a practically inseparable whole. We find that the portable speaker/softcase is a composite good. Thus, we must determine which component imparts the essential character to the merchandise.
Explanatory Note (EN) VIII to GRI 3(b) states:
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.
In situations in which containers of heading 4202, HTSUSA, incorporate electrical devices in their design, CBP has consistently held that the 4202 component imparts the essential character to the article as a whole. See Headquarters Ruling Letters (HQ) 087057, dated December 21, 1989; HQ 089901, dated April 2, 1992; HQ 955261, dated April 14, 1994; HQ 961240, dated February 12, 1990; New York Ruling Letters (NY) 841628, dated June 6, 1989; NY 853347, dated July 3, 1990; and NY L83346, dated March 17, 2005. In each of these cases, the article involved a fully functional carry case or bag of heading 4202, HTSUSA, and a complete electronic device. More on point, in HQ 967704, dated August 25, 2005, CBP held that pursuant to GRI 3(b), the essential character of a speaker/CD case was imparted by the 4202 component and the composite good was classified under subheading 4202.92.9050, HTSUSA. Similarly, in this instance, we find that it is the softcase which imparts the essential character to the article. A consumer's motivating impetus to purchase this article would primarily be the need or desire for a container which can store, protect and transport a CD player and CDs. The fact that this article can also amplify music directed into the amplifier and speakers from an external output source may make the case distinctive and more attractive to some. However it is unlikely that a consumer would purchase this article primarily for use as an amplifier. The essential character of the subject speaker/softcase is imparted by the 4202 component and the composite good is classified under subheading 4202.92.9050, HTSUSA.
HOLDING:
By application of GRI 3(b), the “I’m A Speaker” is classified in heading 4202, HTSUSA, specifically in subheading 4202.92.9050, HTSUSA, which provides for “Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Other: With outer surface of sheeting of plastic or of textile materials: Other: Other, Other: Cases designed to protect and transport compact disks (CD’s), CD ROM disks, CD players, cassette players and/or cassettes.” The general column one rate of duty is 17.6% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY J84601, dated June 10, 2003, is hereby revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division